How to start a nonprofit organization in 2025: From idea to impact

This guide breaks it down step by step. No confusing terms, no long detours—just clear, practical advice to help you launch something meaningful. You’ll learn how to check if your idea fills a true need, how to handle legal steps like incorporating and getting tax-exempt status, and how to build the kind of foundation that makes fundraising and growth way easier.

Research community needs and nonprofit feasibility

Before you jump into paperwork or pick a name, stop and ask: Is there truly a need for this nonprofit? It might sound obvious, but it’s an important step that often gets skipped. We’ve seen passionate founders dive in headfirst, only to find out that a similar group already exists—or that the community needs something slightly different.

Start by looking around. Talk to people. See if others are already working on the same problem. If they are, is there a way you could support them instead of starting something new? That’s not giving up—it’s smart collaboration.

Then ask yourself a few honest questions:

• Who will this nonprofit serve?
• What’s the specific problem you want to solve?
• How do you know it matters to others, not just you?
• What does success actually look like?

Also, think about whether starting a nonprofit is the right fit. Sometimes, forming a project under an existing organization—or even starting a business with a social mission—can make more sense.

We always tell our partners at Harness: Starting with a clear need and a focused purpose saves you so much time later. It helps you write your mission, design programs, and talk to donors in a way that actually connects.

Define your mission statement and vision

Now that you’ve confirmed there’s a real need for your idea, it’s time to get clear on what you’re actually setting out to do—and why. This step is all about your mission statement and vision.

Think of your mission like a compass. It should quickly explain what your nonprofit does, who it helps, and how. It doesn’t have to be fancy. It just has to be real. One sentence is enough. The best ones are simple and specific.

For example:
“We provide after-school meals and tutoring to middle schoolers in low-income neighborhoods.”

See how clear that is? Anyone reading it knows exactly what the group does and who it helps. That’s the goal.

Now your vision is a little different. While your mission talks about what you do today, your vision is about the future you’re working toward. What kind of world do you want to help create? What would success look like if everything went right?

A strong mission and vision help guide decisions, attract donors, and keep your team focused when things get busy (and trust us, they will).

At Harness, we’ve worked with hundreds of nonprofits on crafting clear messaging. It’s one of the most powerful tools you can have—and it makes every other step easier.

Build a founding board of directors

Every nonprofit needs a board—it’s not just a box to check. This group helps guide your mission, makes big decisions, and keeps your organization accountable. And when you’re just getting started, the right board can be a real game changer.

But choosing board members isn’t just about asking your friends. You want people who believe in your mission, bring different skills to the table, and are willing to roll up their sleeves. Think about folks with experience in areas like finance, law, community work, fundraising, or leadership.

At the start, you’ll need at least three people (though the exact number depends on your state). These are the basic roles:

• President or Chair – runs board meetings and helps set direction
• Secretary – keeps official records and meeting notes
• Treasurer – handles finances and budgeting

Make sure everyone understands what they’re signing up for. Being on a board isn’t just about attending meetings—it’s about helping the organization grow in smart, steady ways. We’ve seen some of our most successful partners at Harness start small but mighty with a hands-on board that believed in the mission just as much as they did.

Tip: Keep communication simple. Set regular meeting times, stay transparent, and give your board tools to stay involved (we’re big on tools over email chains!).

Incorporate your nonprofit at the state level

Now it’s time to make things official. Incorporating your nonprofit means you’re forming a legal entity with your state. It’s like giving your organization a name and a place in the system. Without it, you can’t open a bank account, apply for tax exemption, or protect your board members legally.

The good news? Most states make this process pretty straightforward.

Here’s what you’ll usually need:

• Choose your nonprofit’s legal name. Make sure it’s unique in your state and reflects your mission.
• File your articles of incorporation. This form tells the state your basic info—like your nonprofit’s name, mission, and who’s on your board.
• Appoint a registered agent. This is the person who receives legal documents for your nonprofit. It can be you, a board member, or a hired service.
• Submit a statement of information (if your state requires it). It’s just an extra form that updates your state with details about your leadership.

You’ll file all of this through your secretary of state’s office. Some states let you do it online. Others need paper forms. There’s usually a small filing fee.

At Harness, we’ve worked with nonprofits in nearly every state, and one thing’s for sure—this step sets the tone. Taking the time to get your paperwork right here saves you headaches down the road. Plus, once you're incorporated, people tend to take you more seriously. It gives your mission a real backbone.

Obtain your federal employer identification number (EIN)

Once you’ve filed your state paperwork, your next move is getting an EIN—that stands for Employer Identification Number. Even if you don’t plan on hiring anyone right away, you still need it. Think of it like a Social Security number, but for your nonprofit.

The IRS uses your EIN to keep track of your organization for tax purposes. You’ll also need it to:

• Open a bank account
• Apply for federal tax exemption
• Handle donations and grant paperwork
• Hire staff (if and when you get to that point)

Getting your EIN is actually one of the easiest steps in the whole process. You just go to the IRS website, fill out a quick form, and boom—you’ll have your number in a few minutes. And it’s free.

A lot of the nonprofits we support at Harness are surprised at how fast this step is. But we always remind them: just because it’s simple doesn’t mean it’s optional. Without your EIN, everything else grinds to a halt.

Quick tip: Make sure the name you use to apply matches exactly what you submitted when incorporating with your state. Even a small mismatch can slow things down.

File for federal tax exemption

This is the big one. If you want your nonprofit to be recognized as a 501(c)(3) organization, you need to apply for federal tax-exempt status with the IRS. That means donors can write off their contributions—and you don’t have to pay federal income tax. It’s a win-win, but the process can feel a little tricky.

There are two main forms you can use:

• Form 1023 – This is the full application, used for larger nonprofits or more complex cases.
• Form 1023-EZ – A shorter, online version for smaller nonprofits that meet certain criteria (like expected revenue under $50,000 a year).

You’ll also need:

• Your EIN (from Step 5)
• Your articles of incorporation (from Step 4)
• Your mission statement and programs
• A detailed budget or financial plan
• Info about your board of directors and any possible conflicts of interest

This is where it helps to take your time and be thorough. We’ve helped lots of nonprofits at Harness through this process, and what we’ve learned is: The more clearly you explain your purpose and structure, the smoother it goes.

Expect to wait a bit—the IRS can take a few months to review your application, especially the full 1023. But once you get that approval letter, it’s a huge milestone. You're officially a tax-exempt nonprofit under section 501(c)(3). That opens the door to grants, donations, and way more visibility.

Pro tip: If you're not sure which form to file, the IRS has a quick eligibility checklist for the EZ version. Use it—it can save you hours.

Register for state-level tax exemptions and permits

Getting your federal 501(c)(3) status is a big deal—but you’re not done yet. Most states have their own rules when it comes to taxes and nonprofit registration. So now it’s time to handle your state-level tax exemptions and any required permits.

Depending on where you are, you might need to apply for:

• State income tax exemption
• Sales tax exemption (especially if you’ll be buying supplies)
• Property tax exemption (if you own or lease space)
• Charitable registration (if you plan to fundraise or accept donations publicly)

You’ll usually handle this through your state’s department of revenue or attorney general’s office. Some states make this super easy. Others have a few extra steps, like background checks or public notice requirements.

And if you plan to fundraise in more than one state, you might need to register in those states too. (Yep, more paperwork—but we promise it’s worth staying compliant.)

We’ve seen nonprofits at Harness trip up here—not because it’s hard, but because it’s easy to forget. Every state is different, and skipping this step can delay grants or get you flagged down the road.

If you’re not sure where to start, many state websites offer nonprofit guides. Or honestly, just give their office a call. They’re usually happy to help point you in the right direction.

Build operational infrastructure and fundraising systems

Okay—you’re official. You’ve got your tax status, your state paperwork, and a mission you believe in. Now it’s time to set your nonprofit up to actually run. This is the part where things can get real messy, real fast—unless you have the right systems in place.

Here’s what we recommend every new nonprofit gets in order:

• Open a nonprofit bank account. Use your EIN and incorporation docs to do this. Keep your finances separate from personal accounts from day one.
• Set up basic tools. You’ll want an easy way to track donations, manage contacts, send emails, and report on impact. (Hint: This is where Harness comes in. We’ve got one platform that does it all—without overwhelming your team.)
• Create your internal policies. These don’t have to be fancy, but you should decide how you’ll handle things like donations, reimbursements, and data privacy. It helps avoid confusion later.
• Build your digital presence. Yes, even if you’re starting small. A clean, simple website with a donation button builds trust. Add a mission statement, some impact stories, and a way for people to get involved.
• Design your fundraising strategy. Think about where your first dollars will come from—friends and family, small events, local businesses? Start there. Keep it manageable. Focus on building relationships.

A lot of folks think fundraising starts after launch. But the truth is, the earlier you start building your systems, the smoother things run later. We've helped teams get unstuck from spreadsheet chaos more times than we can count—so trust us, getting it right now will save you time, stress, and money.

Launch your organization and start fundraising

You’ve built the foundation. Now it’s time to share your work with the world—and bring in those first donations.

A launch doesn’t have to be a big, flashy event. It can be as simple as a well-written email, a heartfelt social media post, or a small gathering of your community. The goal is to tell your story, explain why your mission matters, and invite people to get involved.

Here’s what we recommend as you get started:

• Start with your inner circle. Friends, family, coworkers—these folks already trust you. Ask them to support your launch and share it with others.
• Tell your story clearly. What inspired you to start this nonprofit? What’s the problem you’re solving? What impact will a donation make?
• Make it easy to give. Use a donation form that works on mobile. Add a recurring donation option. Include a clear “donate” button on every page of your website.
• Track your results. Even if you’re just using a spreadsheet at first, keep track of who donates, how much, and how they found you. This helps you grow smarter over time.

And don’t worry if it feels small at first. Most of the nonprofits we work with at Harness start with just a few donors—and build from there. What matters most is consistency and connection. Your early supporters aren’t just donors—they’re your first community.

Pro tip: Follow up with everyone who gives. A thank-you message goes a long way. Better yet, show them the difference their gift made.

Your next move

Starting a nonprofit takes guts. You’ve mapped out a mission, taken legal steps, and started building support. That’s no small thing. But once the paperwork is filed and the website’s live, the real work begins—growing something that lasts.

You don’t have to figure it all out alone. Whether you’re just starting or already up and running, the right support makes a huge difference. That’s where we come in.

Harness isn’t just a fundraising platform. We’re a full-service partner that helps nonprofits stay organized, engage their communities, and raise money in ways that actually work. From day one through every stage of growth, we’re here to help you move forward with clarity, confidence, and real support.

If you’re ready to build something that lasts, we’d love to help you do it right.

Frequently asked questions

What is the difference between a 501(c)(3) and other nonprofits?

A 501(c)(3) is a type of nonprofit that’s officially recognized by the IRS as tax-exempt. It also means donors can write off their gifts. Not all nonprofits are 501(c)(3)s—some serve different purposes, like advocacy or membership groups, and fall under other categories.

Can I start a nonprofit alone or do I need a board?

You can start the idea on your own, but legally, you’ll need a board of directors to file your paperwork and get tax-exempt status. Most states require at least three people.

How much does it cost to start a nonprofit?

Costs can vary by state, but expect to spend between $300 and $1,000 for filing fees, tax forms, and startup tools. If you hire help (like an attorney or accountant), that number can go up.

How long does it take to get 501(c)(3) approval?

It depends. If you qualify for the short Form 1023-EZ, you might get approved in a few weeks. The full Form 1023 can take 3–6 months, sometimes longer.

Can I get funding before receiving tax-exempt status?

Yes, but donors can’t claim their gifts as tax-deductible until your 501(c)(3) is approved. Some funders may also wait until you’re official to give.

Do I need to register in every state I fundraise in?

Usually, yes. If you’re asking for donations in multiple states, each one may require registration. Rules vary, so check with each state’s charity office.

What if my mission changes over time?

That’s normal. Just keep your board in the loop, update your official documents (like your mission statement and bylaws), and make sure any changes still fit within your tax-exempt purpose.