Tuesday, June 18, 2024

How To Create A Nonprofit Organization In New York

Choose A Nonprofit Corporation Structure

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

At this point, youll need to confirm what your nonprofit corporation structure is going to be. NYS defines nonprofit corporations as two basic structures: religious and non-religious.

If your nonprofits purpose is to allow members to meet for divine worship or religious observations, then you can file as religious. Every other purpose must be filed as non-religious, and as Type A, B, C, or D. If your organization falls into multiple types, you will file as the latter type meaning if youre both Type A and B, you will file as Type B, etc. The Types are classified as:

  • A: Your non-business purposes are civic, patriotic, political, social, fraternal, athletic, agricultural, horticultural, animal husbandry, and for a professional, commercial, industrial, trade or service association.
  • B: Your non-business purposes are charitable, educational, religious, scientific, literary, cultural or for the prevention of cruelty to children or animals.
  • C: Your business purposes serve a public or quasi-public objective.
  • Please note that when you file the Certificate of Incorporation for this type, you need to include a statement identifying the public or quasi-public objectives for each business purpose youll pursue.
  • D: Your organization conducts any business or non-business not otherwise outlined above, regardless of whether you also fall under A, B, or C.

If you have any questions or confusion over terms or designations, you can review section 102.

Recruit Directors And Elect Officers

The board of directors serves as a corporation’s governing body. Until recently, New York law allowed not-for-profit corporations to have a single member elect its board. But in December 2018, the state enacted a new law to increase the number of required voting members from one to three. The change was made to keep nonprofit corporations from furthering the private interests of a single person.

New York law requires that you name at least three directors to your nonprofit corporation. Each director must be at least 18 years old . Still, there is no requirement that the director be a state resident or a member of the organization. Terms for directors must be between one and five years. Additionally, New York requires that you name a president, at least one vice-president, a secretary, and a treasurer to serve a one-year term.

Create A Marketing And Content Plan

It can be tempting to let your marketing develop organically, but doing so presents more problems than benefits. If you dont have a strong marketing strategy early on in developing your nonprofit, you can find yourself constantly dealing with an inconsistent and inaccurate public perception of your nonprofit, difficulty when fundraising, and a lot of wasted time and effort.

Create a marketing and content plan. Consider how you will communicate with your audiences . If youve done this while creating your nonprofit business plan, add in more details now.

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Apply For New York State Nonprofit Tax Exemptions

Nonprofit organizations eligible for a number of tax-exemptions in New York State. These include exemptions from New York State corporate franchise tax , New York City general corporation tax , and property tax. Charitable nonprofits, particularly 501 nonprofits, may also qualify for an exemption from New York State sales and use tax.

There are no fees for applying for New York state tax exemptions. Information to apply for the various tax-exemptions available are as follows:

Basics Of Nonprofit Organizations

How to Start a Nonprofit Organization in New York

Because of the exemption from federal taxes, tax deduction available for donors, and access to public funds, nonprofit organizations are subject to government scrutiny. This protects the public by ensuring that these organizations are transparent and accountable through various reporting requirements.

Nonprofits must show that they are free from conflicts of interest and support the public good to qualify for 501 status. Nonprofits are regulated by state agencies as well as by the IRS.

New York is a popular state to form a nonprofit organization, with almost 100,000 currently in existence. This provides a good opportunity for new organizations to align with an existing organization that has a similar mission. If you form a new nonprofit to serve an unmet need, it’s important to take the correct steps to establish this type of organization.

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Properly Sign Legal Documents

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability.When signing legal documents on behalf of your nonprofit, you could follow this formula to avoid problems:

  • Formal name of your organization
  • Your signature
  • Your position in the business as its authorized representative
  • See the image below for an example:

    This ensures that you are signing on behalf of your nonprofit and not as yourself.

    Is There Anything Weird About Incorporating In New York State

    If your nonprofit has a charitable purpose other than religious, you will need a written consent attached to your certificate of incorporation from another NY agency such as nonprofits helping neglected children need approval from NY Office of Children & Family Services. See our NY Nonprofit Agency Approval Contact page for details.

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    How To Write Your Nonprofit Bylaws With Detailed Examples & Samples:

    The following nonprofit bylaws template is arguably the most complete, fully IRS compliant, useful, structured, and proven bylaws on earth. This bylaws is a work of several years, over the years Ive refined it to what it is now. Ive included painstaking instructions and resources so take a good look and familiarize yourself with its articles and sections. Every section explanation and tips are included.

    Start With A Template

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    There are many templates available online that can help you draft your nonprofit bylaws. These templates are easy to use and can help you avoid many of the common mistakes that people make when drafting their own bylaws. These templates can also help you avoid having to hire an attorney, which is a good thing for your organizations finances.

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    Considerations For Starting A Non


    • Incorporating protects your personal assets from your non-profit’s lawsuits and creditor claims. It also protects your trustees, officers and volunteers.
    • New York non-profits are usually exempt from federal tax on any income that’s related to your organization’s exempt purposes.
    • You can obtain an exemption from collecting sales and use taxes if your organization is formed under IRS Section 501.
    • Your non-profit may qualify to receive public and private grant money.


    • Because your non-profit is not owned by you or your shareholders, you won’t have individual control and autonomy over your organization.
    • More paperwork is involved, such as creating bylaws and recording and maintaining corporate minutes.
    • You’ll need time and money to apply for the federal tax exemption, and you’ll need an accountant or legal professional to help you operate your non-profit.
    • Your non-profit’s finances are subject to public inspection.

    Choose Your Organization Type

    Before proceeding further, you must decide what kind of corporate structure your organization will have and obtain any approvals you might need. You will need to choose from the following options:

  • Religious Corporation – there are distinct rules and regulations that are applicable to religious corporations operating in New York. Access further information about starting a religious organization in New York in the Consolidated Laws of New York.
  • Nonreligious Corporation
  • Consent or Approval Required – If your nonprofits purpose is related to any of the following in the graph below, you must obtain approval from the appropriate governing body. This approval must accompany your Certificate of Incorporation application.
  • Organization’s Purpose
    Superintendent of Financial Services

    Read full descriptions of each of these categories in Section 404 of the New York State Senates requirements for nonprofit corporations

    No Consent or Approval Required – if your nonprofit does not fall into one of these categories, you do not have to submit additional approval information with your Certificate of Incorporation application.

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    Is A Nonprofit Right For You

    Public charities must be organized and operated exclusively for exempt purposes set forth in section 501 of the Internal Revenue Code. If you want to start a nonprofit so you can get grants to pay yourself a salary, stop now and find another option. Realistically, many new nonprofits aren’t even ready or eligible to get grants. Learn more about whether a nonprofit is right for you:

    What Is The Difference Between A Foundation And A Nonprofit

    How to Start a Nonprofit Organization in New York

    Foundations are typically funded by a family or a corporate entity, but nonprofits are funded through their revenues and fundraising. Foundations usually take the money they started out with, invest it, and then distribute the money made from those investments. Foundations will also donate these funds to other nonprofits in the form of gifts or grants. Whereas, the extra money a nonprofit makes are used as operating costs to fund the organizations mission. However, this isnt necessarily true in the case of a foundation.

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    Register For State Tax Accounts

    You will need to register for all applicable tax accounts with the State of New York and The City of New York . Read the states tax guidance for new businesses and file for the appropriate state and/or city accounts.For more information, you can call the Department of Taxation and Finance at 485-6027

    How To Create A Nonprofit: Everything You Need To Know

    Ascertain how to create a nonprofit by first understanding what exactly a nonprofit is. New nonprofits are created every day. These nonprofits give back to the community, help those in need, and advance the interests of various groups. There are several key steps that need to be taken when starting a nonprofit.

    How to Start a Nonprofit

    Before attempting to start a nonprofit, it is usually a good idea to consult with an accountant or business attorney that has experience working with nonprofit organizations. There are also state laws that must be followed. It is important to make sure that your organization is legally compliant as well as financially viable. Starting and growing a nonprofit takes a lot of effort and determination.

    Do Your Homework

    Research and analyze the law, your organizations goals and financial prospects, and whether other options would be better. Get support from any organizations that help nonprofits in your community. Make sure your organization will have a reliable revenue stream. Remember that you cannot attract investors looking to earn a profit instead, you need to gain financing from people that believe in the mission of the nonprofit. Also remember that if your personal goal is to earn a high salary, a nonprofit may not be the best choice.

    Nonprofits must be organized according to state laws and should apply for tax exempt status under Section 501 of the IRS Code. They should be structured in a way that they can best support the community.

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    Hold Organization Meeting Of The Board Of Directors

    From here, you should hold your inaugural meeting of the Board of Directors to go over your governing documents and policies, and to designate officers. NYS requires you to appoint a President, at least one Vice-President, a Secretary, and a Treasurer. Each will have a one-year term. The same person can fill multiple offices, as long as they arent the President or Secretary.

    Youll need to confirm your bylaws and conflict of interest policy at this meeting in order to apply for federal tax-exempt status you should also discuss a company bank account and important accounting decisions like your tax year. Youll want to have a plan and take detailed notes so be sure to send an agenda before the meeting and assign someone to take notes.

    How Do I Get Paid If I Start A Nonprofit

    How to Start a Nonprofit Organization – 501c3 Organization

    Nonprofit salary is considered a part of the operating expenses of the organization. You must raise funds through fundraisers or by applying for grants. Your nonprofit can also earn money through other business ventures and by coming up with income generators like fundraiser auctions of donated items, renting a property, selling donated merchandise, making investments, etc.

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    New York Nonprofit Corporation Faqs

    • Can the founder of a New York nonprofit receive a salary?

      A nonprofit founder working as an employee is allowed to earn a salary for their work as long as its not excessive. However, the maximum salary for certain nonprofit executives in New York is $199,000. Whether this cap applies depends on the size of your corporation and whether it receives state money to supply services.

    • What happens if a nonprofit makes money in New York?

      Any money made by the nonprofit must be reinvested into the nonprofit.

    • What kinds of businesses can be a nonprofit in New York?

      Charitable corporations can include museums, colleges, food banks, and low-income housing organizations. Non-charitable nonprofit organizations include business leagues, labor organizations, and recreational clubs.

    • Can New York nonprofits sell products?

      Nonprofit corporations can sell products to help raise money for operational costs and activities.

    New York Small Business Services

    Conduct A Needs Analysis

    Find out if organizations are already doing the same or similar work in your community. It will be harder to get support if you are just duplicating existing services rather than improving or adding to them. Also find demographic or population data that shows a need for your services, and explain how that need is not being met. Where can I find demographic information about my community?

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    Create A Killer Website

    If you havent already, now is the time to create a website. Keep your website updated frequently with new blog articles, pages, photos, and updates.

    If youre interested in how to start blogging, weve written an article about how to start a successful nonprofit blog.

    There are many website builders out there from options like WordPress, Wix, Weebly, and Squarespace to custom builders.

    Pages to include on your nonprofit website.

    • Homepage
    • About page
    • Contact Us page
    • Donation page
    • Join us page
    • Email list sign up
    • Events
    • News/Blog
    • Resources
    • Members Only .

    Pro tip: While an online donation page shouldnt be your only path to accepting donations, its a crucial element of a holistic fundraising strategy of a modern nonprofit. Online giving has grown over the years, and it keeps growing. Unlike many other forms of donating , donation pages are highly shareable. This makes them ideal for increasing your reach, and therefore the number of donations.

    Furthermore, donation pages allow you to collect and track data that can inform your fundraising strategy

    Finally, donation pages make it convenient and simple for your donors to give!

    How To Create A Nonprofit In Ny

    How to Register a Non Profit Organization in New York

    Forming a nonprofit corporation in new york here are the steps to form a nonprofit corporation in new york. Many nonprofits begin with good intentions, but often fall short of their.

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    Why Should You Incorporate

    • Having a formal structure will give credibility to your programs and services.
    • The corporate structure limits the liability of the organization’s officers and directors.
    • The IRS requires organizing documents and governance policies and procedures that are usually associated with corporations.

    Learn more about how to incorporate your nonprofit. Filings and fees will vary by state. Also note, incorporation registers your nonprofit, but it does not make it 501 exempt.

    Frequently Asked Questions About Nonprofit Bylaws

    Whats the purpose of bylaws?

    The purpose of the Bylaws is establishment of rules or set of laws by an organization, whether a for-profit or non-profit, to control its members. Bylaws dictate the degree of control that an organization can have and how it should be enforced. Bylaws are the constitution of an entity.

    Are nonprofit bylaws State Specific?

    No, nonprofit bylaws are not state specific.

    How about bylaws for a church or bylaws for organizations with members?

    The above bylaws can be used for a church and organizations with members. The only section that should be changed is the Article III. If a church has no voting members then there is nothing to change, however if you for some odd reason decide to have voting members, you should change the content of Article III of the church bylaws to include your bylaws membership information. That includes their powers, dues, and manner of election or selection. Nonprofit Bylaws for organizations with members should include your state laws governing nonprofit membership.

    Are nonprofit bylaws public record?

    No, bylaws of nonprofits are not public records, and there are no requirements to make the bylaws public either. However 501c3 nonprofits should absolutely make their governing documents public as they should contain compliance policies.

    How can nonprofits change their bylaws?

    Do you have to notify the IRS for changes to nonprofit bylaws?

    Is it bylaws, by laws, or by-laws, whats the correct term?


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    Nonprofit Membership Classes Member Voting Rights & Affiliates

    This section of the bylaws is designed to regulate whether the corporation can have members, affiliates, or other classes who may influence legislation and programs of the organization.

    A tax-exempt nonprofit organization generally is a member-less organization. You should refrain from allowing members or affiliates influencing your organizations activities and operations. Ive covered the subject of membership in detail in the articles of incorporation page, as why its not a good idea to establish a member driven organization.

    This section does not take into account your board members, they are a completely different class who actually do run the nonprofit organization. See the sample bylaws for nonprofits section below:

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