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What is a Non-Profit?

A nonprofit is an organization that uses its surplus revenues to further achieve its purpose or mission, rather than distributing its surplus income to the organization’s directors as profit.

When starting a nonprofit, you must first be able to clarify what you intend to accomplish with a mission statement. The mission statement describes the overall purpose of the organization. It addresses the question “Why does the organization exist?”

A nonprofit also requires Board Members.  Board Members are usually individuals who are very interested in the mission, can provide time and energy to the organization, and bring a useful expertise (for example, in finances, programming, fundraising, planning).

With a mission statement and a Board of Directors in place, you incorporate your nonprofit by filing articles of incorporation with the State of Pennsylvania.

A nonprofit may apply for tax-exempt status from the Internal Revenue Service.

For more information, The Nonprofit Center at LaSalle University’s School of Business provides many resources for starting and running a nonprofit organization: http://www.lasallenonprofitcenter.org/resources/useful-links-support-organizations-startup-resources/

  1. Do your research – Learn about non-profits their legal, financial, and record keeping requirements.
  2. Determine your mission – What is the purpose of your organization?  Are there other organizations that fill this need?
  3. Determine your legal structure – Will you be an LLC, trust, association, or other legal entity for your nonprofit?
  4. Determine your Board of Directors/Trustees who will run your organization?
  5. Check availability of your organization’s name – the Commonwealth of Pennsylvania requires all organizations to register with the Fictitious Name Registry.  Please check the listing to see if the name you have selected is available.
  6. Create your articles of incorporation in the Commonwealth of Pennsylvania – Articles of Incorporation accompanied by a docketing statement should be filed with the Bureau of Corporations and Charitable Organizations.  In addition, you will need to publish either the intent to file or the actual filing of Articles of Incorporation must be made in two newspapers of general circulation, one a legal journal, if possible. Visit the Pennsylvania Charitable Organization website for more details.
  7. Create the organization Bylaws – Bylaws are the main governing document of a nonprofit corporation. The bylaws define how the nonprofit will run itself.
  8. Create Conflict of Interest Policy – This will detail how business arrangements between the organization and its members. All business arrangements with individuals in a position to influence the organization should be approved by independent persons, make business sense, and for fair compensation.
  9. Apply for an EIN number and a State ID
  10. Apply for 501(c) Tax Exempt Status – Requirements for registering as a 501(c) non-profit organize can vary depending on the organization’s mission.  Please visit the IRS Charities & Non-Profit page for more details.
  11. Apply for Pennsylvania Tax Exempt Status
  12. Apply for a City of Philadelphia Non-Profit Activity License using the eClipse system.