So you want to start a nonprofit in Missouri. Although you might draw some parallels between starting a for-profit business and a not-for-profit organization, nonprofits have special considerations involving management (board of directors), tax exemption, finances, proposal writing, forms to file and more.
Following these steps can help you form your nonprofit organization in Missouri. If you’d prefer chatting with a human who can create your free (yep, totally, 100 percent free) custom step-by-step guide that outlines your next steps, give us a call at 866-870-6500 or tell us what you need help with here.
Who will control your organization?
One of the basic differences between nonprofits and for-profits is who controls it.
Successfully creating a nonprofit is a lot harder than founding a successful for-profit because the organizers have to bring many people together. A nonprofit will generally need a governing body of volunteer directors who will have broad oversight of the paid staff and the power to hire and fire them.
Confirm the need for your organization
Similar to what you’d do with market research for a for-profit business, do some market research to see if your community or region needs this type of organization and/or if the market is saturated with similar organizations. Does someone already provide this service and is there need for another similar organization or an organization of this type? Do you fill a particular niche or meet a need in a way that others in your service area don’t?
Most organizations will at least want to be exempt from paying income tax on the money they take in. Charitable organizations will also want donations to be deductible on their donors’ tax returns. The general forms for articles of incorporation from the offices of Secretary of State don’t necessarily say what you need for the tax exemption you want. The secretaries also don’t provide by-laws or conflicts of interest policies.
The IRS has guidelines that outline the different types of tax exemptions.
> > > Not sure what you need to do? Feeling like you could use some help? We got you. Just give us a call at 866-870-6500 or reach out to us online about what you need, and we’ll outline your next steps and connect you with help in Missouri (for free) so you can do this thing.
File the certificate or articles of incorporation
Although you can legally establish an unincorporated organization, it’s hard to obtain tax-exempt status. And it’s tough to receive grants when your organization is unincorporated.
Usually, you file the articles of incorporation with the secretary of state or the attorney general’s office in your state. In Missouri, you’ll file with the Secretary of State, but other states might be different.
- Register your business in Missouri - Cost is $25 to file articles of incorporation
Establish your organization’s board of directors and the organization’s incorporators
Missouri requires any nonprofit organization to have at least three directors. A president, secretary and treasurer have to be on the board for incorporation.
The Midwest Center for Nonprofit Leadership has resource materials and classes to help organizations develop their boards.
Develop vision and mission statements
The vision statement outlines the organization’s reason for existence, while the mission statement identifies how the organization will accomplish the vision.
Missouri require certain statements in an organization’s bylaws. See the above links for guidance.
Get an employer identification number (EIN)
Organizations must apply for an EIN through the IRS to apply for tax-exempt status, to make required form 990 filings and to pay payroll taxes for employees. Learn more about EIN's from IRS.gov. But just because you have an EIN, doesn’t mean you organization is tax-exempt.
Open a bank account
You should also make sure your financial procedures, checks, and balances are in order and defined for your organization. If financial management isn’t your forte, find an expert who can help.
Apply for federal tax exemption
Section 26 USC 501 lists organizations that might qualify for tax-exempt status. Those organizations that meet the requirements in section 501(c)(3) may qualify for both exemption of income and deductibility of donations. See form 1023 and instructions at www.IRS.gov, as well as IRS Publication 557.
- View IRS requirements for exemption
- Fill out the IRS Exemption Application
Legal counsel is recommended for completing Form 1023. Be sure to look for someone with nonprofit expertise, and know that you can find low-cost or pro bono services through Legal Aid or a local law firm.
MOSourceLink can help connect you with local experts and low-cost or free help that can guide you with starting your nonprofit. Call us at 866-870-6500 or tell us what you need here, and we’ll outline your next steps.
Follow state and local nonprofit regulations
Sales Tax Exemption
Make sure you know your state rules and regulations on sales tax. In Missouri, the Department of Revenue grants sales/use tax exemption.
Charitable Solicitation Registration
Missouri requires you to register before you solicit donations. You can register with the State’s Attorney General office.
Property Tax Exemption
If the organization owns property, check with the local tax assessor’s office for the right forms.
Bulk Mail Permit
Do this at the main branch of your local post office; it will help reduce some costs with any direct mail campaigns.
The Midwest Center for Nonprofit Leadership has a series of fundraising courses to help teach common techniques on how to raise financial support for nonprofit organizations.
File your taxes
Most organizations with gross receipts over $25,000 must file IRS Form 990. Organizations with gross receipts less than $25,000 have to file an e-postcard, Form 990-N, again with a few exceptions.
File an annual report
Learn how to: File an Annual Report in Missouri
Get help creating a nonprofit in Missouri
These resources can help you create your nonprofit and guide you on what you’ll need to do to stay compliant:
- The Foundation Center's Establishing a Nonprofit Organization Tutorial
- IRS Tax Information for Charities & Other Nonprofits
- Missouri Secretary of State’s Office
- Free Nonprofit Micro eMBA (non-degree training modules to learn the basics of starting a nonprofit)
You may also need the following Resource Partners as you create your nonprofit. Head over to The Resource Navigator to further filter your search by business industry, zip code/city/distance and/or specific need—or just give us a call at 866-870-6500 and we’ll make your Personal Action Plan of next-step resources for free.