Starting A Nonprofit In Indiana
Launching a Nonprofit
Starting a nonprofit in Indiana: you can do it yourself, or we can help.
You have a vision for making your community better. You are not alone. There are 64,000 active nonprofit corporations in Indiana. Will you make that number 64,001?
Should I start a nonprofit?
Founding a nonprofit is not the right solution for every organization. There are pros and cons to launching your own nonprofit. You probably have an idea about some of the potential advantages such as tax exemptions, receiving charitable donations, and access to grants, but can you describe the disadvantages? For a short video talking about the pros and cons of starting a nonprofit, check our YouTube channel or download our One Pager on the pros and cons of starting a nonprofit.
Still not sure? Before you invest your time and money, you might want to consult an attorney to evaluate whether nonprofit status is right for your specific situation. If you would like to schedule a free 30 minute consultation about the pros and cons of founding your own nonprofit organization, you can schedule a call here.
DIY: How to start a nonprofit in Indiana.
If you've decided that establishing a nonprofit is the right decision, the bare minimum under Indiana law for starting a nonprofit is to:
Draft articles of incorporation
There are six items that are required to be included in the articles of incorporation and four optional items. If you are planning to seek tax exemption from the IRS, there is particular language that they will be looking for in the articles of incorporation about what activities the organization can do and what will happen to the nonprofit's assets if and when it dissolves. If you have been told by the IRS that your articles of incorporation prevent you from getting tax-exempt status, there is information about amending your corporate papers here.
You can download a free fillable form of articles of incorporation from Indiana's Secretary of State here.
File the articles of incorporation with the state
Secretary of State
Business Services Division
302 West Washington Street, Room E018
Indianapolis, IN 46204
Draft bylaws of the nonprofit
Indiana corporations, including nonprofits, are required to have bylaws. The bylaws "may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with any law or the articles of incorporation." The point of bylaws is to set out how your nonprofit is going to be run. The bylaws can be adopted by the incorporators (if no directors have yet been chosen) or by the first board of directors.
Appoint or elect the founding members of the board of directors
A nonprofit corporation in Indiana is required to have a board of directors. The articles of incorporation or bylaws will set out the number (but not less than three) and terms of services of the directors (the default is one year, but can be up to five years).
Conduct the first "organizational" meeting
Once the nonprofit is incorporated, there must be an initial organizational meeting, called by the incorporators (if there are not yet any directors named) or by the directors. You will want to keep minutes of the actions taken at the organizational meeting (and every subsequent meeting for that matter) and keep those records at your organization's principal place of business.
After establishing the nonprofit, you might want to:
Apply for tax exempt status from the IRS
The IRS says this: "Although most federal tax-exempt organizations are non-profit organizations, organizing as a non-profit organization at the state level does not automatically grant the organization exemption from federal income tax. To qualify as tax-exempt from federal income taxes, an organization must meet requirements set forth in the Internal Revenue Code."
If you want to be tax-exempt, you will need to file an application with the IRS. Those forms are required to be filed online now. If you want to be treated as a 501(c)(3), you file a form 1023 (filing fee of $600) or 1023-EZ (filing fee of $275). If you want to be treated under a different section of 501(c), you file a form 1024 (filing fee of $600). If you want to learn more about the difference between 501(c)(3) and the other subsections, check out our YouTube video here.
Apply for an Indiana sales tax exemption
Tax-exempt organizations can receive an Indiana sales tax exemption by filling out form NP-20A and mailing it to the Indiana Department of Revenue. You can download the form here.
Starting your nonprofit on a solid foundation involves more than doing the bare minimum. Your next steps might include:
Completing a conflict of interest policy and training your key personnel on it
Creating a policy on executive compensation
Drafting volunteer liability waivers
Building your employee handbook
Legal help in starting your Indiana nonprofit.
For clients who have hired M.G. Morris Law, P.C., as their Outside General Counsel, the start-up package includes all of the above, and it is automatically included in your legal services subscription. To discuss, log in to your secure client portal and send a message, or just call the firm. If you would like to schedule a phone or video call, you can do so via this link.
If you are not yet a client, the firm offers a flat-fee nonprofit startup package. Learn more about what is included in the flat fee package here.
If you would like to learn more about the firm's Outside General Counsel service, there is more information here.