To start a nonprofit in New York, you incorporate with the state, get a federal Employer Identification Number, apply to the IRS for 501(c)(3) tax-exempt status, and register with the New York Attorney General’s Charities Bureau before soliciting any donations. The state filing fee is $75, the IRS charges either $275 or $600 depending on which exemption application you qualify for, and the full process can take anywhere from a few months to over a year, mostly depending on how long the IRS takes.
Pick a Name and Line Up Your Board
Search the New York Department of State’s business entity database to confirm your proposed name isn’t already taken. The name must be distinguishable from any existing corporation on file, and it should clearly reflect your charitable purpose, since the IRS will look at it closely when reviewing your exemption application.
New York requires a nonprofit board of at least three directors.1New York State Senate. New York Code Not-For-Profit Corporation Law NPC 702 – Number of Directors Each director must be at least 18, with narrow exceptions for certain youth-focused organizations like Girl Scout councils.2FindLaw. New York Code Not-For-Profit Corporation Law NPC 701 – Board of Directors You also need a principal office address in New York and a registered agent to receive legal documents. The Department of State can act as your default registered agent, or you can appoint an individual or hire a commercial service.
File the Certificate of Incorporation
The Certificate of Incorporation is what legally creates your nonprofit. File it with the New York Department of State under Section 402 of the Not-for-Profit Corporation Law, with a $75 filing fee.3New York Department of State. Certificate of Incorporation for Domestic Not-for-Profit Corporations The certificate must list the organization’s name, purpose, the county where the office is located, and the names and addresses of your initial directors.4New York State Senate. New York Code NPC 402 – Certificate of Incorporation; Contents
Mail or hand-deliver the certificate and fee to the Division of Corporations at One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. Once it’s processed, the Department issues a filing receipt confirming your corporation exists.
Two clauses in the certificate matter well beyond the state filing, because the IRS will reject your exemption application without them.
The Dissolution Clause
Your certificate must state that if the organization ever shuts down, its remaining assets go to another 501(c)(3) organization or to a government entity for a public purpose. The IRS provides this sample wording: “Upon the dissolution of this organization, assets shall be distributed for one or more exempt purposes within the meaning of IRC Section 501(c)(3), or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose.”5Internal Revenue Service. Does the Organizing Document Contain the Dissolution Provision Required Under Section 501(c)(3)
The Purpose Clause
Your purpose clause has to limit activities to those permitted under Section 501(c)(3). Vague or overly broad purpose statements delay IRS approval. Stick to specific charitable, educational, religious, or scientific purposes rather than generic language.
Get an Employer Identification Number
Before you can open a bank account, apply for tax-exempt status, or hire anyone, you need an Employer Identification Number from the IRS. It’s a nine-digit number that works like a Social Security number for your organization. Apply online directly through the IRS at no cost; you’ll receive the EIN immediately.6Internal Revenue Service. Get an Employer Identification Number Ignore third-party sites that charge for this. The IRS never charges a fee for an EIN.
Draft Bylaws and a Conflict of Interest Policy
Bylaws are your nonprofit’s internal rulebook. They cover how the board operates, how meetings are called and run, how officers are elected, and how conflicts get resolved. You don’t file bylaws with the state, but you’ll need them for both your IRS application and your Charities Bureau registration.
The conflict of interest policy deserves particular attention. The IRS expects every 501(c)(3) applicant to have one, and Form 1023 includes a sample policy as an appendix. At minimum, your policy should require board members and officers to disclose situations where their personal financial interests conflict with the organization’s mission and to recuse themselves from voting on those matters.7Internal Revenue Service. Form 1023: Purpose of Conflict of Interest Policy A board member voting on a contract with a company they own is the classic example. Without a clear policy, you put both your exemption application and your long-term tax-exempt status at risk.
Apply for 501(c)(3) Tax-Exempt Status
Incorporating does not make your nonprofit tax-exempt. You have to apply separately with the IRS under Section 501(c)(3), which exempts the organization from federal income tax and lets donors deduct contributions. The IRS offers two application forms, both filed electronically through Pay.gov.
Form 1023-EZ
The streamlined application is for smaller organizations expecting no more than $50,000 in annual gross receipts over the next three years. The user fee is $275.8Internal Revenue Service. Form 1023 and 1023-EZ: Amount of User Fee First complete the eligibility worksheet; answering “yes” to any question on it means you have to file the full Form 1023 instead.9Internal Revenue Service. Instructions for Form 1023-EZ Processing typically takes about 90 days.
Form 1023
The full application is required for larger organizations and anyone who doesn’t qualify for the EZ version. It carries a $600 user fee and asks for substantially more detail, including bylaws, your conflict of interest policy, a description of planned activities, and financial projections.10Internal Revenue Service. Instructions for Form 1023 Expect nine to ten months of processing, or longer. Incomplete applications are the single biggest cause of delay, so double-check every attachment before submitting.
Federal approval doesn’t carry over to state taxes. Apply separately to the New York Department of Taxation and Finance for state tax exemptions, including sales tax exemption.
Register with the Charities Bureau Before You Fundraise
Any nonprofit that solicits contributions or holds charitable assets in New York must register with the Attorney General’s Charities Bureau. You cannot legally fundraise in the state without it. Submit your registration through the Charities Bureau’s online portal, and include your Certificate of Incorporation and bylaws as part of the filing.11Office of the New York State Attorney General. Charities Registration A registration fee applies, and the online system calculates what you owe based on the organization’s circumstances.
What Comes After You’re Up and Running
Formation is the beginning. Staying in good standing means keeping up with recurring filings at both levels of government.
Nearly every tax-exempt organization has to file an annual information return with the IRS, choosing from the 990 series based on financial size:12Internal Revenue Service. Form 990 Series Which Forms Do Exempt Organizations File
- Form 990-N (e-Postcard) for organizations with gross receipts normally $50,000 or less.
- Form 990-EZ for gross receipts under $200,000 and total assets under $500,000.
- Form 990 for gross receipts of $200,000 or more, or total assets of $500,000 or more.
- Form 990-PF for private foundations, regardless of size.
All 990-series returns are due by the 15th day of the fifth month after your fiscal year ends; for a calendar-year nonprofit, that’s May 15.13Internal Revenue Service. Publication 4839 – Annual Form 990 Filing Requirements for Tax-Exempt Organizations Miss three years in a row and the IRS automatically revokes your tax-exempt status, with no warning and no appeal. Reinstatement requires a new application and a new user fee.
On the state side, charitable organizations registered with the Attorney General have to file Form CHAR500 every year, due four and a half months after the fiscal year ends.14Office of the New York State Attorney General. Charities Annual Filing CHAR500 The CHAR500 fee depends on net worth and ranges from $50 for organizations with net worth between $50,000 and $250,000 up to $1,500 for those with net worth of $50 million or more.15New York State Office of the Attorney General. NYS Annual Filing for Charitable Organizations Organizations with annual revenue over $250,000 may also have to file a copy with the New York Department of State, which carries a separate fee.
Two other obligations catch new nonprofits off guard. First, tax-exempt status doesn’t cover every dollar you earn. If your organization generates $1,000 or more in gross income from a trade or business that’s regularly carried on and not substantially related to your exempt purpose, you have to file Form 990-T and pay tax on that income at the regular corporate rate. Second, your exemption application and your three most recent annual returns must be made available to anyone who asks.16Internal Revenue Service. Public Disclosure and Availability of Exempt Organizations Returns and Applications You do not have to disclose donor names and addresses unless you’re a private foundation. Failing to provide documents on request can cost $20 per day, up to $10,000 per return, with an additional $5,000 penalty for willful failure.17Internal Revenue Service. Political Organization Filing Requirements: Penalties for Failing to Make Forms 990 Publicly Available Most organizations handle this by posting their returns on their own website or through a service like GuideStar.