How to Start a Nonprofit in Texas

Texas is the second largest nonprofit state and the fastest growing of the large ones: 133,046 active 501(c)(3) organizations, 11,471 approved in the last twelve months, an 8.6% approval rate against California’s 7.5% and New York’s 5.8%. 81.7% report no revenue on file or under $50,000, the highest share of any large state.

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 Texas adds, what each step costs, and the two or three things that catch people out here specifically.

What it costs in Texas

The state filings come to $25 in cash. 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 Texas 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 Texas

Most Texas charities never register with the state, and that is correct. Unlike California and most other states, Texas has no general charitable solicitation registration. The attorney general requires registration only from certain law enforcement related organizations soliciting by telephone, public safety organizations and their solicitors, and veterans organizations. Everyone else fundraises without registering, which removes a fee and an annual filing that founders elsewhere have to budget for. Check your own category rather than assuming, because the three that are covered are covered strictly, with fees and in some cases a surety bond.

The exemption is two applications, not one. The Secretary of State states that neither a nonprofit corporation nor an unincorporated association is automatically exempt from federal or state taxes, and that an organization must apply to both the IRS and the Comptroller. For a 501(c)(3) the state route is Form AP-204 with a copy of the federal determination letter attached, which covers franchise tax and sales tax.

The certificate of formation has to carry the IRS language. The Secretary of State says it directly: to obtain federal exemption as a charity, the certificate of formation must contain a required purpose clause and a dissolution of assets provision. The state’s own form does not supply them, so they go in as supplemental provisions, and our articles of incorporation template has both.

What Texas’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. 81.7% of Texas’s charities have no revenue figure on file or report under $50,000, against 77.4% 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 the first board, and check the name on the Secretary of State’s SOSDirect search.
2. Week one or two. File the Certificate of Formation, Form 202, for $25, with the IRS purpose clause and the dissolution of assets provision added as supplemental provisions. The state’s form does not include them and the Secretary of State says so.
3. Same week. Apply for the EIN online. Free and immediate.
4. Month one. Adopt bylaws, hold the first board meeting and open the bank account. There is no state initial report to file and, for most charities, no solicitation registration, so this is where Texas is genuinely lighter than most states.
5. Month one or two. File Form 1023-EZ if you qualify, or the long Form 1023 if the projections take you over the thresholds.
6. When the determination letter arrives. Send Form AP-204 to the Comptroller with a copy attached, which covers franchise tax and sales tax in one application.
7. Ongoing. Watch for a periodic report request from the Secretary of State, which arrives on their cycle rather than annually, and respond to it: not responding can forfeit the corporation.

The long pole is the IRS, not Texas. The state end of this is measured in days and costs $25. Everything after the determination letter is either free or a form with a copy of that letter stapled to it.

What kind of charities Texas has

The Business Master File classifies each organization by activity. The six commonest categories in Texas account for 75,661 organizations between them:

• Religion related: 22,382 organizations
• Education: 17,402 organizations
• Human services: 13,259 organizations
• Philanthropy and grantmaking: 8,193 organizations
• Arts, culture and humanities: 7,517 organizations
• Recreation and sports: 6,908 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 Texas are rising

The file carries a determination date for every organization, so the last two years can be compared directly. Texas had 11,471 approvals in the last twelve months against 10,150 in the twelve before that, a change of +13.0%. Nationally the last twelve months produced 119,025.

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 Texas, 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 30 September 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 August 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.