UNA wants nonprofits to begin on the right foot! Once you have reviewed the information below and still have questions, please contact us for additional assistance.
Two great resources to start you off on the right foot are:
- The Utah Nonprofits Association's handbook, The Art of Forming a New Nonprofit.
- An interactive concept map that will walk you through the basics of starting a nonprofit. Click the small white icons on each page for more information.
You may also wish to consult with an attorney who specializes in incorporating nonprofits. Click here for our Marketplace listing of attorneys who, for a reasonable fee, provide this service.
- Utah Department of Commerce - information on incorporating in Utah (including sample Articles of Incorporation) and relevant forms for nonprofit corporations at the state level.
- IRS Section on Charitable Organizations - applications and forms to start your charitable nonprofit organization, including a step-by-step guide to applying.
- Trust for Conservation Innovation: Fiscal Sponsorship: A 360 Degree Perspective
- The Foundation Center - a tutorial on Establishing A Nonprofit Organization and alternatively a Guide to Fiscal Sponsorship.
- Utah Legal Services
- Board Source has an e-Book called Starting a Nonprofit Organization.
Tips & Items to Consider: Should You Start a Nonprofit Organization?
Evaluating the Idea
- What is our mission and vision? Will it be clear to others what we are looking to do?
- What are our goals and objectives? Can these be easily defined?
- Can this work on its own? Would it be better to collaborate with an existing organization with a complementary vision?
- Who else is doing this? Visit the UNA Members Directory to see if others are doing the same work that you are looking to do.
- Can I/we afford this? Do NOT assume that funding will be easily forthcoming; many foundations, for example, will only fund organizations that have been in existence for several years.
- Be sure to perform a SWOT analysis. See below for a description of that overall process.
Be sure you can answer the following questions BEFORE you move forward
- Is the proposed project something a nonprofit organization can legally do?
- Is there a demonstrated need for this service/project that is not being fulfilled elsewhere?
- Can you clearly state your mission (it should be two sentences or less)?
- Have you carefully considered a partnership with an existing organization? Visit the UNA Members Directory to see what others are doing.
- Can you describe what success looks like?
- Can you clearly describe the steps needed to succeed?
- Will others (foundations and government grantmakers, individual donors, board members, and volunteers) commit time and resources to your cause?
- Do you and your supporters have the needed skills to start the new organization?
Reasons NOT to start a new nonprofit organization
- It is for a time-limited special project that will benefit the community.
- You wish to support a specific needy individual.
- You think a lot of grant money is available.
- You have a service or product to provide as a donation or below cost but want a tax deduction.
- You feel your current work is not meaningful.
- You have important knowledge or perspectives to share.
- You want to do things your own way without the "bureaucracy" normally involved.
Overview of how to perform a SWOT Analysis
- SWOT stands for Strengths (internal), Weaknesses (internal), Opportunities (external), and Threats (external). Use this tool to create a quick map of the internal and external view of your potential organization, and the SWOT will help make the decision of how to proceed. More importantly, it will provide some creative thinking about you organization and its relation to the general community.
- This tool will also help determine how to use internal strengths to manage threats, and it will identify weaknesses to focus on improvements through awareness. It will increase success by identifying new opportunities for the organization.
- Keep in mind that if the result of the SWOT is to not proceed with forming your nonprofit, that is a sign not of failure, but that the community cannot successfully support your project.
Steps to Incorporating and Seeking Tax Exemption for your 501(c)3 Nonprofit Organization
- Read the handbook above for a more detailed explanation of this list.
- Choose a name for the organization. Check availability for your proposed name.
- If you want a particular name, file an application for Reservation of Business Name (not required) through the Utah State Dept. of Commerce, Division of Corporations.
- File two copies with original signature of the Articles of Incorporation with Division of Corporations (there are sample articles on the Dept. of Commerce website).
- File IRS form SS-4, Application for Employer Identification Number.
- Prepare By-Laws. There are many resources over the Internet on how to prepare by-laws. You may view UNA's bylaws and other legal documents here.
- Prepare IRS form 1023, Application for Recognition of Exemption under Section 501(c)(3)--this is not a quick process, and you may need assistance. This is the "meat" of your incorporation as a charitable organization. Expect the approval to take at least several months. The IRS website has good information for nonprofits.
- Mail By-laws, Articles of Incorporation, Form 1023, Form 8718 with appropriate fee, and 872-C if requesting an advance ruling, all to the IRS.
- Apply for appropriate state tax exemptions, including sales and use tax. For more details on these exemptions, visit the Utah State Tax Commission website.
- Complete and submit the Charitable Organization Permit Application Form for Utah or the Unified Registration Statement (accepted by over 20 states, including Utah).
- File Annual Report with UT Division of Corporations. For the forms, visit the Division site.
- Prepare Form IRS 990 annually - if your organization's revenues exceed $50,000 per year, and your organization is not a religious institution (i.e. a church)--which will exempt you from having to file the 990 return. For more information, visit the IRS website on Charitable Organizations.