How To Start a Nonprofit in Georgia: From A to Z
Starting a nonprofit involves more than simply filing a 501c3 application, and the process is not the same in every state. If you are not vigilant, you may end up without necessary business licenses or tax exemptions to operate legally out of your home office. If you are even thinking about starting a nonprofit in Georgia, read through this comprehensive guide. We break down the tasks involved into a simple eight-step process for you to follow.
- Before Starting a 501c3 in Georgia
- How To Start a Nonprofit in Georgia
- How To Maintain a Nonprofit in Georgia
- Final Thoughts
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Before Starting a 501c3 in Georgia
Before even taking that first step toward launching your nonprofit, it is important to understand that the process of incorporation in Georgia will differ in some ways from the procedure in other states. Here are a couple of factors on nonprofit creation in Georgia to think about:
Georgia requires at least one director and one incorporator for your nonprofit.
Georgia restricts the type of nonprofit that can receive state sales tax exemption.
We will expound upon the above elements throughout this guide. There are also a few universal tips to follow before starting your nonprofit to ensure you are setting yourself up for success.
Define Your Goals and Programs
A clear vision and strategy will help direct focus, guiding your nonprofit organization forward. Say that your mission is to "help with homelessness." Great! What kind of help do you plan to give? How are you going to get the funds to help? Create clarity so that you and your board know exactly what you need to do when you are up and running.
Get First-Hand Experience
This is a best practice, especially if you have little to no experience with nonprofits. Good intentions are important, but you need to back those intentions with practical knowledge. Find a nonprofit similar to what you envision for yours, and offer your services. That way, you will get first-hand information on how to run an organization.
Sam is doing his research before moving forward with his nonprofit!
Do Your Research
If you do not know what to expect, it is far easier to take a misstep that could cost time and money. This article is a good place to start for foundational knowledge on state and federal guidelines, but here are a few sites to visit to get into the more nitty-gritty regulations:
Finally, if you want to find out more information about starting a nonprofit in another state, here are some helpful links you can visit:
Pro Tip: Have you wondered if your nonprofit can operate in multiple states? The answer is: yes, most certainly! However, each nonprofit usually has a home base in one state, which is where you file for 501c3 status. You can expand into other states with the help of a document known as a Certificate of Authority.
How To Start a Nonprofit in Georgia
Once armed with the research and plan needed to streamline the process, it is time to get started. Here are eight steps to follow to get your nonprofit off the ground in the state of Georgia.
Step #1: Name Your Nonprofit
Finding the perfect name for your organization is an important first step in launching your nonprofit. You are essentially creating a brand. Your name is what informs the public and engages potential donors.
However, keep in mind that it must be distinguishable from any other corporation name already on file with the Georgia’s Secretary of State (SoS) Corporation Division. You can search existing names by visiting the Corporation Name Database on the SoS website. If your name is free, you may reserve it for 30 days for a $10 fee.
One final requirement in Georgia: your organization name must have the word "company," "corporation," "incorporation," "limited," or their abbreviations in its title.
Step #2: Recruit Your Directors
Your Georgia nonprofit must have one director and one incorporator to operate, though you may have more than one. For directors, it is always a good idea to recruit people with a broad array of professional talents as well as executive management skills, if possible. The directors are the individuals that lead your governing body and drive large-scale policy and strategy for your organization.
The incorporators are the individuals or corporations that sign your articles of incorporation. They must be over 18 and reside in your base state of operations.
Step #3: Choose a Registered Legal Agent
The next step is finding an agent for service of process for your nonprofit. This is an individual or corporation that is located in your state and available during business hours to accept important legal documents on your organization’s behalf. Oftentimes an officer or director will initially fill this role. However, in the state of Georgia, your corporation may act as its own registered agent.
Step #4: File Your Articles of Incorporation and Intent to Incorporate
Now it is time to legally create your corporation. You can do so by filing your organization’s articles of incorporation through the Georgia Secretary of State’s Corporation Division. Unlike many other states, Georgia does not offer a fillable articles of incorporation form that your nonprofit can use. Rather, you will have to draft your own form, using the guide created by the Corporation Division. You should include the following information in your articles:
Name of your corporation
Names and street addresses of all of your incorporators
Name and street address of your registered agent
Statement that your corporation "is organized pursuant to the Georgia Nonprofit Corporation Code"
Mailing address of your nonprofit’s office
Statement on whether or not you plan to have members
For purposes of the IRS, you will also have to add three clauses to the articles. These include:
Dissolution clause that dedicates the assets of your nonprofit to either the government or another 501c3 upon dissolution
Statement that your organization will not perform activities unrelated to its exempt purpose nor become involved in any prohibited legislative or political activity
You may file your articles digitally through the Georgia Secretary of State’s website or by postal mail to its office in Atlanta. The online filing fee is $100, while the postal filing fee is $110. If you are filing through the mail, you will need to include a Transmittal Information Form. Also be sure to draft your articles on 8.5-by-11-inch paper.
Mary is just about ready to obtain an EIN for her nonprofit!
Step #5: Obtain an Employer Identification Number
Every corporation is required to have an Employer Identification Number, or EIN. The EIN is an identifier that differentiates your corporation from all others — you will use it on a number of reporting documents. You obtain your EIN by applying for free on the IRS website.
Step #6: Establish Your Bylaws
Bylaws are essentially an operating manual for the procedures of your organization. In Georgia, you are not required to file these with the state, but they must conform to all corporate laws.
Bylaws include the following information:
Procedures for electing your officers and directors
Rules for running your board meetings
Protocols for managing all other corporate formalities
You should establish and approve your corporate bylaws at your initial board meeting. This meeting, often known as the organizational meeting, is where you will also appoint your officers, set up your accounting year, and approve your initial corporate transactions.
Take minutes at this meeting, and put them — along with all of your other important corporate documents — in a binder to keep on the premises. You should also have digital copies of all of these documents in a secure location.
Step #7: Apply for Tax Exemptions
Once your organization is incorporated, it is time to apply for tax exemption. Here is what you need to do to meet both federal and state requirements.
Federal Tax Exemptions
You may obtain federal tax exemption for your Georgia nonprofit by filing Form 1023 with the IRS. This is an involved and complicated form that, when completed, comes to about 50-100 pages of paperwork. It requires information about your nonprofit’s history, finances, governance, operations, and more. Form 1023 has a $600 filing fee.
Some small nonprofits may be eligible to file a shorter, simpler version of Form 1023 called the 1023-EZ. To qualify, your nonprofit must have no more than $250,000 in assets and anticipate less than $50,000 in annual gross receipts. Form 1023-EZ costs $250 to file. Even if the IRS dubs your new nonprofit eligible to use this form, keep in mind that it can be a controversial choice. Some nonprofit advocacy groups fear smaller nonprofits that file this form may find it difficult to qualify for some grants.
Pro Tip: The complexity of the Form 1023 cannot be stressed enough. It requires an average of 100 hours of labor to complete in its entirety. We recommend hiring a professional for this task — ideally a tax accountant or tax attorney with plenty of experience in the nonprofit sector. Not completing Form 1023 in full or not using the proper IRS language can cause major delays in receiving your tax-exempt status.
Georgia State Tax Exemptions
When you receive your determination letter from the IRS, your nonprofit automatically obtains state corporate tax exemption in Georgia. However, to get exemption from sales tax, you will need to apply to the Georgia Department of Revenue. Georgia does have restrictions on the types of charitable organizations that receive sales tax exemption, though. The following charitable and religious organizations are eligible:
In-patient hospitals, mental hospitals, and nursing homes
Adoption agencies and licensed nonprofit orphanages
Foundations raising funds for public libraries
Nonprofits providing services to those with mental disabilities
Step #8: Register for Charitable Fundraising and Other Licenses
Before you begin fundraising activities as a nonprofit corporation, you may need to register with the Securities Division of the Georgia Secretary of State. Whether this is required depends on the size of your organization as well as its type of activity. Reach out to the Georgia Secretary of State to determine whether you will need to take this step.
How To Maintain a Nonprofit in Georgia
Once you have become a 501c3 corporation, you have to do some work to keep that tax-exempt status. Your nonprofit is required to file an annual report with the state of Georgia that shares any changes that may have occurred in the previous year, such as an updated list of board members.
Anthony has started his nonprofit and is ready to maintain it – great work, Anthony!
The IRS requires the annual filing of Form 990, which is very much like what a tax return is to for-profit corporations. Form 990 is due within five months after your fiscal year ends. It is easiest for an accountant or another financial professional with nonprofit experience to file it for you. If you do not have someone in this role full-time, then consider contracting the job out.
If your nonprofit is not timely and compliant with reporting regulations, there will be penalties up to and including losing your corporation’s nonprofit status.
While it is easy to be intimidated by the work involved in launching a nonprofit, you can tackle it without too much hassle if you break down the process into a series of workable steps. Before getting started, find out just what your state requires. Guidelines for a Texas 501c3 are slightly different than those governing a Florida 501c3, a Michigan 501c3, an Ohio 501c3, or another state 501c3.
Do initial research into the process, and then move deliberately through each of the steps. Finally, get help from a professional. With careful forethought and a little assistance, you will be well on your way to seeing your nonprofit mission and vision become a reality!
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💡How do I start a nonprofit organization in Georgia?
First, you need to form a corporation under Georgia law. This requires several steps, including drafting articles of incorporation and obtaining an Employer Identification Number. Next, you will apply to the IRS for 501c3 status as a corporation using Form 1023. This process takes, on average, three to six months — or up to a year for complex organizations. Find out more.
🔑 How much does it cost to start a nonprofit in Georgia?
The filing costs are the same for most nonprofits with fees for your name, your articles of incorporation, and your Form 1023. This can cost you anywhere from $350 to $750. However, this does not factor in professional assistance, which we recommend, or operational costs, such as salaries. Find out more.
📝 Can you start a nonprofit alone?
In theory, yes. However, unless it is an extremely small nonprofit, you will want to build a board of directors to help guide the direction of your organization. Find out more.