To start a 501(c)3 nonprofit in North Carolina, you’ll need to determine key information about your organization and file paperwork with state and federal agencies. In this article, we’ll discuss the costs of starting a nonprofit in North Carolina, where to file, and how to apply for federal and state tax exemptions and licenses.
Did you know there are over 120,000 nonprofits incorporated in the state of North Carolina? To start a 501(c)(3) nonprofit in North Carolina, you’ll need to determine key information about your organization; also, file some paperwork with state and federal agencies.
Starting a nonprofit in any state is a process that requires commitment, perseverance, and of course, some paperwork. While it may take time, securing your nonprofit status can create a sense of trust and legitimacy with your stakeholders. Plus, you’ll enjoy the benefits of your organization’s tax-exempt status while making a difference in the world.
This post will guide you through each step of how to start a nonprofit organization in NC.
An effective nonprofit name is one that’s unique, memorable, and descriptive. North Carolina requires your name to be distinguishable from other nonprofits and businesses. They suggest calling the NC Department of the Secretary of State to determine if your proposed name is available.
The Secretary of State can also advise whether your name contains restricted words. Some examples include bank, trust, mutual, co-op, and wholesale. These terms require special permission from legal authorities.
Here are a few questions to consider as you come up with name ideas for your North Carolina 501c3:
If you need inspiration, explore the NC Center for Nonprofits’ list of nonprofits in the state. This is also a great way to see if your name idea conflicts with an existing North Carolina nonprofit.
The incorporator(s) and director(s) are the people who are responsible for the management and oversight of your nonprofit.
An incorporator is a person who signs your nonprofit’s Articles of Incorporation. Your board of directors will establish your organization’s bylaws (step 6) as well as vote on key issues and decisions for your organization. Nonprofit best practices include building a well-rounded, diverse board of directors that reflects the community your organization serves.
Learn more about incorporators and directors in the Secretary of State’s list of requirements for how to start a nonprofit in North Carolina. This PDF will also walk you through some of the other state-specific steps of starting a North Carolina nonprofit.
As part of starting a nonprofit in North Carolina, you’ll be required to designate a registered agent. A registered agent is an entity that is responsible for receiving (and forwarding as needed) official legal notices sent to your nonprofit organization.
You can serve as your organization’s registered agent or you can assign or hire someone. The registered agent’s mailing address must be on file with your organization’s paperwork, which goes into the public record.
In North Carolina, there are a few requirements your registered agent must meet. A registered agent must be one of the following:
To view the full registered agent requirements, explore the Secretary of State’s requirements for how to start a nonprofit in North Carolina.
Your Articles of Incorporation is the first legal document you’ll file to create your nonprofit. It will submit your name to the North Carolina Secretary of State’s office. You’ll need to pay a $60 fee.
Your Articles of Incorporation must include:
Want more details about how to file nonprofit Articles of Incorporation in North Carolina? Explore the state’s webpage dedicated to this topic.
An EIN is a 9-digit number assigned to nonprofits and other entities through the IRS. An EIN allows your nonprofit to complete critical administrative tasks. For example, you’ll need an EIN to open a bank account, apply for 501(c)(3) status, and to submit your annual Form 990 to the IRS.
To apply, you’ll need to fill out and submit IRS Form SS-4 and an application for Employer Identification Number (EIN). You can fill out your Form SS-4 online for free. Then, you’ll receive an EIN online and be able to use it immediately.
You can also submit your EIN application by fax or mail, though the IRS notes that these methods are generally processed more slowly.
Read the IRS’s detailed instructions for how to fill out your Form SS-4 to get an EIN for your nonprofit.
Your bylaws are a set of rules that govern how your nonprofit is organized and will function. While North Carolina and the IRS provide guidelines about how a nonprofit should be run, some things are up to you, your board of directors, and your bylaws. Your bylaws should not conflict with your Articles of Incorporation.
Tips for Creating Nonprofit Bylaws:
Become an expert on nonprofit bylaws – it’s easier than you might think! Read Donorbox’s blogpost on creating your bylaws, filled with tips and best practices.
You might be surprised to learn that not all nonprofits are tax-exempt. To start your 501(c)(3) exempt nonprofits, you’ll need to apply for both federal and state tax exemptions. Here’s how.
To apply for 501(c)(3) tax-exempt status, you’ll need to fill out and submit a Form 1023-series application. This application must be submitted electronically on www.pay.gov. There is a $275 fee due with this form. The state advises that you apply for federal tax exemption before applying with the state of North Carolina.
Learn all the details with the IRS webpage on how to apply for 501c3 tax-exempt status. There’s also a 14-page PDF guide that walks you through the process.
When you file your Articles of Incorporation, the Secretary of State will automatically notify the North Carolina Department of Revenue. Then, the DOR will send your registered agent a notification letter with a questionnaire. You’ll complete this questionnaire and submit it to the DOR along with a copy of your Articles of Incorporation.
Get the full scoop on applying for state tax-exempt status with North Carolina DOR’s publication on state taxation and nonprofit organizations.
The state of North Carolina doesn’t require nonprofits to acquire a general state business license. However, some types of business activities – such as selling beer and wine at a fundraising event, or “gambling” activities such as a raffle or bingo game – do require a license or permit.
Review the North Carolina Secretary of State’s guide to business licensing. The U.S. Small Business Administration also provides a helpful guide outlining some federal and state licenses and permits.
Nonprofits must register for a charitable solicitation license. There are some exceptions for organizations like schools, churches, YMCA’s, and charities that bring in less than $25,000 each year and do not compensate anyone.
You can apply for a charitable solicitation license through the North Carolina Department of the Secretary of State. Securing your license will give your North Carolina 501c3 the ability to legally solicit donations for your cause.
Learn more about charitable solicitation licensing and get all the details from the North Carolina Secretary of State’s website on this topic.
Having a bank account for your North Carolina nonprofit is essential when it comes to allowing you to collect donations, build savings, pay vendors, and more.
To open a bank account for your North Carolina 501c3, you’ll typically need to provide the following items:
Once you’ve learned how to start a nonprofit organization in NC, you’ll need to complete ongoing compliance requirements to keep your tax-exempt status. Each year, you’ll submit a corporate report, fill out an IRS Form 990, and renew your charitable solicitation registration.
The State of North Carolina requires each business corporation, limited liability company, and limited liability partnership to file an annual report with the Secretary of State. You can file electronically or by mail. Due dates and filing fees vary depending on your type of organization. Click here to learn more.
To ensure ongoing compliance, you’ll be required to fill out an IRS Form 990 each year. There are several types of 990 forms. The one you must fill out depends on your organization’s gross receipts.
Once you’ve registered for charitable fundraising (step 9), you’ll need to renew your license on an annual basis. Learn more about the online filing and renewal process by clicking here.
Starting a nonprofit in North Carolina will require some planning, patience, and hard work. But, once you complete the process, you’ll know that your efforts will help improve the world for years to come. We wish you well as you complete each step!
For more tips and useful resources, check out our nonprofit blog.
In this section, we’ll answer some common questions about starting a nonprofit in North Carolina to help you get started.
The fees to start a nonprofit in North Carolina include a $60 fee with your Articles of Incorporation and a $275 fee for 501c3s when filing for tax-exempt status with the IRS.
You may also choose to incur additional costs along the way. For example, you can pay an attorney to guide you through the paperwork and/or serve as your registered agent. You might also apply for additional licenses and permits that require fees. Plus, filing your Corporate Annual Report with the Secretary of State will incur additional fees. It varies from $20 to $200, depending on your type of organization.
The short answer is – it depends! State and federal agencies cannot always provide an up-to-date timeline about when your paperwork will be processed, since the volume of incoming applications can ebb and flow. Expect that the process is likely to take several months when done thoughtfully.
Generally speaking, the best way to ensure as quick a turnaround as possible is to submit paperwork electronically whenever possible.
Not necessarily. The North Carolina Secretary of State advises that you check with Business Link North Carolina to see if your nonprofit needs a license to operate. This is a division of the state’s Department of Commerce. Its mission is to help news organizations navigate whether or not a business license is needed. As noted above, some business activities – such as selling alcohol or hosting a raffle/bingo – do require a license or permit.
Heather is a writer, business owner, and nonprofit professional. She is a Certified Fund Raising Executive (CFRE) with more than a decade of experience leading fundraising efforts and creating communication materials for arts, education, and social services nonprofits.
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Heather Karellas
