How to Start a Nonprofit in Minnesota

Minnesota has 32,425 active 501(c)(3) organizations, 1,702 of them approved in the last twelve months, slightly fewer than the 1,743 the year before. Its mix is unusual: recreation and sports groups are the second largest category after education, ahead of religion. 72.2% report no revenue on file or under $50,000, a smaller share than the national figure. Minnesota is cheap to start in, at $70, but it has two annual deadlines on two calendars, and missing the December one dissolves the corporation.

The federal half of this is identical in every state and is set out on the state hub: incorporate, adopt bylaws, get an EIN, apply to the IRS on Form 1023 or 1023-EZ. This page covers what Minnesota adds, what each step costs, and the two or three things that catch people out here specifically.

What it costs in Minnesota

The state filings come to $70 in cash. Chapter 317A sets no fee for the annual renewal. Registering with the Attorney General adds $25, and $25 a year after that, once you pass $25,000 in contributions or pay anyone to run or raise money for the organization. On top of that sits the IRS user fee, which is set each year by revenue procedure and shown on Pay.gov when you file, so no figure for it is printed here. Every amount above was read from the issuing agency’s own fee schedule or form, and each one is linked in the sources at the foot of this page. Fees change: check before you budget.

The order to do it in

Sequence matters more than speed. The IRS application asks for documents the state has to create first, and the state charity regulator wants the organization to exist before it registers.

• Decide whether you need a corporation at all. Fiscal sponsorship gives a project the same tax treatment with no incorporation, no IRS application and no annual return. For a project under a few thousand dollars a year it is usually the better answer.
• File the formation document with the Minnesota Secretary of State, with the IRS purpose and dissolution language in it. Our articles template carries both.
• Adopt bylaws and appoint the board before the IRS application, which asks about governance. The bylaws template and the board guide cover what that means in practice.
• Get an EIN. Free, online, immediate, and needed for the bank account. Do not pay anyone for it: the EIN guide explains why people do.
• Apply to the IRS on Form 1023-EZ if you qualify, which most new organizations do, or the long Form 1023 if you project gross receipts over $50,000 or hold assets over $250,000.
• Handle the state exemptions and registrations in the section below, once the determination letter arrives.

What catches people out in Minnesota

Missing the 31 December renewal dissolves you. Every Minnesota nonprofit corporation must file a renewal with the Secretary of State by 31 December of each year, starting the calendar year after it incorporates. The statute sets no fee for it, which is why it gets forgotten. A corporation that misses it is dissolved. One annual registration reinstates it retroactively, but a dissolved charity is still under the Attorney General’s oversight for three years, and a bank or funder that checks your status in the meantime will see it.

The $25,000 exemption is narrower than it sounds. Small charities do not have to register with the Attorney General, but only if they meet every condition: under $25,000 in contributions, no plan to exceed it, all work including fundraising done by unpaid people, and nothing going to an officer. One paid staff member or a professional fundraiser takes you out of it. Once you are registered, the annual report is due 15 July for a calendar year, with a copy of your Form 990, a $25 fee and a $50 late fee.

Federal exemption does not cover sales tax. The Department of Revenue says plainly that federal exemption does not make an organization exempt from Minnesota sales and use tax. You apply on Form ST16, allow up to 60 days, and then hand suppliers a Form ST3 certificate. Even then, prepared and catered food, lodging, gambling supplies and most vehicle purchases stay taxable, which matters for galas and retreats.

The Attorney General hears about it before you close. A 501(c)(3) or a corporation holding charitable assets must give the Attorney General written notice and wait 45 days before it dissolves, merges or transfers substantially all its assets (317A.811). The Attorney General can waive the wait or extend it once by 30 days. A merger or asset transfer to another 501(c)(3) is exempt, but a dissolution is not, so build the wait into any plan to wind up.

What Minnesota’s nonprofit sector looks like

From the IRS Business Master File, which lists every organization whose exemption has not been revoked.

The size column is the one worth sitting with before you file. 72.2% of Minnesota’s charities have no revenue figure on file or report under $50,000, against 77.5% nationally. The typical outcome of starting a nonprofit here is a very small organization, which is not an argument against doing it, but it is an argument for choosing the cheap route first and for being honest in the projections on the IRS form. What the whole thing costs, federal and state together, is set out in what it costs to start a nonprofit.

A realistic timeline

Written as weeks rather than as a list, because the waiting is the part people plan badly. Nothing here assumes you pay anyone to do it for you.

1. Week one. Agree the purpose, the name and at least three directors, a majority of them adults.
2. Week one or two. File the Articles of Incorporation with the Secretary of State for $70, with the IRS purpose and dissolution clauses, which the Department of Revenue also checks for when you apply on ST16.
3. Same week. Apply for the EIN online. Free and immediate.
4. Month one. Adopt bylaws, with a conflict of interest rule that matches 317A.255, hold the first board meeting and open the bank account.
5. Month one or two. File Form 1023-EZ if you qualify, or the long Form 1023.
6. Before you solicit, if you are not exempt. Register with the Attorney General for $25.
7. When the determination letter arrives. Send Form ST16 to the Department of Revenue, and allow up to 60 days.
8. Every year. The Secretary of State renewal by 31 December, and the Attorney General annual report by 15 July for a calendar year.

The long pole is the IRS, not Minnesota. The state end of this is measured in days and costs $70. Everything after the determination letter is either free or a form with a copy of that letter stapled to it.

What kind of charities Minnesota has

The Business Master File classifies each organization by activity. The six commonest categories in Minnesota account for 16,320 organizations between them:

• Education: 3,770 organizations
• Recreation and sports: 3,165 organizations
• Arts, culture and humanities: 2,557 organizations
• Human services: 2,543 organizations
• Religion related: 2,361 organizations
• Philanthropy and grantmaking: 1,924 organizations

That mix is worth checking against what you are planning. The largest category in every state is religion related, which is a reporting artifact as much as a fact, since churches are exempt automatically and many register anyway. The categories underneath it are the real map of what gets funded locally, and an organization entering a crowded category needs a sharper answer to the question of why it should exist separately than one entering a thin one.

Approvals in Minnesota are falling

The file carries a determination date for every organization, so the last two years can be compared directly. Minnesota had 1,702 approvals in the last twelve months against 1,743 in the twelve before that, a change of -2.4%. Nationally the last twelve months produced 115,927.

Read that as competitive context rather than as a verdict. More approvals means more organizations chasing the same local funders, and it also means the process is working normally for people like you. What it does not tell you is how many of them are still operating in three years, which the file cannot say, because it keeps listing an organization until its exemption is actually revoked.

After approval

The annual obligations start immediately and they run on two calendars. Federally, a return is due every year from the first full tax year, and three consecutive misses means automatic revocation with no appeal: which return applies is covered in which Form 990 you file. In Minnesota, the filings in the table above renew on their own cycle. If the organization eventually sells anything or lets space, selling products and renting out space cover the tax treatment, and if it does not work out, closing properly is its own process.

Method and sources

Every fee and form on this page was read from the issuing agency’s own page or form on 10 November 2026, listed in the sources below. Nothing here is copied from another guide. The IRS user fee is not stated because the form instructions point to a revenue procedure and to Pay.gov rather than printing an amount.

The counts are from the IRS Exempt Organizations Business Master File, filtered to subsection 03, with determinations through October 2026. Three limits carry over from that file: it includes organizations that are dormant but not yet auto revoked, the ruling date is when the IRS decided rather than when anyone applied, and revenue is blank for most small organizations, which is why the size row reads “no revenue on file or under $50,000” rather than giving a median. State is the organization’s own mailing address. This page is general information and not legal advice.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.