Critical Steps in Forming a Nonprofit Organization in Pennsylvania
- Prepare a mission statement
Draft a brief mission statement that describes your organization's charitable purpose.
- Form a Board of Directors
Recruit individuals who believe in your mission and who have abilities in areas such as finance, business management, fundraising, human resource management and other areas.
- Develop a strategic plan
Develop a plan that addresses the program, operational and financial priorities of your organization.
- File for incorporation with Pennsylvania
Register for incorporation including submitting board-approved articles of incorporation and bylaws. Find a qualified attorney to assist with the filing.
- Apply for federal tax-exempt status with the IRS
This act allows your organization to be exempt from paying federal income taxes. Find an accountant experienced with nonprofit organizations to assist in preparing or reviewing the application before filing.
- Register for a solicitation license with the Pennsylvania Department of State
Your organization must be registered if you plan to solicit donations. Registration involves obtaining a license and filing an annual report and financial statement.
- Register for state and local tax exemptions
Once your organization receives its IRS exempt status, it may be eligible for exemptions from sales and property taxes. Registration involves filing an application with Pennsylvania to establish whether your organization qualifies as a purely public charity.
- Obtain federal, state and local tax identification numbers and registrations
File applications for federal employer identification number, state withholding, unemployment insurance and sales tax accounts, and local registrations (including withholding taxes).
- Establish a record-keeping system
Maintaining a system for keeping accurate records is critical to the success of your organization. Establish an accounting system, keep board meeting minutes, establish a financial reporting system, and maintain a record filing system.
- Obtain insurances
Make sure that your organization is covered with director and officers' liability, property, liability, workers compensation, and health and life insurance for employees.
- Surround yourself with experts
Throughout the process of establishing your organization and during its operation, hire proven experts to provide critical guidance. Experienced attorneys, accountants, insurance agents and consultants can guide your organization in business areas in which you are inexperienced.