Friday, November 25, 2022

How To Apply For 501c3 In New York

Name Your New York Nonprofit

How to start a nonprofit in New York – 501c3 Organization

Choosing a name for your organization is the first and most important step in starting your nonprofit corporation. Be sure to choose a name that complies with New York naming requirements and is easily searchable by potential members and donors.

1. Follow the naming guidelines:

  • Include some kind of organizational designation, such as Incorporated, Inc., Ltd., or Company
  • Not be deceptive in any way or indicate your organization was designed for any purpose other than what is stated in your Certificate of Incorporation
  • Not include words or phrases that could lead the public to believe your organization is acting as an agent of the United States or the State of New York
  • Not include any of these words or phrases:
  • doctor or lawyer
  • union, labor, council, industrial organization
  • blind or handicapped
  • exchange
  • school, education, elementary, secondary, kindergarten, prekindergarten, preschool, nursery school, museum, history, historical, historical society, arboretum, library, college, university, or other restricted terms
  • In addition, your nonprofits name cannot use words or phrases that are considered obscene or ridiculing any person, group, belief, etc. or indicate that your group will engage in unlawful activity.
  • Access the New York State Senate’s official guidelines for more information about naming a nonprofit in New York.

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    Forming A New York Nonprofit Corporation

    Before you can apply for tax-exempt status, you must first form a nonprofit corporationin compliance with New York’s Not-for-Profit Corporation Law .

    1. Choose corporate directors and officers

    In New York, nonprofit corporations must elect at least three directors to serve on the board. Minimum age for directors is 18, with some exceptions for organizations involved in youth activities. The board of directors is responsible for drafting the corporation’s bylaws and mission and selecting and overseeing the corporate officers, including the executive director.

    2. Choose a name for your nonprofit

    You must ensure that your desired name for your nonprofit is not already in use by another business. Check New York’s Corporation and Business Entity Database to see if your nonprofit name is available. If it’s already in use, you must select a different, unique name.

    3. File Certificate of Incorporation

    The next step is to file a Certificate of Incorporation with the New York Department of State. This certificate requires basic information about the nonprofit, such as:

    • The nonprofit’s name and county location
    • The names and addresses of the initial directors
    • The nonprofit’s intended duration, if other than perpetual
    • If having a registered agent, the agent’s name and address
    • The purpose of the nonprofit

    If you are planning on applying for tax-exempt status, be sure to add additional language to the certificate showing that you are organizing for an exempt purpose.

    Prepare And File Your Articles Of Incorporation

    To register your nonprofit corporation, you will need to file a certificate of incorporation with the New York Department of State, Division of Corporations. This certificate serves as the organization’s articles of incorporation. This step is critical if you plan on filing for tax-exempt status under Section 501 of the Internal Revenue Code.

    Specifically, to be eligible for a federal tax exemption, the certificate of incorporation must include language stating that the organization’s activities will be limited to one or more of the following purposes:

    • Charitable
    • Prevention of cruelty to children or animals
    • Testing for public safety

    The Internal Revenue Service also requires that the certificate state what the organization’s assets will be used for and what happens to those assets when the organization is dissolved. While not necessarily required by the IRS, New York also requires that the certificate include:

    • The corporation’s name
    • The county where the corporate offices are located
    • The names and addresses of the initial directors
    • If no registered agent is named, the address to which the secretary of state should mail a copy of any service of process it has received on your organization’s behalf
    • Provisions regarding how the corporation will govern its internal affairs

    The Department of State website has a fillable form you can use to file your certificate of incorporation.

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    There Are 7 Steps To Start & Form A 501c3 Nonprofit Organization:

  • Planing, writing a Mission Statement, and doing a State Business Name Search
  • Filing the Nonprofit Articles of Incorporation, Dont Pay a Cent to Anyone
  • Assemble your Board of Directors and conduct your first board meeting.
  • Creating the Nonprofit Bylaws. Bylaws are required by the IRS for filing your 501c3 tax exemption application.
  • Creating the Nonprofit Conflict of Interest Policy. Conflict of Interest Policy is required by the IRS for federal tax exemption status.
  • Applying for the Employer Identification Number . EIN is FREE, do not pay for it.
  • Preparing your form 1023 application for 501c3 tax exemption online on pay.gov. Step by step instructions are provided here.
  • All these 7 steps are painstakingly explained in detail on this page as you go down, but you cant start a nonprofit without knowing which kind you should start to begin with. So lets understand the types, pros and cons and qualifications for each type.

    If youre staring a church or a religious ministry, along with this guide you should also read the Church 501c3 Exemption Application & Religious Ministries section as it breaks down the church and religious specific issues and laws.

    Should You Start A Private Operating Foundation

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    A private operating foundation as it names suggest is any private foundation like above with a major difference that it has some sort of programs other than grant making and spends at least 85% of its revenue on its exempt activities.

    To start a private operating foundation you have to meet one of the following tests:

    Private Operating Foundations are not very common as most people either choose a private foundation or a public charity.

    Ive written an in-depth article on How to Start a Private Foundation in case youre interested.

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    Register For Charitable Solicitation

    If you plan on soliciting and accepting charitable donations, youll need to register with the NYS Attorney General .

    If youll be soliciting donations outside of NYS, you should review the other states requirements and register if required. But inside of NYS, any charitable and nonprofit corporations must register.

    Your initial registration can be online, has a $25 fee, and will take about two to three months. Youll need the signature of your President and CFO and the Attorney Generals provided checklist for any forms or attachments.

    If your charitable organization will receive less than $25,000 and you dont use a professional fundraiser or its a religious, educational, or membership organization, PTA, government agency, hospital, skilled nursing facility, treatment center, volunteer firefighter, or ambulance service, historical society, or appeals for individuals you can register a one-time exemption form online.

    Once your initial registration is complete, youll need to file annually four and a half months after the end of your fiscal year. You will need your Form 990, unredacted Form 990 Schedule B, fundraising contacts, and some will need their audited financials. This can cost $0-$1500, depending on your net worth.

    Criteria for filing online

    If you made more than $250,000 in gross revenue and support in a year, youll need to file annual financial reports. This costs $25 and you should file them four and a half months after the end of your fiscal year.

    Annual Filing Requirements To Maintain A New York Nonprofit

  • NEW YORK STATES ATTORNEY GENERAL:
  • File Form CHAR500 + a copy of Form 990, 990-PF and 990-EZ
  • Note that the due date is 4 and a half months after the end of the fiscal year
  • Send to:
  • New York State Attorney Charities Bureau 120 Broadway, 3rd Fl., New York, NY 10271-0332
  • Filing Fees
  • The filing fee is $25 if net worth id less than $50,000
  • The filing fee is $50 if net worth is $50,000 or more, but less than $250,000
  • The filing fee is $100 if net worth is $250,000 or more, but less than $1,000,000
  • The filing fee is $250 if net worth is $1,000,000 or more, but less than $10,000,000
  • The filing fee is $750 if net worth is $10,000,000 or more, but less than $50,000,000
  • The filing fee is $1,500 if new worth is $50,000,000 or more.
  • The filing fee is $10 if revenue is $250,000 or less, and $25 if revenue is more than $250,000.
  • Audit: no audit is required if the revenue is less than $250,000
  • Submit audited financials and independent CPAs review report id the revenue is between $250,000 and $500,000
  • Submit independent CPAs audit and opinion letter if revenue is above $500,000.
  • For more information,
  • 416-8000
  • 416-8401
  • File the Annual Return Form 990
  • Note that the due date is 4 and a half months after the end of fiscal year.
  • Send to:
  • Internal Revenue Service 1160W 12th Street Ogden, UT 842201
  • There is no filing fee.
  • For Public Charities: Please go to the IRS website to determine which of the three forms to file: Form 990, Form 990-EZ, or Form 990-N.
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    Whether Youre A Large Organization With A Storied Legacy Or A Small Nonprofit Still Building Your Base The Nonprofit Excellence Awards Are Designed To Help You Reach Your Full Potential

    When you apply for the Nonprofit Excellence Awards, we want to hear about your best practices in each of the Key Areas of Nonprofit Excellence. What activities, policies, systems, and structures do you use to best manage your organization? How are you innovative? What are you proud of in terms of your management practices? These are the questions that well ask you to answer:

    How To File The New York Certificate Of Incorporation

    1023-EZ Tax-Exempt Status Application for Non-profit Organizations: Filed Online

    You must submit your Certificate of Incorporation by mail, by fax, or in person.

    Fax your Certificate of Incorporation to 474-1418 or submit it to the address below:

    Department of StateDivision of Corporations, State Records and Uniform Commercial CodeOne Commerce Plaza99 Washington Ave., Suite 6000Albany, NY 12231

    The filing fee is $75.

    • Checks and money orders must be made payable to the “Department of State”
    • Cash payments will only be accepted in person.
    • Accepted credit cards include Visa, MasterCard, and American Express

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    Secure Any Necessary State Agency Approval

    Depending on your nonprofit’s purpose, you may need to get the written approval of a state agency to incorporate legally. Some common types of nonprofit corporations that must secure agency approval include:

    • Educational or organizations founded to promote knowledge
    • Facilities that offer adult daycare
    • Hospitals or health services
    • Organizations for the care of children, victims of domestic violence, or destitute mothers
    • Programs for substance abuse
    • Trade or business associations

    Preparing The Conflict Of Interest Policy

    Another very important document that the IRS requires from those who are starting a nonprofit organization is the Conflict of Interest Policy. Not only is the conflict of interest policy is required by law, it is a vital tool to combat corruption in new 501c3 nonprofits and public charities. In a day and age that nonprofits are increasingly run by mafia style boards, comprised of paid family members and directors, the need for a solid and functional nonprofit conflict of interest policy is magnified.

    In my opinion, and its not only mine, it is the IRSs opinion that a conflict of interest policy is the most important organizational document that your nonprofit can possess and it is fundamental a piece in starting a nonprofit, maintaining the tax exempt status of the corporation, its reputation, and standing.

    Many people have only a vague idea of what conflict of interest actually is or even how to deal with it. I explain in depth in this page what conflict of interest is, how to avoid it, and I have provided an easy to follow template to help draft your nonprofit conflict of interest policy that you can find here.

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    Get New York State Tax Identification Numbers And Accounts

    NYS doesnt offer a consolidated state tax registration application, so youll need to identify and register for any individual tax accounts that are relevant to your organization and submit them to the NYS Department of Taxation and Finance. If youll be conducting business in NYC, youll also need to register for city taxes with the City of NY Finance Commissioner

    Review the NYS Tax Guide for New Businesses to confirm what tax accounts youll need to register for.

    Compliance On 501c3 Status

    501c3 Application Form

    Once a charity receives 501c3 status, they must comply with the IRS guidelines and requirements to maintain their identifier. While this entails following the general rules of the tax code, it also requires certain documentation to be completed on a yearly basis. Form 990 is one common example of federal compliance, but state and local governments usually have their own compliance stipulations.

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    File Your Nonprofit Certificate Of Incorporation In New York

    The state of New York requires you to file Certificate of Incorporation in order to legally create a nonprofit. The Certificate of Incorporation is a four-page form that contains all the basic information required to register your business. View the New York Certificate of Incorporation form here and follow the state’s guide as you fill it out.

    A standard filing fee of $75 must be included with your application along with the mail submission cover sheet in a PDF submitted by mail. For the return address, enter the name of a designated person and/or company and the corresponding mailing address. If you would like to expedite your filing Opens in a new window, you will need to pay anywhere between $25 and $150 extra, depending on how quickly you want your nonprofit business approved by the state.

    New York also requires additional government agency approval/consent, depending on the purpose of your nonprofit. Page 5 of the state guide to filing a not-for-profit Certificate of Incorporation outlines each business type and the agency that will be required to provide consent.

    Once your Certificate of Incorporation have been accepted by the New York Department of State’s office, your nonprofit is officially formed.

    What information should be included in the Articles of Incorporation?

    This corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for purposes.

    Should You Start A Public Charity

    A public charity is the most common type of exempt 501c3 nonprofit organization which most people associate with and for a good reason. A public charity is a VERY public organization, it is supported by the general public, it raises funds for its exempt activities, and donations to this type of exempt organization IS tax-deductible. Public charities rely heavily on public resources.

    This makes the public charity status the most sought after classification of tax exempt nonprofits, because no corporation or grant maker really want to donate to any other types of nonprofits if they cant get a tax write-off.

    Examples of 501c3 charitable exempt organizations are churches, aid organizations, schools, hospitals, animal rescue organizations and alike. We will concentrate here on Public Charities, however the process is exactly the same for all other types of tax exempt organizations including private foundations.

    Before starting to form a 501c3 nonprofit organization or filing the IRS Form 1023, or even thinking about the mission statement, you need to ask yourself two simple questions:

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    Adopt Bylaws & Conflict Of Interest Policy

    To be eligible to apply for 501 status, your nonprofit is required to have the following two documents:

  • Conflict of interest policy.
  • What are Bylaws? Bylaws are the rules outlining the operating procedures of the nonprofit.

    What is a Conflict of Interest Policy? A Conflict of Interest Policy is the collection of rules put in place to ensure that any decisions made by the board of directors or the officers benefits the nonprofit and not individual members.

    NOTE: The bylaws and conflict of interest policy must be adopted by the nonprofit during its first organizational meeting where the directors and officers are officially appointed.

    How Much Does It Cost To Start A New York Nonprofit Organization

    Step by Step Process for Incorporating a tax-exemption application in the US: Case of New-York

    The filing fee for NY Nonprofit Certificate of Incorporation is $75. The NY Division of Corporations accepts check, money order or credit card. If faxing, use the form. New York will expedite 24-hour processing for an additional $25.

    • NY Charities registration: $25
    • NY tax exemption application fee: $0

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    Hold An Initial Meeting Of The Board Of Directors

    The initial organizational meeting of your board of directors is crucial because it is required to approve the nonprofit corporation’s bylaws, elect directors, appoint officers, adopt a conflict of interest policy, and approve such things as the opening of a corporate bank account. Any decisions made during this meeting must be recorded in the meeting’s minutes so they can be referenced in the future.

    Corporate bylaws are the documents that govern your nonprofit and should be consistent with the information provided on your certificate of incorporation and New York law. The IRS is likely to reject your request for a 501 exemption if the board has not adopted corporate bylaws and a conflict of interest policy by the time the application is filed.

    When I File The Certificate Of Incorporation What Will I Receive From The Department Of State

    Once you file your Certificate of Incorporation, the Department of State sends a filing receipt to the Incorporators listed address.

    This receipt will include the date you filed, the name of your organization, a snapshot of the information in the certificate, and an outline of the fees paid.

    Confirm that all the included information is correct, as this is your proof of filing. Keep it in a safe place with your other records, too, since you cant get another copy.

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