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How Much Cost to Start a NonProfit?

Cost To Start a NonProfit

How Much Should It Cost To Start a NonProfit ?

Whenpeople start a nonprofit they wonder “how much should it cost?” I believe that anyone can start a nonprofit for very little money. That can be accomplished in several different ways and I have helped many do it all over the world.  In addition, to the information below, I created a unique resource that can help anyone start a nonprofit inexpensively called the Nonprofit Starter Bundle.

First let’s look at, how much should it cost to start a nonprofit? Second, how much time does it take when learning how to start a nonprofit organization.  The answer to these questions resides mostly in how you decide to set up your nonprofit and complete the nonprofit application.  The cost and the time can vary greatly depending on the resources you choose to use. There are is also a quicker, more efficient method to start a nonprofit should you decide to use it. Continue on and I will explain in detail.

Cost To Start a Nonprofit That Is Independent

When setting up an independent 501c3 nonprofit, there are several different ways you can go about setting it up and completing the 501c3 application. If you are fortunate enough to get an attorney to set up your nonprofit pro bono then the cost to start a nonprofit are reduced drastically. However, many attorneys have more than enough requests for pro bono work. In addition, you must work in their time frame, they are likely busy and may take months to complete the non profit incorporation. Even after incorporation, the irs 1023 form must be done which is time-consuming and should be done by an attorney who is familiar with form 1023.   If an attorney is not willing to help you pro bono, attorney services will be most likely the most expensive option.  The nonprofit incorporation filing and the tax-exempt status paperwork with an attorney could cost several thousand dollars, not including the filing fee with the IRS that is $500+.

Cost to Start a Nonprofit That is Fiscally Sponsored

If you should decide to set up 501c3 status through fiscal sponsorship, then your cost to start a nonprofit could be minimal. I have helped thousands around the world with information and help when setting up a fiscally sponsored nonprofit for less than $400 in less than six weeks. Not only will a fiscal sponsor save you time and money on the front end, many fiscal sponsors take care of your accounting, banking, quarterly filings and other pertinent paperwork. This will save you hours of time and valuable expenses.

Time is the second question many ask in reference to how much is enough? The time it takes to set up a nonprofit also varies on the method you choose to start a nonprofit. Setting up a independent nonprofit with filing through the IRS can take several months or even more. It may be necessary to answer additional questions the IRS will have once they begin working on your 501c3 application for tax exemption. Allow yourself six months or more for putting your 501c3 application together, filing them, and awaiting the IRS decision.

Fiscal Sponsorship is different however. It is the decision of the fiscal sponsor who decides whether or not your nonprofit is approved. Therefore, the process of acceptance can move swifter. Since there is no need for a nonprofit application to go to the IRS, many times you’re dealing with a smaller entity who can make decisions quicker. Fiscal Sponsorship should take no more than six weeks and in many cases takes much less time than that. This is also know as donor advised funds.

Once approved by the Fiscal Sponsor, you will be able to take donations and issue tax-deductible receipts. Once Fiscally Sponsored, if you still have a desire to apply for independent nonprofit status, you can begin the process.  You will be able to continue your nonprofit charity work while going through the lengthy independent nonprofit process.

When starting a non profit the question of “how much should it cost to start a nonprofit” or “how much time does it take”, can many times be answered by the method you will use to start the nonprofit.
To quickly get step-by-step help on starting a non profit or completing the 501c3 application see the page Start a Nonprofit here on this site.

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  1. Caswell Malcolm
    Caswell MalcolmAug 29, 2011

    If I start a none-profit organization how do I pay my staff?

    • Simplenonprofit
      SimplenonprofitAug 30, 2011

      By starting a nonprofit you run the business just like any other business. You pay payroll and yourself if you like. Please email us and let us personally walk you through the process and training.

  1. Jon07-13-11

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