Starting a nonprofit in California can feel like a big deal, and it is. But it doesn’t have to be confusing or overwhelming. We’ve helped hundreds of folks take that first step, and trust us, with the right guidance, you can totally do this.
This guide will walk you through the process, one clear step at a time, so you’ll know exactly what to do and when to do it. From naming your organization to getting tax-exempt status, we’ve got your back.
Name your nonprofit organization
Picking a name is your first real moment of saying, “Yep, this is happening.” It's more than just a label, it’s how people will know and remember you. Choose something clear, meaningful, and easy to say out loud. Think about what your nonprofit does, who it helps, or the values it stands for. Keep it short and simple if you can.
Before you fall in love with your name, double-check that it’s available. The California Secretary of State has an online tool where you can search to see if your name is already taken. You’ll also want to see if the domain name is open, especially if you’re planning to build a website. Trust us, it’s way easier to do this now than try to change everything later.
Decide on your nonprofit’s corporate structure
This is where you decide how your nonprofit is legally built. In California, most nonprofits go with a “public benefit corporation.” That’s just the official term for an organization set up to help the public, whether that’s feeding families, protecting animals, or supporting the arts. It’s also the structure you’ll need if you want to apply for 501(c)(3) status, which lets you skip federal income taxes and makes donations to your nonprofit tax-deductible.
There are other types of nonprofit structures too, like mutual benefit or religious corporations. But if your goal is to serve a cause and get tax-exempt status from the IRS, public benefit is probably your best bet.
Appoint your board of directors
Now it’s time to gather your team. California law says you need at least one director, but we always recommend choosing at least three people you trust, people who care about your mission and bring different strengths to the table. Your board helps make big decisions, keeps things on track, and shows funders and the government that you're serious and accountable.
Think of your board as your nonprofit’s anchor. These are the folks who will review your budget, approve your plans, and support your growth. Pick people who are excited to help and aren’t afraid to ask tough questions. It’s okay if they’re not fundraising pros, what matters most is that they believe in what you're building.
Draft and file your articles of incorporation
This is one of the biggest legal steps, and it’s not as scary as it sounds. Your articles of incorporation are just a document that tells the state, “Hey, we’re starting a nonprofit and here’s what we’re about.” You’ll file it with the California Secretary of State.
Make sure your articles include the right language for tax exemption. The IRS looks for specific wording about your purpose and what happens to your assets if the nonprofit ever closes. It’s easier to do this right from the start than to go back and fix it later.
Apply for your employer identification number (EIN)
Even if you don’t have employees yet, you still need an EIN. It’s like a Social Security number for your nonprofit. You’ll use it to open a bank account, apply for tax exemption, and file government forms. You can get it online from the IRS for free, and it only takes a few minutes.
Create nonprofit bylaws and conflict of interest policy
Your bylaws are the rulebook for how your nonprofit runs. They explain who does what, how decisions get made, and how meetings work. A conflict of interest policy helps you stay transparent by showing how you’ll handle situations where someone’s personal interests might clash with your mission.
These documents might sound boring, but they’re super important, and you’ll need them for your tax-exempt application too.
Hold your first board meeting
Once your board is in place and your documents are ready, it’s time for your first official meeting. This is where your board approves the bylaws, confirms roles, and officially starts the organization. Be sure to take notes (called “minutes”) and keep them in your records.
File your statement of information (Form SI-100)
Within 90 days of incorporating, you’ll need to file Form SI-100 with the Secretary of State. It’s a quick form that lists your directors, officers, and address. You’ll need to file it every two years after that, too.
Register with the California Registry of Charities and Fundraisers
Before you start asking for donations, you need to register with the Attorney General’s office by filing Form CT-1. This puts you on record as a legit charitable organization. You’ll also need to send a copy of your articles, bylaws, and federal tax exemption letter (once you get it).
Apply for federal tax exemption with the IRS
Here’s the big one: filing for 501(c)(3) status. You’ll need to fill out Form 1023 or the shorter 1023-EZ, depending on your situation. This step takes time and requires careful answers. The good news? Once approved, you’ll get a federal determination letter showing your nonprofit is officially tax-exempt.
Apply for California state tax exemption
After getting your IRS letter, you’ll apply for state-level exemption with the Franchise Tax Board using Form 3500 or 3500A. This makes sure you don’t have to pay state income tax either. If your IRS approval goes smoothly, the state part is usually pretty easy.
Set up financial infrastructure
Now that you're official, open a bank account in your nonprofit’s name. Choose a fiscal year (most use the calendar year, but you don’t have to). You’ll also want to set up bookkeeping tools and maybe a donor management system, something that makes it easy to track every dollar.
Understand ongoing compliance and reporting
Once you’re up and running, there’s still some paperwork to keep up with. Every year, you’ll file IRS Form 990 (or 990-EZ or 990-N, depending on your size). You’ll also need to renew your charitable registration and file state forms. Staying on top of this helps you keep your tax-exempt status.
Plan your fundraising and outreach
This is where things get fun, you get to share your mission and invite people to be part of it. Whether you’re hosting events, applying for grants, or building a monthly donor program, fundraising is about telling your story and making it easy for others to join you.
At Harness, we help nonprofits turn that story into real support with tools for giving, engagement, and growth. Fundraising doesn’t have to be stressful when you’ve got a system that works.
Let’s get started
Starting a nonprofit in California takes some work, but every step you take gets you closer to making a real difference. Whether you're here to support your community, protect the planet, or inspire change, getting your organization set up the right way sets the foundation for everything that comes next.
Remember, you don’t have to figure it all out on your own. At Harness, we help nonprofits like yours not just get off the ground, but grow into thriving, sustainable organizations. If you're ready to turn your idea into impact, we’re here to help you every step of the way.
