Starting a nonprofit is exciting, but if you’ve been wondering how much it actually costs to set up a 501(c)(3), you’re not alone. There’s no one-size-fits-all answer because it depends on a few key things, like where you live, how you apply, and whether you’re doing it all yourself or getting some help.
In this guide, we’ll break down the real costs involved, state fees, IRS forms, legal help, and even things like websites and marketing. We’ll also show you a few ways to save money while doing it right the first time. If you’re just getting started, this article will help you plan with confidence and avoid expensive mistakes.
The total cost to start a nonprofit organization
Starting a nonprofit isn’t just about passion, it’s about paperwork and planning too. And while the cost can vary, it usually falls into a few main categories. Think of it like setting up the foundation of a house: you’ve got to pay for the land (state filing), the permits (IRS approval), and maybe even an expert or two to make sure everything’s solid.
One big thing that affects cost is where you're starting your nonprofit. State fees change depending on location. Then there's the question of how you apply: do you use the longer form or the easier one? And finally, do you hire someone to help, or go it alone?
The goal here isn’t to scare you with numbers, it’s to help you plan ahead so you're not caught off guard. We’ve seen plenty of organizations run into delays or pay double because they didn’t know what to expect. So we’ll walk through each part clearly and simply, just like we would for one of our own partners.
The difference between form 1023 and form 1023-EZ
When you apply for 501(c)(3) tax-exempt status, you’ll need to file with the IRS, and that’s where form 1023 comes in. But did you know there are actually two versions? Form 1023 is the full application. It’s detailed, takes more time, and costs $600 to file. Then there’s form 1023-EZ, which is shorter, easier, and only costs $275.
Sounds like a no-brainer, right? Not always. The EZ form is only available to smaller nonprofits, usually ones that expect less than $50,000 in annual income and have less than $250,000 in assets. It’s a great option if you qualify, but if your plans are bigger or your structure is a little more complex, you’ll probably need the full version.
We’ve helped nonprofits go through both, and here’s what we always say: choose the one that fits your organization now and makes room for where you’re headed. Rushing through the wrong form can lead to delays or denials, and no one wants that.
Breakdown of incorporation and registration fees
Starting a nonprofit means making it official with your state, and that usually starts with filing something called the articles of incorporation. Think of it like the birth certificate for your organization. Every state charges a fee for this, and the amount can range from around $50 to over $300, depending on where you’re located.
Once you’re incorporated, you’ll also need an Employer Identification Number (EIN). Don’t worry, that part’s free. You can get it online from the IRS in just a few minutes. But then comes something a lot of folks forget: charitable solicitation registration. If you plan to ask for donations, whether online or in person, many states require a separate registration, and those fees can add up, especially if you’re working across state lines.
These steps sound small, but skipping one can slow you down later. We’ve seen organizations set everything up perfectly, only to hit a wall when they start fundraising and realize they’re missing a required registration. Getting all this in order up front saves a ton of time (and money) down the road.
Federal costs and tax exempt status application
After getting your state paperwork in order, it’s time to go federal. This is where you apply to the IRS for tax-exempt status, which gives you the official 501(c)(3) label. This status means your nonprofit won’t pay federal income taxes, and your donors can make tax-deductible contributions.
The main cost here is the IRS filing fee: $600 for the standard form 1023 or $275 for the simplified 1023-EZ, if you qualify. This is a one-time fee, but it’s a big step. The IRS will review your structure, mission, and finances to decide if your nonprofit qualifies. It’s important to get this right the first time, since re-filing can take months and delay your plans.
Some nonprofits also apply for a federal sales tax exemption, depending on their activities and state laws. While not always required, it can save money over time, especially if you’re buying a lot of supplies or running events.
This step can feel overwhelming, but you don’t have to figure it out alone. We’ve helped partners navigate this exact process, and we know where things get tricky (and how to avoid them).
Legal support and professional services
You might be wondering: do I really need a lawyer to start a nonprofit? The answer is, it depends. Plenty of small nonprofits do it themselves using online guides or services, and that can work just fine. But if your structure is complex or you're filing in multiple states, legal support can make a big difference.
Hiring a lawyer can cost anywhere from a few hundred to a few thousand dollars. It’s not cheap, but it might save you money in the long run if it helps you avoid mistakes. Some lawyers even offer flat-rate packages for nonprofit startups. And don’t forget, there are pro bono options out there, too, especially if your mission is strong and your budget is tight.
At Harness, we work with all kinds of nonprofits, whether they’ve gone the DIY route or hired a full team. What we’ve seen time and again is this: having someone in your corner, whether it’s a legal expert or a trusted partner like Harness, helps you focus on your mission, not just the paperwork.
Hidden and ongoing nonprofit startup costs
The startup costs don’t stop once you’ve filed your paperwork. There are a few expenses that sneak up on a lot of new nonprofits, and they can add up fast if you’re not ready for them.
First, there’s admin stuff. Even a small team needs some basics like insurance, bookkeeping tools, or a shared email account. If you’re renting office space or even working out of a shared co-working spot, those bills start showing up fast.
Next is your digital presence. Every nonprofit needs a website, and while it’s tempting to go with a free builder, that can hurt your credibility. Domain names, website hosting, and nonprofit software tools for fundraising or donor tracking are worth investing in. We’ve seen firsthand how a solid, clean website makes a huge difference in how donors see your cause.
Then there’s marketing, flyers, business cards, social media ads, or email platforms. These aren’t just extras. If no one knows about your nonprofit, it’s hard to grow.
Most of the organizations we work with are surprised by these costs at first, but planning for them early makes life so much easier later. Think of it like keeping the lights on so your mission can shine.
Realistic estimate of total cost to start a 501(c)(3)
So what’s the bottom line? Most nonprofits spend anywhere from $500 to $2,500+ just to get off the ground. The exact number depends on how you handle the steps we’ve talked about, DIY or hire help, file the long form or the short one, go basic or invest in extras early on.
Here’s a rough breakdown to help you picture the options:
- DIY route: If you qualify for the 1023-EZ and file everything yourself, you might spend around $600–$1,000 total (state fees, IRS fee, domain name, and software basics).
- Mid-range support: Add in some help from an online service or consultant, and you’re looking at $1,200–$1,800.
- Full-service help: If you work with a lawyer or get full support for setup and branding, the cost could be $2,500 or more.
There’s no one right answer here. The key is to match your budget with your bandwidth. Some folks have time but no money, others are the opposite. Either way, plan it out so you’re not caught by surprise. We’ve seen too many people get halfway there, then stall out because they didn’t budget for that “last little step.”
Doing it the right way
Starting a nonprofit takes more than heart, it takes a plan. Knowing the real costs helps you avoid setbacks and start strong. Whether you go the DIY route or bring in help, the most important thing is setting your organization up the right way, so it lasts.
We’ve worked with a lot of founders who were surprised by how many little details came up. But once everything’s in place, you can focus on your mission, your donors, and your impact, not just paperwork and forms.
If you're ready to grow your mission with less stress, Harness is here to help. From building your website to creating your fundraising strategy, we give you the tools and support you need to thrive, without feeling overwhelmed.
