We can help you file with the Arkansas Secretary of State.

1. Define your mission

Why do you want to start a nonprofit organization? Your statement should express your mission to start the nonprofit organization, focus on the work and relationships of your organization, a detailed guide on how you want to develop your organization, and explain your purpose to different constituents, funding bodies, and donors.

2. Build your team

Create a team of leaders who will guide your nonprofit organization through thick and thin. The founding participants of the organization should include an executive director, members of the board of directors, and other volunteers. You can later add team members as your organization grows.

3. Incorporate your nonprofit organization

You should start by drafting your official charter or articles of incorporation. It will define your nonprofit organization as an entity. The incorporation document should include the name of your organization, its official location, and the names and addresses of the members of the board of directors and initial trustees. Each member of the board of directors should sign the articles of incorporation. You should then submit this document to the Secretary of State to incorporate your nonprofit organization.

4. File 501(c)(3) for tax exemption status

Any nonprofit organization can apply for tax exemption with the IRS. You may need to pay a user fee during your application. The fee amount varies from $275 to $600, depending on your type of application. This is the most time-consuming part of starting a nonprofit organization. The Internal Revenue Service may take three to twelve months to get back with your application. It will ask tons of questions regarding your organization and its purpose. Make sure you fill out this application carefully to enjoy tax exemptions from your state.

5. Write your organization’s bylaws

In addition to your mission state, you should also create a guide for your organization’s operations. The bylaws will be crucial in the long-run as it contains the organization’s functions and internal culture. Ideally, a nonprofit organization’s bylaws should consist of staff roles, formal mission statement, committee structures and membership programs, donation solicitation protocols, procedures to amend the bylaws, procedures to settle compensation and resolve conflicts of interest, and details of financial reporting protocols.

6. Register your state’s agency

Each state has an attorney general responsible for overseeing charitable solicitations and charitable organizations. Make sure you register your non-profit organization with your state’s office. If you want to solicit contributions in other states also, you need to register in the offices of those states too.

Apart from registering with your state’s agency, you also need to prepare for annual report requirements. Every state requires nonprofit organizations to file their annual reports before the accounting year closes. If you have already applied for tax exemptions, you must file a version of Form 990 with the Internal Revenue Service. This form shows your organization’s activities, finances, governance processes, details of directors, and the permission for public inspection.

Your state may have additional renewal requirements. Contact the Secretary of State’s office to know more about the details of the documents required to fulfill these reports. Make sure you track your organization’s activities and finances carefully to fulfill these annual reporting requirements smoothly.

7. Secure startup funding

Every nonprofit organization runs on donations and funding. You can secure your startup funding from private foundations, corporations, and state, city, or federal governments. Explain your organization’s mission to everyone and encourage them to fund your business.

Now that you know the different steps on how to start a business, you should decide which one is more advantageous for you. Follow the steps mentioned above for each business carefully to avoid any legal obstacles from your state. Don’t forget to weigh the pros and cons of each type of business structure so you don’t end up making the wrong decision.