How To Start a Non-Profit

Thinking of starting a nonprofit? This page should help you think through your nonprofit idea and
understand the process and options for becoming a nonprofit in North Carolina. 

The information provided herein does not constitute legal advice. Please 
consult a lawyer for individual advice on issues raised below. 

Thanks to Quianna Lewis, Munson Law Firm and Ryan Fairchild of Odin Law & Media for their many volunteer
hours of research, writing and editing required to create this resource

What to think about when thinking about starting a nonprofit. 

Before starting a new nonprofit organization, there are many aspects to consider. The first is whether your mission is unique and clear enough to become a sustainable nonprofit that others will want to support. Second, you need to decide if a nonprofit is the best form for the mission you want to accomplish. 

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Becoming a Nonprofit in North Carolina 

If you decide to form a nonprofit, here are the basic steps you need to know.

  • STEP ONE - Become a legal entity in North Carolina. 

    Becoming a nonprofit corporation in NC

  • STEP TWO - Becoming a IRS  501(c)(3) tax-exempt organization under Section 501(c)(3) of the Federal Tax Code

Other things to think about when operating a nonprofit in NC:

Employees - When you have at least four full or part-time employees working a total of 20 weeks in a calendar year, you will need to  file with the N.C. Employment Security Commission to pay unemployment taxes. Follow all state and federal laws related to employment, including I-9, W-2, and W-4 forms; withholding taxes; and posting all compliance posters.

Insurance - All nonprofits should carry insurance. Having Directors and Officers Insurance protects those directors and officers from liability and makes it easier to recruit them. Comprehensive General Liability and other policies protect your organization from the risk of liability for errors, omissions, injury, etc. And many contracts or grants require that you carry a certain level of insurance. Here is a helpful  discussion of various risks and policies. Consider speaking with an insurance broker.

Other licenses and permits - Depending on what work your organization is doing, there may be other licenses and permits required. Some are listed here or you can contact the Small Business Advisors at NCEDP for help on this issue. 

Ongoing Requirements  

  • File your taxes - Any nonprofit with annual gross receipts of $25,000 or more must file a Form 990. If an organization normally has gross receipts of $50,000 or less, it must submit Form 990-N (e-postcard). You must refile Form 990 annually within 4.5 months after your fiscal year ends.  

  • Collect sales tax on items sold. If your nonprofit sells retail items, register with the N.C. Department of Revenue for a Certificate of Registration, file the returns, and pay the tax due on a quarterly or monthly basis, depending on your volume of sales. For help, contact the Taxpayer Assistance Division.. 

  • Let the Secretary of State know if you change address/registered agent. When needed, update your principal office address and registered agent with the N.C. Secretary of State. Find a Change of Registered Office/Agent form on the SOS website here.