Nevada has 14,893 organizations in the nonprofit sector. These successful nonprofits earn more than 9 billion in revenue per year and employ a total of 53,017 people.
Nonprofit organizations, unlike for-profit corporations, are not driven to make a profit but rather for the good of the natural world or humanity. Therefore, starting a nonprofit organization allows you to use your education, experience, and business talent for the greater good of mankind.
This experience yields intangible rewards that are often more valuable than any amount of wealth.
Starting a nonprofit organization in Nevada could take you anywhere between two weeks to three months when you comply with the applicable laws on both the federal and state level.
The benefits of starting a nonprofit corporation include:
- Separate entity status
- Tax-exempt status
- Perpetual existence
- Access to funding from both the government and private foundations.
This step-by-step guide will show you how to go about starting a nonprofit in Nevada.
1. Select a name for your organization
A necessary step in starting a Nevada nonprofit is deciding on a name for your organization. Your organization’s name is essential as it establishes its brand; however, it must comply with the state naming requirements and should be easily searchable by potential sponsors and donors.
The state of Nevada has the following naming guidelines, and your nonprofit name cannot contain the following phrases or words unless you obtain special permission ahead of time:
- Registered Architect
- Registered Interior Designer
- Licensed Architect Registered
- Interior Design Registered
- Residential Designer
- Registered residential designer
- Residential Design
- Licensed Residential Designer
- Licensed Engineer
- Professional Engineer
For complete rules and guidelines, please refer to the state of Nevada’s official guidelines for Nevada-based organizations.
Additionally, you may perform a name search on the state of Nevada’s website.
Checking the availability of the domain is also recommended in the event you plan on creating a website for your Nevada nonprofit.
2. Nominate a Nevada registered agent
The registered agent is your nonprofit’s point of contact with the state of Nevada. Therefore, it is compulsory that all nonprofits in Nevada appoint a registered agent. The responsibilities of the registered agent include accepting important legal documentation from the state on the nonprofit’s behalf.
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You may appoint anyone as a Nevada nonprofit registered agent provided they meet the following criteria:
- The Nevada registered agent must be at least 18 years of age or older
- The Nevada registered agent must maintain normal business hours
- The Nevada resident agent must be a resident of the state and have a physical address in the state
- The Nevada registered agent must consent to the appointment
You may appoint anyone as a registered agent, including yourself.
3. Recruit your board members
Every nonprofit organization needs a board of directors in order to be eligible for 501(c)(3) tax exemption.
The board of directors will include a minimum of three individuals who are all at least 18 years of age. The directors do not need to be residents of the state or members of the nonprofit organization.
Additionally, you’ll need to recruit officers to fulfill the secretary, treasurer, and president roles. In this instance, two or more offices may be held by the same person.
You’ll also need to recruit an incorporator who’s responsible for signing the Articles of Incorporation on your nonprofit’s behalf.
4. Consent to bylaws and conflict of interest policy
The Bylaws and Conflict of interest policy are essential documents that your Nevada nonprofit needs to keep on file.
The Bylaws highlight the rules put in place to operate the nonprofit organization.
On the other hand, the Conflict of interest policy is a separate set of rules that ensures that all decisions made by the Board of Directors ultimately are in the organization’s best interest and are not driven by the professional or personal interests of members.
Both the bylaws and Conflict of interest policy should be adopted during the nonprofit’s first board meeting when the officers and directors are officially appointed.
5. Select a Nevada nonprofit startup corporation structure
The NRS or Nevada Revised Statutes recognizes the following types of nonprofits or nonprofit structures:
- Nonprofit Corporation (NRS 82.006)
- Nonprofit Cooperative Corporation with stock (NRS 81.010)
- Nonprofit Cooperative Corporation without stock (NRS 81.410)
- Cooperative Associations (NRS 81.170)
- Corporation Sole (NRS 84.010)
The above-mentioned organizational structures apply to all Nevada nonprofits.
6. Prepare and file nonprofit Articles of Incorporation
Preparing and filing articles of incorporation for your Nevada part nonprofit officially marks the formation of your nonprofit organization. The articles will need to be filed with the Nevada Secretary of State.
The Nevada Secretary of State website contains a sample nonprofit Articles of Incorporation Form or template that you may use to create the Nevada nonprofit corporation articles. You’ll be required to enter a minimal amount of information such as:
- The organization’s name
- The organization’s purpose
- The name and address of the nonprofit registered agent
- The name and address of the incorporator
- The name and address of the first Board of Directors
Please note that the form or template contained on the Secretary of State website does not contain specific language required by the Internal Revenue Service in order to obtain federal tax exemption.
However, to ensure that you do qualify for 501(c)(3) tax exemption from the IRS, you’ll need to include the following in your articles:
- A statement of purpose that meets the provisions required by the IRS
- A dissolution of assets, dedicating your assets to another tax-exempt organization in the event of dissolution
- A statement declaring that the organization will never be a part of any prohibited political activity
Once you’ve created your articles, follow the instructions on the Nevada Secretary of State’s website and file your articles with the additional language required by the IRS included.
7. File an initial report
All Nevada nonprofits are required to file an initial report after filing Articles of Incorporation. The initial report must be filed with the Nevada Secretary of State by completing the Initial List of Officers and Directors – Nonprofit Corporation Form.
Initial reports must be filed at the time of incorporation. Once you have completed your initial report, you should go ahead and file it online.
8. Secure an EIN (Employer Identification Number)
Prior to submitting an application for federal tax exemption, you need to have an EIN. An EIN is an Employer Identification Number. It’s often referred to as a Social Security number for your Nevada nonprofit organization.
In order to apply for an EIN, you need to complete IRS Form SS-4 and file Form SS-4 on the IRS website. The application is 100% free of charge, and when filing online, you will receive your EIN immediately.
Once you’ve obtained your EIN, you’ll enjoy the following benefits:
- The option to open a business bank account for your Nevada nonprofit
- Hire employees for your Nevada nonprofit
- Use it for state and federal tax purposes
- Submit 990 returns to the IRS
9. Apply for federal tax exemption
All Nevada nonprofit corporations must apply for 501(c)(3) tax-exempt status under the Internal Revenue Code. Obtaining tax exemption on the federal level includes the following benefits:
- Credibility with the Internal Revenue Service
- Access to grants from government organizations and private foundations
- Perpetual existence
- Limited liability
Before applying for federal income tax exemption, you must meet the following requirements for tax exemption eligibility:
- Obtain an EIN
- Adopt Conflict of interest policy and bylaws
- File Articles of Incorporation
- Elect three directors not related to each other
Once your nonprofit has met the above-mentioned conditions, you are free to go ahead and apply for 501(c)(3) tax exemption by filing Form 1023 online.
Small business organizations are free to file Form 1023-EZ, which is an easier and shorter application form.
The IRS will review your application. If it’s accepted or approved, you’ll receive a determination letter stating that your Nevada nonprofit is one of the existing organizations or public charities exempt from federal taxes under section 501(c)(3).
10. Apply for Nevada state tax exemption
After receiving your IRS determination letter stating that you are exempt from federal income taxes, your Nevada nonprofit will still need to obtain an exemption from state income tax.
Complete and file the Exempt Status Entity Form and submit it on the Nevada Department of Taxation website. Additionally, you may apply for sales tax exemption with the Nevada Department of Taxation by completing and filing Form APP – 02.01.
11. Other applicable permits and licenses
Your Nevada charitable organization will need to apply for Common Nevada business registration with the Department of Taxation or the Nevada Employment Security Division as well as some local governments.
Completing the relevant forms will allow you to obtain sales and use tax permits, register business tax or private unemployment insurance, as well as a local business license.
All you need to do is copy Form APP – 01.00 and submit it to the relevant agency or online at https://www.nevadatax.nv.gov/
Additional state registration and reporting requirements
As per state law, all Nevada nonprofits that accept tax-deductible donations or participate in fundraising or charitable solicitation are required to register with the Secretary of State prior to soliciting donations.
12. Submit an annual report
All Nevada nonprofit organizations must submit annual reports in order to remain in good standing with the Secretary of State. Your annual report must be submitted to the Nevada Secretary of State by the end of your registration anniversary month. Anyone with authority may file the annual report; however, an officer must sign a paper form. Original signatures are not a requirement.
Costs of starting a new nonprofit in Nevada
The following filing fees apply to all Nevada nonprofit organizations:
- Articles of Incorporation: $50 + optional $125-$1,000 expedite fee
- Initial list: $50
- Nevada business license: $200 ($0 if exempt)
- Federal tax exemption application for 501(c)status: $275 or $600 IRS fee
After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:
Open a business bank account
- Maintain accounting and tax filing
- Ensure that your personal assets are kept separate from your nonprofits’ assets
To open a bank account, you will need to provide:
- Your EIN
- A copy of your articles of incorporation
- A copy of your organization’s bylaws.
Hire a business accountant
- Simplify payroll and bookkeeping
- Prevent your nonprofit from avoiding penalties and tax errors
- Manage your nonprofit’s funding
- Focus on growing your nonprofit
- Manage risks
You may opt for General liability, Personal liability, or Worker’s compensation insurance.
Build a website
As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals.
Sign legal documents
One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit.
If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:
- State the registered name of your nonprofit
- Use your name and signature
- State your position/role in the organization as its authorized representative
When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual.
Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing.
A nonprofit’s mission statement or an organization’s mission statement is an expression of the corporation’s reason for existence or core purpose. Mission statements are usually included in the nonprofit’s business plan and may include references to how the nonprofit aims to fulfill the unmet need and what it most values.
Nonprofits have the privilege of raising funds in various ways. Once you’ve received a 501(c)(3) tax-exempt status, you are free to go ahead and ask for sponsorships. Alternatively, you may choose to host a fundraising event, create a donation page on your nonprofit’s website, or launch a crowdfunding campaign.
Nonprofit organizations do have stakeholders that include both external and internal members. This includes volunteer board members, directors, congregants, Association members, and paid staff. Stakeholders play an integral role in the nonprofit organization‘s success and should feel empowered to make critical decisions when needed.
All nonprofit organizations must comply with the law since they are trusted with tax-exempt statuses. This allows nonprofits to have access to public and private funding, and ultimately they are held to a high standard by the government. Therefore, all nonprofit organizations must adhere to the IRS compliance guide to ensure that they are in good standing with the government and are not abusing their financial privileges.
A nonprofit board of directors has certain responsibilities, which include upholding the nonprofit’s mission, overseeing and supporting the executive director, attending important meetings, providing financial support, and acting as advocates in the community. Therefore, when choosing board members, it is essential that they share in the nonprofit’s vision and purpose.