In recent years the number of nonprofits has increased by 10.4%. Nonprofits are essential as they help society by raising money for important charities and different causes around the world.
However, when creating a nonprofit, money is a factor no one tends to think about. After all, how much money do you need to create a nonprofit organization?
Don’t worry with this guide you can find out! From incorporation fees to creating a website, you can learn the true cost to start a nonprofit.
Now, are you ready to get started? Here’s an in-depth look at starting a nonprofit organization:
Each state has its own regulations and additional fees in order to apply for charitable status. Most nonprofits hire an attorney to help with paperwork and aid in the incorporation process. However, a lawyer isn’t required, but having an experienced professional can make the process go by swiftly.
All in all, you’ll most likely spend between $500 and $1,000 just on the incorporation costs alone. If you hire a lawyer, the retainer fee can be upwards of $2,000.
Register for Tax Exemptions
How to manage non profit finances can be challenging; however, one thing you should do is file for tax-exemptions. Normally, nonprofit organizations have around 27 months from the period they incorporate to apply for a tax-exemption.
The cost depends on a few factors. If your plan to raise around $20,000, you can file the 1023 EZ form online. It takes 20 hours to process, and it only costs about $300. However, form 1023 usually takes longer to process and costs a total of $600.
Get Insurance Coverage
All nonprofits need insurance coverage; however, the type of insurance and the cost will vary based on your organization’s needs, what programs you provide, and the services you offer. Although, you’ll probably need general liability insurance. While it costs between a couple hundred and a few thousand, depending on your organization, it can help protect your organization in the long run.
To get a better understanding of nonprofit insurance find a local insurance agent who has worked with nonprofits in the past.
Create a Domain Name and Nonprofit Website
One of the most important aspects of creating a nonprofit organization is creating a website. Your nonprofit website is where people will read your mission, donate, and sign up for volunteer programs. Thus, it shouldn’t look cheap; make sure the website is rich in quality and has many intriguing features.
Overall registering your website’s domain name will cost an average of $20. Although hosting a website can be pretty expensive, most are around $40 a month. However, many plans are annual, so you’ll have to pay for it all upfront.
The True Cost to Start a Nonprofit Organization
Before you create your nonprofit organization, think about all the expenses involved. Make sure to total the incorporation fees, tax costs, and insurance coverage to give you a general idea of what you’ll be spending in the first year.
Don’t forget to include your domain name as well as all your website costs. Try to withstand the urge to be cheap in fundraising, marketing, and website creating. You’ll want to spend extra money on these features to intrigue people to donate and volunteer their time.
For more information about the cost to start a nonprofit organization, visit our website today. We look forward to helping you.