If you’re a Florida resident and desire the greater good, you’re probably thinking about starting an organization to put your vision to work.
Starting a nonprofit organization is the best way to help your community; however, simply thinking about starting a nonprofit in Florida may seem overwhelming.
We’re here to break it down for you and help turn your dream of a nonprofit in Florida into reality.
1. Select a name for your organization
Once you’ve identified the unfulfilled need in your community, it’s time to start thinking of a name for your nonprofit organization. This deserves careful consideration as the name of your organization is ultimately its brand.
Additionally, the name needs to meet Florida state requirements and should not be used by any other organization in the state. Check the availability of your nonprofit corporation name in the state by heading over to Florida’s name database.
Furthermore, the name of your nonprofit should contain the word “incorporated” or “corporation” or, at the very least, abbreviations like “Corp.”
Moreover, suppose you plan on creating a website for the organization either now or sometime in the future. In that case, you may want to check the availability of the name as a web domain, and if it’s available, we suggest you buy it to prevent others from using it.
2. Nominate a Florida registered agent
Your registered agent is the designated individual in charge of receiving legal notices and documents from the state. A registered agent is simply a person who is appointed to accept official mail or accept service of process on your nonprofit’s behalf.
Anyone may be nominated as a registered agent so long as they are physically located in Florida and have an office or remain available during regular working hours. The selected individual may be someone within the organization, including yourself.
3. Recruit your board members
When choosing directors and officers for your nonprofit, you need to know Internal Revenue Service and residency requirements.
Directors are the governing body, cabinet, or management of your nonprofit, and the officer is responsible for keeping the minutes of the organizational meetings held between directors and members.
Directors in Florida need to be 18 years or older, and no residency or membership is required. The Board o
4. Consent to bylaws and conflict of interest policy
To complete your Florida nonprofit organization application, you’ll need to apply for Recognition of Exemption under section 501(c)(3) of the Internal Revenue Code and have two documents for a successful outcome:
- The first is a Bylaws document which acts as your organization’s operating manual, outlining operating procedures and so on.
- The second is a Conflict of Interest Policy, a collection of rules put in place to ensure that all decisions ultimately benefit the nonprofit’s purpose and not the nonprofit members’ personal agenda.
These policies must be implemented when the board meets, and directors and officers are nominated for the first time.
5. Prepare and file nonprofit Articles of Incorporation
Your organization’s articles of incorporation properly mark the creation of your nonprofit. Consequently, it documents when and where the nonprofit was formed and captures the necessary information to verify the existence of your organization.
That said, the IRS will look for a few introductory provisions when vetting your 501(c)(3) tax exemption application, so you must meet both the state of Florida’s requirements and IRS requirements to avoid unnecessary amendments or your application declined.
Here’s what your nonprofit articles of incorporation should state explicitly:
- Purpose: Your nonprofit must be limited to one or more of the following categories: Religious, Charitable, Scientific, Literary, Educational, Testing for pubic safety, Preventing cruelty to children or animals.
- Dissolution: Here you’ll need to state the purpose of the organizations’ assets and the consequences of dissolved assets.
Additionally, to get your 501(c)(3) tax exemption in order, you should use your nonprofit’s assets solely for the purposes sanctioned under section 501(c)(3).
The provisions required for 501(c)(3) eligibility can be found in this sample IRS document.
While some states require you to publish your articles of incorporation, the Florida department of state does not require you to do so.
However, you may file your documents online or do so via mail. Online is the quicker option, and the turnaround is usually between 1-3 days while forwarding your documents via mail will have you waiting anywhere between 8-17 days for the outcome.
6. Secure an EIN (Employer Identification Number)
An Employer Identification Number is also referred to as a Federal Tax Identification Number or Federal Employer Identification Number. It is a nine-digit number assigned by the IRS to identify your nonprofit or business entity. You can think of it as a social security number for your nonprofit.
While many people believe that only nonprofits who plan to hire employees need an EIN, all nonprofit organizations will need to apply for it. An EIN can be used to open a business bank account, submit 990 returns to the IRS, and apply for your 501(c)(3) compliance.
The form needed for your EIN is the IRS Form SS-4, and you may send the completed form back via phone, fax, mail, or online.
The ETA when using the online or phone method is almost instantaneous, while the fax option will take four working days, and the mail option will have you waiting anywhere between 4-5 weeks.
Please head over to this Understanding Your EIN document to guide you further.
7. Register your 501(c)(3) nonprofit
While the process of applying for 501(c)(3) tax exemption may seem daunting, to say the least, the advantages that come along with obtaining tax exemption are numerous.
501(c)(3) compliance benefits:
- Having recognition, and credibility for your nonprofit
- Being exempt from IRS income, federal, sales, payroll, and property taxes (more information can be found on the Florida Department of Revenue website)
- Eligibility for grants on local, state, and federal levels. Lots of funders will only consider an application if you are registered as a 501(c)(3) entity and have your 501(c)(3) certificate to prove this.
- Allows you to give tax deductions to donors when they donate to your nonprofit
- A nonprofit or exempt organization in Florida may qualify for nonprofit mailing privileges, such as discounted postage rates.
- Media outlets are also inclined to give discounted and even free announcements and press releases for nonprofits. Simply show them your 501(c)(3) certificate or tell them that you are 501(c)(3) compliant, and they will gladly make a public service announcement on your behalf.
These are just some of the benefits of being 501(c)(3) certified, and it is in your organization’s best interest to find out how this compliance can help your nonprofit save money and grow from strength to strength.
Now that you are aware of the benefits of obtaining a federal tax exemption, you’ll need to know how to qualify for it.
Here are the pre-requisites for federal tax exemption eligibility:
- The nomination of 3 directors, unrelated to each other
- Adopt bylaws and conflict of interest policy
- File articles of incorporation
- Have an EIN
Once you’ve fulfilled the requirements mentioned above, you may go ahead and file the 1023 form and apply for your nonprofit’s 501(c)(3) tax-exempt status. However, if you plan on running a smaller organization or expect your nonprofit’s gross income to be under $50,000 over the next three years, you can fill out the form 1023-EZ instead.
A determination letter will be sent to you stating the outcome of the application for exemption from federal taxes.
8. Apply for Florida state tax exemption
When filing for tax-exempt status, the laws vary from state to state. As per Florida law, nonprofit corporations or Division of Corporations are automatically exempt from Florida’s corporate income tax. The only exception here is if your organization has “unrelated business or trade income.”
As a resident of the state, your Florida nonprofit corporation automatically meets the requirements for sales tax exemption.
Additionally, your nonprofit may acquire a Consumer’s Certificate of Exemption(valid for five years) to gain sales tax exemption on services and items used in the organization’s not-for-profit activities. In this case, you’ll need to complete the application form dr-5.
9. Other applicable permits and licenses
Legally operating your nonprofit organization means securing all applicable licenses and permits. Admittedly, the federal, state, and local requirements are extensive, so we suggest you access valuable guides and permit and license look-up tools to search for your locality and business type.
In most cases, residents of Florida are required to produce a business license or occupational license. This is a local business tax receipt furnished annually by the county government. While not all counties in Florida will require you to do so, some of them insist that you file or lodge your new business with them.
You can learn more about these requirements by checking with your local tax collector’s office.
10. Additional state registration and reporting requirements
You may or may not need to register with the FDACS or Florida Department of Agriculture and Consumer Services before carrying out any fundraising. This depends on the size of your nonprofit as well as your activities.
Feel free to contact the FDACS for additional guidance or check out the Nonprofit Fundraising Registration Digital Guide.
11. Submit an annual report
The very mention of annual reports may seem premature initially; however, the state of Florida requires nonprofits to submit a yearly report at the end of each financial or calendar year to the Florida Secretary of State.
Additionally, it’s a great way to show donors how your nonprofit has reached its goals.
Start your nonprofit’s first year by identifying its target market, your team, and your fundraising goals so you can make the most of donor outreach, community partnerships, and volunteer recruitment.
Costs of starting a new nonprofit in Florida
The costs of starting a nonprofit will vary from state to state. Below we’ve listed the costs of starting a 501(c)(3) in the state of Florida:
- Application for recognition of exemption or 501(c)(3): $275 or $600 IRS fee
- Incorporation: $70
- Florida Charitable organizations registration: $10-$400 ($0 if exempt)
- Florida sales tax license: $5, if applicable
- Annual report filing fee: $61.25
Next steps
After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:
Open a business bank account
- Maintain accounting and tax filing
- Ensure that your personal assets are kept separate from your nonprofits’ assets
To open a bank account, you will need to provide your EIN, a copy of your articles of incorporation, and your organization’s bylaws.
Hire a business accountant
- Simplify payroll and bookkeeping
- Prevent your nonprofit from avoiding penalties and tax errors
- Manage your nonprofit’s funding
Obtain insurance
- Focus on growing your nonprofit
- Manage risks
You may opt for General liability, Personal liability, or Worker’s compensation insurance.
Build a website
As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals.
Sign legal documents
One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of an authorized representative of your nonprofit.
To avoid becoming a victim of personal liability, keep these points in mind when signing any documents on behalf of your nonprofit:
- State the registered name of your nonprofit
- Use your name and signature
- State your position/role in the organization as its authorized representative
To sum it up
Now that you’ve made it this far, it’s time to follow the steps above to register your nonprofit and benefit your cause. We know that paperwork and filing can be daunting, but you shouldn’t let that hold you back.
The good news is that Florida has streamlined the process, and everything you need is readily available. Once you have that solid foundation, you’ll need to maintain it by complying with all government agencies.
This ensures that you are up to date with Florida state and IRS requirements so your nonprofit can succeed well into the future.
FAQs
The short answer is no. However, a for-profit may set up a structure where it effectively controls a nonprofit. But in order to do this, all applicable laws, including those pertaining to private benefit, private inurement, and corporate self-dealing, must be adhered to.
The purpose of a nonprofit organization is not to earn any profits for its owners but rather to help fulfill a need in the community and improve the quality of life for disadvantaged community members. This can be done on a global, national, state, local, or community level.
Nonprofits typically operate under scientific, religious, or charitable classifications. These organizations invest excess revenue into their cause or mission, as opposed to paying shareholders. Some examples of nonprofits are the American Heart Association, American Red Cross, United Way, The Salvation Army, and Human Society of the United States.
Yes, one person can start a nonprofit organization. However, you’ll need board members to meet the requirements of the government registration process. That said, board members may be designated in name only and could meet once a year to fulfill their annual meeting obligation. Aside from that, a capable individual may start and run a nonprofit in their own capacity.
The costs of starting a nonprofit will vary from one state to another. You are likely to need anywhere between $500 at a bare minimum, but costs could go as high as $1,000 or more. Therefore, you are advised to set aside between three to six months of costs to ensure that you stay in business over the long run.
