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How to Start a Nonprofit Organization in Minnesota

Nonprofit organizations can provide invaluable services to their communities. But starting a nonprofit in Minnesota can involve a lengthy, expensive process that isn't practical for every association. Of course, there are alternatives to becoming a federally recognized nonprofit organization. For instance, you could start a program under an existing organization. If your organization won't generate more than $25,000 in revenues a year, you could keep it as an informal association. But incorporating offers limited tax liability, tax-exempt status, and owner accountability. If these advantages appeal to you, consider tackling the process to become an official nonprofit in Minnesota.

Reserve your organization's name. Every nonprofit in Minnesota must operate under a unique name, so confirm the availability of your organization's name with the Minnesota Secretary of the State's office. Once it has been determined that no other state organization is using that name, you may reserve it through the secretary of state's office by filling out a Request for Reservation of Name form and paying the $35 filing fee.

Choose board members. These people will be responsible for writing the articles of incorporation and bylaws of your nonprofit organization, so make sure to recruit people you think will shape your organization appropriately.

Write the articles of incorporation. These state your organization's name, the names and addresses of each incorporator, and the organization's location, intent, and management structure. Consult Minnesota's statutes governing nonprofit organizations for guidance in drafting the articles.

Determine your organization's mission. Solidify your nonprofit's goals by considering who or what you're trying to help, what you'd like to accomplish, and how you want to affect your community. Formulate a mission statement to help guide you through the planning stage. This statement should concisely define the nonprofit's primary goal.

Draft a business plan. Required by the IRS to receive tax-exempt status, a business plan will also set forth your organization's intended direction. When creating a business plan, think about your organization's goals, the programs your organization will manage, and the required personnel. Your business plan should also include a budget that outlines your organization's funding sources and expenses.

Incorporate as a nonprofit organization. File your completed articles of incorporation, along with the $70 filing fee, with the Business Services division of the Minnesota Secretary of State's office. In addition to providing your organization's governing body with limited tax liability and allowing your organization to apply for tax-exempt status with the IRS, incorporating can make your organization look more viable to potential employees, contractors, or financial backers. Once filed, your organization will receive a certificate of incorporation and a charter number used by the Minnesota Secretary of State's office.

Difficulty: Moderately Challenging

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