Just like with launching any business, it takes money to get a new nonprofit off the ground. Right away, you’ll need to pay a fee to establish a nonprofit in your state, as well as a fee to file for nonprofit status with the Internal Revenue Service (IRS). On average in the U.S., it costs about $859 in state and federal fees to start a nonprofit organization.
On top of that, you’ll likely face other administrative and operating costs, such as legal fees, office rent, equipment, supplies, marketing, and staff. Read on for a closer look at how much it costs to start a nonprofit organization, as well as tips for how to get the funding you need to get up and running.
Key Points
• Filing fees for forming a nonprofit vary by state, typically ranging from $50 to $500, depending on location.
• Applying for tax-exempt status with the IRS costs $275 to $600, depending on the form used (Form 1023-EZ or Form 1023).
• Expenses for marketing, office supplies, technology, and staff salaries should be budgeted to ensure smooth operations from the start.
• Initial investments in fundraising tools and compliance with state regulations (e.g., annual reports, permits) are essential, adding to the overall startup expenses.
• You can pay for nonprofit startup costs with startup grants, crowdfunding for nonprofits, fundraising, and small business loans.
What Are the Costs Associated With Starting a Nonprofit?
How much it costs to start a nonprofit organization will depend on where you plan to open it, the type of nonprofit you want to create, and whether you’ll need office space and staff. Here’s a look at some nonprofit startup costs you may need to budget for.
Filing Fees
To get your startup nonprofit going, you’ll have to pay some filing fees. This includes incorporating with the state where you’ll be running your nonprofit (for specific costs see the chart below).
Once you have your articles of incorporation, you’ll need to apply for tax-exempt status with the Internal Revenue Service (IRS). There are two options: If you file Form 1023, the fee is $600; if your nonprofit meets certain criteria, you can file form 1023-EZ and pay only $275.
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Legal Fees
To officially form your nonprofit, you’ll likely need some help from a lawyer to make sure you are doing everything correctly. You may be able to get by with an online legal service or you may need to hire a lawyer. In some cases, lawyers will reduce or waive their fees to assist a nonprofit.
Legal consultation and professional services for drafting bylaws or business plans can add $1,000 to $2,500 in startup costs.
Office Space and Equipment/Supplies
Unless you are able to operate your nonprofit out of your home, you’ll need to rent an office and pay monthly rent, utilities, and internet fees. Whether or not you work from your home or a rented space, you’ll need to account for any equipment or office supplies you’ll need, including computers/laptops and some type of fundraising software.
Employees
Unless you plan to run the nonprofit on your own, you’ll likely need to hire some staff. These may be part-time, full-time, or freelance. What their roles will be and how many employees you’ll need will depend on the size and type of nonprofit you’re forming. You’ll also want to budget a salary for yourself.
Marketing
To achieve your mission, you’ll need to get the word out about your nonprofit. A strong marketing program can help advocate for your mission, as well as attract donors and volunteers. Marketing costs may include a website, blog, newsletter, and social media. You may be able to do some of these things yourself; other projects will likely require hiring outside help, such as a website designer.
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How Much Does It Cost to Start a Nonprofit in Each State?
Once you’ve developed your nonprofit idea, written your mission statement, and assembled your board, you’ll need to establish your nonprofit as a business in your state.
The fees and required forms to do this will depend on what state you plan to operate in. Here’s a look at fees for name registration/reservation and nonprofit articles of incorporation for each state.
| State | Nonprofit Startup Fees |
|---|---|
| Alabama | Name registration: $28 Nonprofit Articles of Incorporation: $40 |
| Alaska | Name registration: $25 Nonprofit Articles of Incorporation: $50 |
| Arizona | Name registration: $10 Nonprofit Articles of Incorporation: $50 |
| Arkansas | Name registration: $22.50 online; $25 paper application Nonprofit Articles of Incorporation: $45 online; $50 paper application |
| California | Name registration: $10 Registration of Unincorporated Nonprofit Association: $10 Nonprofit Fees: $45 |
| Colorado | Name registration: $25 Nonprofit Articles of Incorporation: $50 |
| Connecticut | Name registration: $60 Nonprofit Fees: $165 |
| Delaware | Name registration: $75 Nonprofit Articles of Incorporation: $89 |
| Florida | Name registration: $35 Nonprofit Articles of Incorporation: $35 Designation of Registered Agent: $35 |
| Georgia | Name registration: $50 Nonprofit Articles of Incorporation: $100 |
| Hawaii | Name reservation: $10 Nonprofit Articles of Incorporation: $26 |
| Idaho | Name registration: $60 + $20 for manual processing Nonprofit Articles of Incorporation: $30 + $20 for manual processing |
| Illinois | Name registration: N/A Nonprofit Articles of Incorporation: $55 |
| Indiana | Name registration: $20 (for 120 days) Nonprofit Articles of Incorporation: $30 |
| Iowa | Name registration: $10 Nonprofit Articles of Incorporation: $20 |
| Kansas | Name registration: $30 (for 120 days) Nonprofit Articles of Incorporation: $20 |
| Kentucky | Name registration: $20 Nonprofit Articles of Incorporation: $58 |
| Louisiana | Name registration: $25 Nonprofit Articles of Incorporation: $165 |
| Maine | Name registration: $5/month Nonprofit Articles of Incorporation: $40 |
| Massachusetts | Name registration: $30 Nonprofit Articles of Incorporation: $40 |
| Michigan | Name registration: $10 Nonprofit Articles of Incorporation: $20 |
| Minnesota | Name registration: $30 by mail; $50 in-person and online Nonprofit Articles of Incorporation: $90 online and in-person; $70 by mail |
| Mississippi | Name registration: $25 Nonprofit Articles of Incorporation: $52 |
| Missouri | Name registration: $25; $30 for LLC Nonprofit Articles of Incorporation: $27 |
| Montana | Name registration: $10/year Nonprofit Articles of Incorporation: $20 |
| Nebraska | Name registration: $30 Nonprofit Articles of Incorporation: $22 |
| Nevada | Name registration: $25 Nonprofit Articles of Incorporation: $50 |
| New Hampshire | Name registration: $50 Nonprofit Articles of Incorporation: $25 |
| New Jersey | Name registration: $50 Nonprofit Articles of Incorporation: $75 |
| New Mexico | Name registration: $10 Nonprofit Articles of Incorporation: $25 |
| New York | Name registration: $75 Nonprofit Articles of Incorporation: $89 |
| Missouri | Name registration: $30 Nonprofit Articles of Incorporation: $62 |
| North Dakota | Name registration: $10 Nonprofit Articles of Incorporation: $40 |
| Ohio | Name registration: $39 Nonprofit Articles of Incorporation: $99 |
| Oklahoma | Name registration: $10 Nonprofit Articles of Incorporation: $25 |
| Oregon | Name registration: $50 Nonprofit Articles of Incorporation: $50 |
| Pennsylvania | Name registration: $70 Nonprofit Articles of Incorporation: $125 |
| Rhode Island | Name registration: $20 Nonprofit Articles of Incorporation: $37.50 |
| South Carolina | Name registration: $25 Nonprofit Articles of Incorporation: $25 |
| Tennessee | Name registration: $20 Nonprofit Articles of Incorporation: $100 |
| Texas | Name registration: $40 Nonprofit Articles of Incorporation: $25 |
| Utah | Name registration: $22 Nonprofit Articles of Incorporation: $36 |
| Vermont | Name registration: $50 Nonprofit Articles of Incorporation: $125 |
| Virginia | Name registration: $10 Nonprofit Articles of Incorporation: $50 + $25 filing fee |
| Washington | Name registration: $30 Nonprofit Articles of Incorporation: $30 |
| West Virginia | Name registration: $25 Nonprofit Articles of Incorporation: $25 |
| Wisconsin | Name registration: $10 Nonprofit Articles of Incorporation: $35 |
| Wyoming | Name registration: $60 Nonprofit Articles of Incorporation: $25 |
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Funding Methods for Nonprofits
Once you have an idea of how much money you will need to start a nonprofit, your next question will likely be — where can I get it? The good news is that there are a number of different funding options for nonprofits at all stages. Here are a few you may want to consider.
Grants
When you’re launching a new nonprofit, a startup grant can give the funds you need to rent office space, hire employees, market your nonprofit, and initiate programs. Grants for new nonprofits are offered by grant-giving foundations, local and state governments, and corporations. You might start your search at Grants.gov.
Small Business Loans
While loans are generally associated with for-profit businesses, nonprofit businesses can also sometimes qualify for different nonprofit small business loans. If you have strong personal credit and your startup nonprofit is already generating revenue, you might try applying for a loan through your local bank or credit union (if they lend to nonprofits). Otherwise, consider exploring alternative business loan options, which are typically offered by online lenders.
Crowdfunding
There are many different types of crowdfunding, but the type nonprofits typically use is the donation-based crowdfunding model. This involves asking large amounts of people to donate small amounts of money, typically via an online crowdfunding platform. You can launch a crowdfunding campaign to raise startup funds for your nonprofit or to fund a specific program within your organization.
Fundraisers
Fundraisers are often the primary means a nonprofit uses to generate revenue. You may choose to do a mix of virtual and in-person charity events, such as a walk-a-thon, gala dinner, concert, trivia night, or online auction.
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The Takeaway
How much it costs to start a nonprofit isn’t a cut and dry answer. Total startup costs will depend on your state’s filing fees, whether you need to fill out a Form 1023 or 1023-EZ with the IRS, and what type of office, equipment, and staff you’ll need to launch and operate your nonprofit.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What are the startup costs for nonprofits?
The main initial costs involved in starting up a nonprofit are filing and administrative fees. Once your organization is registered, you’ll also encounter other costs, such as office space, supplies/equipment, staff, and marketing.
What is needed to start a nonprofit organization?
The first step to starting a nonprofit is to register your organization as a limited liability company (LLC) or corporation. Once that’s done, you’ll need to file for tax-exempt status with the Internal Revenue Service (IRS).
What expenses do nonprofits have?
Nonprofits typically have expenses such as salaries and wages, program costs, office supplies, rent, utilities, and marketing. They may also incur costs for fundraising activities, administrative overhead, insurance, and legal services.
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