How to Start a Nonprofit in Your State

Starting a nonprofit is two processes that people run together and should not. One is federal and identical in all fifty states: the IRS decides whether an organization is exempt under section 501(c)(3). The other is state law, which creates the corporation in the first place, decides what it costs, and usually adds a charitable registration the founders have never heard of.

This page covers the federal half, which does not vary, and gives the numbers for each state so you can see what you are joining. The state by state guides cover filing fees, form numbers and the registrations that catch people out.

There are 1,637,599 active 501(c)(3) organizations in the United States, and 119,025 of them were approved in the last twelve months. 77.4% report no revenue on file or under $50,000. Whatever else starting a nonprofit is, it is not unusual, and most of the organizations you are joining are very small.

The federal process, which is the same everywhere

Five steps, in this order. Doing them out of order is the commonest and most expensive mistake, because the IRS application asks for documents the state has to create first.

• Incorporate in your state. A nonprofit corporation is created by the state, not by the IRS. The filing is usually called articles of incorporation or a certificate of formation, and the IRS will not grant exemption without language most state templates leave out: a specific purpose clause and a dissolution clause. Our articles of incorporation template covers both.
• Adopt bylaws and appoint a board. Not filed with anyone in most states, and still required before the IRS application, which asks about governance. The bylaws template is the starting point.
• Get an EIN. Free, immediate, online, and needed for the bank account and the application. Do not pay anyone for this. The EIN guide covers where it sits in the sequence.
• Apply to the IRS. Form 1023, or Form 1023-EZ if the organization qualifies. A user fee is payable with the application, set each year by revenue procedure and shown on Pay.gov when you file, which is why no amount is printed here.
• Register with the state charity regulator. Separate from incorporation, usually run by the attorney general, and required in most states before soliciting donations. This is the step that is missed.

Which IRS form, and why the answer is usually EZ

Form 1023-EZ is a three page online form. Form 1023 is a long one with narrative attachments. The eligibility worksheet in the IRS instructions decides which you may use, and three questions do most of the work:

• Do you project annual gross receipts over $50,000 in any of the next three years?
• Have annual gross receipts exceeded $50,000 in any of the past three years?
• Are total assets worth more than $250,000?

Answer no to all of them, and to the rest of the worksheet, and you may file the EZ. Given that 77.4% of existing 501(c)(3)s report no revenue on file or under $50,000, most new organizations qualify comfortably. That is a reason to be honest on the projections rather than optimistic: a projection over $50,000 moves you to the long form and a much longer wait.

Before any of it, the question worth asking is whether you need a separate organization at all. Fiscal sponsorship gives a project the same tax treatment without incorporation, an IRS application or an annual return, and for a project under a few thousand dollars a year it is usually the better answer. What the whole process costs is set out in what it costs to start a nonprofit, and whether you can do it alone in starting one by yourself.

What the state adds

Four things vary by state, and together they are the difference between a $25 formation and a $200 one.

• The incorporation fee and form. From $25 in Texas to several hundred dollars in the most expensive states.
• An initial report. Several states want a statement of information or equivalent within 90 days of incorporating, with its own fee and its own deadline.
• Charitable solicitation registration. Most states require it before asking the public for money, typically through the attorney general, with a fee and an annual renewal. A few states do not require it at all.
• State tax exemption. Federal exemption does not automatically exempt you from state income, franchise, sales or property tax. Some states grant it on the strength of the IRS letter, some make you apply separately, and sales tax exemption is often a different application again.

Two states are covered in full so far: California and Texas. The rest are being added in the order the table below suggests, and each one is verified against that state’s own filing office rather than copied from another guide.

Incorporate where you operate

The question arrives from the startup world: should we incorporate in Delaware, or in whichever state has the lowest fee? For a nonprofit the answer is almost always no, and the arithmetic is straightforward.

A corporation formed in one state and operating in another has to register in the second as a foreign corporation. That means two filing fees, two annual reports, two registered agents and two sets of deadlines, permanently, to save a one off difference of a few dozen dollars. The charitable solicitation registration follows where you fundraise rather than where you incorporated, so it does not move either.

The exceptions are narrow and they are not fee driven: a national organization with no single home state, or one whose funders require a particular jurisdiction. If you are reading this to decide where to form a local charity, form it where the work happens.

The numbers, state by state

From the IRS Exempt Organizations Business Master File, which lists every organization whose exemption has not been revoked. “Approved in 12 months” counts determination letters issued in the year to August 2026, so it measures IRS decisions rather than applications filed. “Under $50k” is the share with no revenue figure on file or a figure below $50,000, which is the best proxy the file offers for how small the sector’s organizations really are.

Read the third column rather than the first. A large state has more charities because it has more people, but the approval rate and the size mix say what starting one there actually looks like. Wyoming approves 10.1% of its stock in a year, which is the highest churn in the country. New York approves 5.8%, the lowest of the large states, and has the highest share of private foundations among them.

After you are approved

The obligations start immediately and most of them are annual. An exempt organization files a Form 990, 990-EZ or 990-N every year from its 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. State registrations renew on their own cycle, usually with a financial report attached. And if it does not work out, closing properly is its own process, set out in how to close a nonprofit.

If the money is the obstacle rather than the paperwork, starting with no money covers the routes that do not need any, and the full sequence for the federal side is in the guide to starting a nonprofit.

Method and limits

Counts are from the IRS Exempt Organizations Business Master File, all four regional files, filtered to subsection 03. The newest determination month in the file is August 2026, and the trailing twelve months is measured against the file rather than against the calendar, so the figure does not drift as the file ages.

Four limits. The BMF lists organizations whose exemption has not been revoked, so it includes dormant ones not yet auto revoked and excludes any already removed. The ruling date is when the IRS decided, not when anyone filed, so approvals lag applications by the processing time. Revenue is blank for most small organizations, which is why the size column is stated as “no revenue on file or under $50,000” rather than as a median. And state is the organization’s own mailing address, which for a handful of national bodies is not where they operate.

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.