Incorporating your Nonprofit Organization

I previously listed the first seven steps in starting up a nonprofit organization.  Today we will cover the next two steps. 

8. Find an insurance agent that can help you develop an insurance policy that will protect you and your non-profit organization. You will probably need liability insurance, property insurance. If you plan on hiring employees you will also need workers' compensation insurance, health insurance and life insurance (Health and life insurance is optional).


9. Draft and File Your Legal Incorporation Document

• Identify the basic information about your non-profit organization. You will need to include the name of your non-profit, where the headquarters will be officially located and what the purpose of your non-profit will be.
• Draft your purpose clause. Your purpose clause will need to define what the goals your organization will have. Keep the goals general to give you flexibility in what services you provide now and what services you can provide later once you are more established.
• Determine if you want your organization to be a membership organization or not. This be based on how you want your non-profit organization to be run. If you make your non-profit a membership organization, then the members may have a say in how money is spent and how the organization is run.  
• Most Secretary of State web sites have templates and/or instructions for nonprofit articles of incorporation. You may also search online using keywords “nonprofit articles of incorporation”, plus your state.  
• Check with your state to see if by-laws are required in your articles of incorporation. If so, draft your by-laws for your organization. Bylaws are the ruling documents of an organization or, in this case, the organization’s board of directors. Bylaws are critical, because they tell the board how to conduct its business. However, because bylaws are more or less set in stone, it is in the interest of the board to keep them as brief as possible. If your state requires by-laws, you will need to include them with articles of incorporation. If your state does not require them, you will need to draft them as a separate document. A lawyer who specializes in incorporation can help you set up your non-profit the way that you plan to have it set up.

The legal incorporation documents are filed with the Secretary of State office in your state. The fee will be determined by the state in which you incorporate. Still more to come tomorrow.