How to Start a Nonprofit in Ohio
Explore every other option first.
There are already hundreds of nonprofits in Ohio, each struggling to fulfill its mission and make ends meet. Invest your passion and energy into an existing nonprofit with similar goals – don’t start a new one that will increase competition for already-scarce funding, volunteers and public attention.
The only exception to this rule is if:
You have gathered information to document an unmet need in the community.
You have met with existing nonprofits performing similar work, and they are unable or unwilling to develop a plan with you to meet this need.
You have identified at least five people committed to donating time and money to start a new nonprofit.
Organize an initial planning group. The first step to starting a nonprofit is organizing the individuals committed to the new effort into a planning group. By pulling this group together early on, you will benefit from a range of viewpoints on your issue and give group members a greater stake in the organization. Eventually, these individuals will likely serve as the foundation for your new nonprofit’s board of directors.
Create a mission statement. The mission statement defines the purpose of the organization, including what services are going to be provided, who they will be provided to and for what reason. The mission statement helps define the types of activities the organization will pursue and those it will not. Work with your planning group to come up with a short, powerful statement that encapsulates your reasons for starting this new nonprofit.
Choose your nonprofit’s name and make sure it isn’t already being used. To determine if the name you want to use is available, go to the Ohio Secretary of State’s website and click on “Business Filings” and then “Name Availability”. You can also check name availability by calling the Ohio Secretary of State’s office at (614) 466-3910. Your name must be distinguishable from all other businesses and nonprofits. The Secretary of State’s website offers detailed instructions on how to use the name search function and how to determine if your name is different enough from others that may be similar.
Form a corporation. Although it isn’t required, almost all nonprofits choose to incorporate. Doing so provides substantial protection from personal liability for board members and other individuals involved with the organization. To form your corporation, complete the Initial Articles of Incorporation Form (available on the Ohio Secretary of State’s website) and submit with a check for $125.00 payable to “Ohio Secretary of State.” Keep in mind that the required statement of purpose and any additional attached information must be carefully written because this will eventually be used to determine whether or not your new organization qualifies as tax exempt. For a more detailed discussion of what can be included within the Articles of Incorporation, download the Secretary of State’s “Guide to Nonprofit Organizations in Ohio”.
The IRS website also provides information on what to include and offers sample language that meets the requirements of the law.
Appoint a Statutory Agent. This sounds complicated, but it really just means selecting an individual to represent and accept mail on behalf of the corporation. The Original Appointment of Statutory Agent Form is attached to the Initial Articles of Incorporation Form on the Ohio Secretary of State’s website. This form must be submitted at the same time as your incorporation form.
Request an Employer Identification Number (EIN). This is like the social security number for your nonprofit and, even if you don’t plan to hire employees, you’ll need it to complete required forms for establishing your nonprofit. The one-page IRS Form SS-4 can be downloaded or completed online. There is not filing fee for this service.
Register your nonprofit’s name. If your name is not being used already, you’ll need to register it by filling out and submitting the Name Registration Form (also available on the Ohio Secretary of State’s website) with a check for $50.00 payable to “Ohio Secretary of State”. Please note - there is no differentiation between for-profit and nonprofit corporations on this form. As this form asks for your corporation charter number, you will need to wait until you’ve received confirmation of your incorporation before registering your name.
Develop bylaws. Bylaws provide the rules by which an organization operates and typically include information about the board, its elections, officers and committees as well as how decisions are made and how changes to the bylaws can be made. These sample bylaws provide an example of what to include.
Create your board of directors and begin meeting. Using the guidelines established in your bylaws, formalize your planning group into a board of directors, perhaps inviting additional individuals as well if appropriate. Select a regular time to meet (usually once each month) and be sure to keep minutes documenting who was in attendance, major points of discussion and any decisions made.
Apply for nonprofit (501(c)(3)) status. This designation means that you don’t have to pay taxes on your income, and donations to your organization are tax deductible. If you eventually hire an employee, you will still have to pay payroll taxes and, if you generate unrelated income, you may have to pay income taxes on that revenue. Nonprofit status is determined by the IRS and requires paying a filing fee of $300 ($750 if you anticipate revenue of more than $10,000 per year) and submitting Form 1023.
This form is long and intimidating, and many organizations get help from an attorney and/or accountant to complete it. If you can’t afford professional help, line-by-line instructions are provided by the IRS and the Regional Nonprofit Alliance can help answer questions and review your completed form before you submit it (keeping in mind that we aren’t attorneys and can’t provide legal advice). The IRS will send back a Determination Letter approving your nonprofit status. Hold onto this letter as you will be required to submit a copy to the state and with most grant applications.
Register with the Ohio Attorney General. Most nonprofits are required to submit two forms to the Ohio Attorney General. The first is the Charitable Trust Registration Form which all new organizations must submit along with a copy of their 501(c)(3) Determination Letter from the IRS, Articles of Incorporation and Bylaws. In addition, nonprofits that plan to ask for financial donations must also submit the Charitable Organization Registration Statement for Charitable Solicitation in the State of Ohio, along with another copy of their 501(c)(3) Determination Letter from the IRS, Articles of Incorporation and Bylaws. In addition, a fee is required if your organization anticipates raising more than $25,000 during your first year. These forms and more detailed instructions can be downloaded from the Ohio Attorney General’s website.
Links to Federal and State Nonprofit Requirements
The Internal Revenue Service provides detailed information about the federal paperwork necessary to start and maintain a nonprofit.
An overview of Ohio nonprofit law can be found in The Guide to Nonprofit Organizations in Ohio published by the Ohio Secretary of State.
Information on registration requirements for West Virginia nonprofits is available on the website of the West Virginia Secretary of State.
Additional information is available through the West Virginia State Tax Department
State-specific legal information for Kentucky nonprofits is available on the website of the Kentucky Secretary of State.
The Kentucky statutes regarding nonprofits are also available for review online.