In an effort to help families navigate the process, we have partnered with Klamp & Associates in Washington, D.C. on a list of 10 steps to creating a nonprofit. Please note these guidelines are not legal advice and do not reflect the wide variety of state and federal laws and regulations that govern the creation and operation of a nonprofit. EVERMORE is a strong advocate of using knowledgeable, legal nonprofit experts to capture your vision and your child's legacy, but we hope these steps provide a roadmap of important considerations as you begin this journey. 

Step One. Determine your mission. Determining your mission is perhaps the most important decision you will encounter. You may need to give yourself time to consider several iterations before finalizing your focus. Answer questions like: what outcome do we want to see? Where would we like to be in five years? What is the most significant contribution we can make to capture our child’s legacy? The more specific you can be, the more focus you will have in achieving your vision.

After answering these questions, it will be easier to determine what type of nonprofit entity you may become. According to the IRS, there are 27 categories of tax-exempt organizations. Most often, charitable organizations are considered 501(c)3 entities.

Step Two. Choose a name. The name you choose a may relate to your mission and/or refer to your child’s name. Depending on where you intend to operate, you will need to register your name with the state. It is important to do the research necessary to ensure you will not infringe on existing trademarks that are already reserved by organizations. You can begin your search using the U.S. Patent and Trademark Office’s database.

Step Three. Select your founding board of directors. Selecting your founding board members is vital to long-term organizational success. First, consider the type of expertise you require to achieve your mission. Develop a matrix of potential members and necessary skill sets to avoid redundancy. Most nonprofits need operational and program expertise, including: financial and organizational management (audits, accounting, human resources), fundraising, communications, and legal affairs (governance, nonprofit law).

Step Four. File your Articles of Incorporation. Incorporating a nonprofit requires that you file Articles of Incorporation. Legal requirements vary by state, and it is important to make sure you comply with local laws. A simple google search can find templates of state requirements and offer sample Articles of Incorporation. If you need to make amendments to your Articles of Incorporation, it can be done at a later date.

Step Five. Draft bylaws. Drafting your bylaws is important because these outline how the organization will function, including how decisions will be made, how the board will be managed, and which board functions are assigned to which board positions. Similar to Articles of Incorporation, bylaw requirements vary by state and can be amended at a later date.

Step Six. Instituting a Conflict of Interest policy. Instituting a Conflict of Interest policy is not a requirement, but adopting one is considered good corporate governance. This provision ensures the organization will not make transactions that violate your mission or IRS regulations. A sample Conflict of Interest is provided by the IRS.

Step Seven. Convene your first board meeting. Convening your first board meeting enables you to formally elect officers, adopt governance procedures (bylaws and conflict of interest policy), and authorize officers to apply for federal and state tax-exempt status. In addition, the board can authorize establishment of bank accounts and hiring an executive director. During the meeting, you should follow the governance procedure outlined in your bylaws. Take minutes and record motions and other voting decisions.

Step Eight. Obtain an EIN. Obtaining an Employer Identification Number (EIN) enables the IRS to track your nonprofit’s paperwork. The IRS makes it easy to file for an EIN by using an online process.

Step Nine. Apply to become a federal nonprofit. Applying to become a federally recognized nonprofit is one of the most important steps you will take to capture your child’s legacy. Filing a 1023 IRS form is required to acquire charitable statusSmaller nonprofits may qualify to fill out the 1023 EZ form. If these forms are filed within 27 months of incorporation and nonprofit status is granted, all donations will be considered tax-exempt retroactively. The IRS will send you a Letter of Determination when you are granted tax-exempt status. It is very important to keep this document in a safe place as it will be required for future charitable activities.

Step Ten. Apply to become a state or local nonprofit. Applying for state or local nonprofit exemption is important because federal tax-exemption does not confer to local or state tax exemption. Presenting local and state officers with the Letter of Determinationis often required.

While the loss of a child changes life irrevocably for families, carrying their legacy forward doesn’t need to be an additional struggle. We hope this guide will ease the process and enable you to honor your child’s life and make a positive contribution to your community - and the world.

For an in-depth guide to starting a nonprofit, please see Klamp & Associates Guide to Creating a Nonprofit.