How to Start a Nonprofit in California: 18 Key Steps & Essential Forms

The first step in starting a new nonprofit organization is understanding the state and federal regulations! But don’t get overwhelmed—this blog post will guide you through the ins and outs of how to start a nonprofit in California.

This step-by-step guide will include:

• State-specific rules for California nonprofits
• Links to your essential documents and forms
• The cost and timeline of the process
• How to stay compliant after your nonprofit is established

So let’s get started: here’s how to start a nonprofit organization in California in 18 steps!

Step 1: Name Your Nonprofit & Build Your Identity

Did you know that there are nearly 145,000 registered nonprofit organizations in California? With those stats, it’s essential that your nonprofit’s brand identity is eye-catching and unique! Pick a name that’s unique, memorable and relevant to your cause.

There are a few other boxes to tick when it comes to building your identity, including your:

• Mission Statement. In 1-2 sentences, this statement should sum up your organization’s purpose and how you work to achieve it.

• Vision & Values Statement. This statement is aspirational, and aims to describe what your California nonprofit would look like in its most ideal state.

• Branding. Tell the story of who you are with tools like your logo, colors, fonts and more. The name of the game here is consistency—even just pulling together a brand kit in Canva is a great place to start!
• Type of nonprofit. With 32 different types of 501 organizations to choose from, be sure you know which one you officially qualify under. 501(c)(3)s are the most well-known type because of their charitable status.

Step 2: Choose Your Nonprofit’s Corporate Structure

California nonprofits can fall under four different types of corporate structure:

• Religious corporations such as churches, synagogues or mosques.
• Public benefit corporations are for organizations designed for charitable purposes, and are the most common structure for nonprofits in California. If you’re looking to start a 501(c)(3) or other IRS tax exempt organization, this is the structure for you!
• Mutual benefit corporations may or may not aim for IRS tax exemption, but they absolutely cannot create the impression that their purpose is charitable, religious or for public benefit.
• Mutual benefit common interest development (CID) corporations are for common interest development associations like homeowners associations. They do not need to be officially incorporated.

Step 3: Write a Business Plan

A nonprofit business plan is written as a map of your organization’s ideal future. It gives a clear picture of your current programs and finances, your goals for the next 3-5 years and your plan about how you’ll achieve those goals.

Writing a business plan for your California nonprofit can help you:

• Establish your mission and identity
• Set great goals
• Secure funding from sources like grants and sponsors
• Build an effective board of directors
• Attract eager volunteers
• And more!

What does a nonprofit business plan include?

Your nonprofit’s business plan should include these elements:

• Executive Summary: An at-a-glance overview at the start of your plan that covers your nonprofit’s mission, vision and values, goals and their timelines, history, programs, financing plans and where your funding will go.
• Programs and services: An explanation of how your programs work, who they help and the positive changes they make.
• Market analysis: Information about your beneficiaries, target audience or donor base, insights into your competitors and names of potential partners.
• Marketing Plan: Descriptions of the tools and timelines you’ll use to build your organization’s presence.
• Operational plan: How your organization runs on a day-to-day level, including who does what, what partnerships you have or anticipate, what insurance and licenses you need and the typical costs of your programs.
• Impact plan: A breakdown of your goals, and how you’ll both measure and achieve them.
• Financial plan: A portfolio of your estimated expenses and revenue that shows how your organization will stay financially stable.

Step 4: Recruit an Awesome Board of Directors

When learning how to start a nonprofit in California, one of the most important steps is recruiting your board of directors! These folks oversee your nonprofit’s dedication to its mission, offering insight and support with their unique skills and experiences.

Typical nonprofit board positions and responsibilities include:

• President/Chair. This role leads the organization, runs meetings and represents the group externally, ensuring the overall direction aligns with its mission.
• Vice President/Vice Chair. The Vice President supports the President, stepping in for them if needed and collaborating on strategic planning.
• Secretary. Your Secretary takes accurate and precise board meeting minutes, handles official correspondence and keeps the organization’s records and documents well-organized and accessible.
• Treasure. This role manages financial matters like budgeting, financial reporting, and overseeing transactions.
• Committee Officers. If your board ends up establishing committees for specific projects, these officers will be those project’s leaders! They’ll own organizing, coordinating and reporting on the committee’s activities.

Your board members should be passionate about your organization, eager to participate and established in your field. When seeking out potential directors, strive for board diversity—the best teams have a variety of perspectives and lived experiences!

In California, a nonprofit can be established with a single director on the board, but you’ll likely have a hard time receiving 501(c)(3) status. If you want tax exemption, appointing at least three members is the way to go.

Step 5: Appoint a Registered Agent

A registered agent is either an individual or corporation that submits and receives all of your nonprofit’s legal paperwork, like tax notices and reports. They’re also in charge of receiving documents like litigation notices, and immediately bringing them to your attention.

You can either hire an external registered agent or appoint one from your board or staff. The only requirement is that they be in a physical office at all times during business hours. Unless you have a very dedicated and consistent team member, hiring out is a good bet!

Step 6: File Your California Articles of Incorporation

Your nonprofit’s articles of incorporation are the documents that officially establish your organization! They register key information like your name and location, and allow you to apply for 501(c)(3) exemption.

The state of California helpfully offers templates for your articles of incorporation, which will look a bit different depending on the structure you chose for your nonprofit:

• Form ARTS-MU: Articles of Incorporation – Mutual Benefit Corporation
• Form ARTS-PB-501(c)(3): Articles of Incorporation – Public Benefit Corporation
• Form ARTS-RE: Articles of Incorporation – Religious Corporation
• Form ARTS-RE: Articles of Incorporation – Common-Interest Development Corporation

Once you’ve filled out the form, you can file it online with the Secretary of State. The associated fee is $30, and turnaround depends on the state’s current processing times.

Step 7: File Your Initial Report

In California, nonprofits are required to file an Initial Report within 90 days of filing the Articles of Incorporation. This is done by filing Form SI-100 either in person, by mail or online—but considering that the online version has a one-day turnaround, we think that’s the obvious choice! It also comes with a $20 fee.

This form has to be redone every two years, and the information you’ll need includes:

• Your organization’s name and physical address (not a PO box!)
• The 7-digit file number issued by the California Secretary of State at the time of registration
• The name and address of your Registered Agent
• The name and address of the Board Directors

Overall, it’s not a tough form to fill out! However, missing the 90 day deadline can hit you with a $50 fee, so it’s best to keep it high on your to do list after your articles are filed.

Step 8: Apply for your Employer Identification Number (EIN)

Once your Articles of Incorporation have been received, it’s time to apply for an Employer Identification Number (EIN). You might also see it called your Federal Tax Identification Number or Federal Employment Identification Number.

These nine digits are like your California nonprofit’s social security number, and allow you to:

• Open an nonprofit bank account
• Hire employees
• Submit your 990 returns (more on that below)

To apply for an EIN, you need to file IRS Form SS-4, which can either be submitted and obtained immediately online, or by fax or mail—though expect a wait time of about 6 business days through the post.

Best of all? The process is free!

Step 9: Draft Your Nonprofit Bylaws & Conflict of Interest Policy

Starting a nonprofit in California—and anywhere else in the United States!—requires you to establish a set of nonprofit bylaws and conflict of interest policy.

Think of bylaws as your nonprofit’s operating manual, with information like:

• Duties and roles of directors and officers
• Elections procedures
• How to set up meetings
• Quorum requirements
• Membership structure
• Your conflict of interest policy

A conflict of interest policy defines what a conflict of interest actually looks like, and gives you the processes to manage if one comes up. This can save you a real headache in the future if an uncomfortable situation arises!

Step 10: Hold Your First Board Meeting

With the paperwork in progress, now it’s time to hold your very first board meeting! This is a time to review your progress so far and discuss and vote on plans for what comes next.

The agenda for your initial meeting can include:

• Formally approving bylaws & conflict of interest policies
• Organizing any committees you need
• Preparing to open your nonprofit bank accounts
• Establishing the year’s accounting period
• Gathering key documentation into a record book

Have your Secretary document every step of this process and keep a thorough set of records. Thoroughness will help you fact check along the way and protect you in case of any legal trouble.

Step 11: Get a Nonprofit Bank Account

With the preliminary forms filed, it’s time to open up a bank account for your California nonprofit. After all, you’ll need a place to hold the money as it starts coming in!

In order to get a bank account started, you’ll need:

• A copy of your California nonprofit articles of incorporation
• Copy of your nonprofit’s bylaws
• Your California nonprofit’s EIN

Some banks will also require a resolution from your board of directors, so call ahead and see if that’s necessary.

Step 12: Register with the California Attorney General’s Registry of Charitable Trusts

If you’re planning on fundraising at any point, it’s essential to register that information with the state. You can do this by filing Form CT-1, which must be filed within 30 days of receiving any sort of donation—but with a 30-90 day processing time, we recommend doing it before then. 

Form CT-1 and instructions for filing are both available here, and have an initial registration fee of $50. Every year, you’ll have to renew by filling out Form RRF-1, which has a fee determined based on how much money you raised in the year, which is as low as $25 for anything under $50k.

Because this form will require information like your articles of incorporation and nonprofit bylaws, it’s essential to follow all these steps in order!

Step 13: Apply for Federal Tax Exemptions

If you’re learning how to start a nonprofit in California, it’s inevitable that you’ll find your way towards questions about how to get registered as a 501(c)(3).

But what is a 501c3 organization? Essentially, it’s any charitable organization that the IRS exempts from paying taxes.

To qualify for 501(c)(3) status in California (and anywhere else in the United States!), your nonprofit’s mission must be:

• Charitable
• Religious
• Scientific
• Educational
• Literary
• Fostering national/international amateur sports competition
• Preventing cruelty to animals/children
• Or, testing for public safety

In order to get 501(c)3 Federal tax-exempt status from the IRS, you can file one of two forms online:

• Form 1023. This is a big form that requires a lot of information about your organization, so expect to put some time into it! It has a $600 fee associated.
• Form 1023-EZ. This is a simplified and streamlined form that you can fill out online. It’s available for smaller nonprofits with annual gross receipts of less than $50,000 and total assets of less than $250,000. It has a $275 fee associated.

These instruction forms can guide you through the process. Once filed, expect your official letter of determination to come in at around the six month point—but don’t worry, there’s plenty you can do without this letter!

Step 14: Apply for California State Tax Exemption

What makes starting a nonprofit in California different from starting a nonprofit in Texas or anywhere else in the USA is how the state tax exemptions work. 

To get state tax exemption, you must fill out California Form 3500A and send it, along with your federal determination letter (approval for federal tax exemption!) to:

Exempt Organizations Unit MS F120

Franchise Tax Board

PO Box 1286

Rancho Cordova, CA 95741-1286

As you can see, applying for state tax exemption typically happens after you’ve received your federal determination letter. If you want to do it before then, it’s possible, but you’ll need to fill out a slightly more complicated version of Form 3500 and pay a fee of $25.

If you stick with Form 3500A, the process is completely free.

Step 15: Apply for Other Licenses

There are a couple of unique licenses and permits that you might need to apply for in California, including bingo licenses and additional filing and fees for raffles. It might seem silly, but it’s important to be sure you’re compliant with the rules of the California Registry of Charitable Trusts!

If you’re uncertain about what activities need licenses, explore the Attorney General’s website, chat with organizers of similar nonprofits or connect with a nonprofit lawyer. This might even be information that one of your directors has!

Step 16: Hire Your Core Staff

Nonprofits don’t run without a core staff. Once your ducks are in order, it’s time to bring the board together and get hiring! There are a lot of different roles you could fill, but when you’re just starting a nonprofit, focus on the essentials so you’re using your budget effectively.

Here’s a few examples of typical jobs (and their salary!) at nonprofit organizations in California:

• Executive Director: $93,498
• Marketing Manager: $85,850
• Accounting Manager: $86,837
• Fundraising Coordinator: $67,602
• Volunteer Coordinator: $58,878

Check out CalNonprofits, Idealist or other California nonprofit job boards to get the gears turning on job descriptions.

Step 17: Choose Your Nonprofit Software

Figuring out how to start a nonprofit in California is the first step—then it’s time to learn how to run it! As you start preparing for launch, it’s likely that you’ll see the administrative work increasing, especially when it comes to bringing in members.

The solution? Membership management software!

WildApricot’s award-winning membership management software is designed to help you:

• Build a branded website from scratch (or integrate with a website you already have!)
• Create a robust member database
• Streamline member communications
• Securely process payments for dues and events
• Manage events (kick off fundraiser, anyone?)
• And more!

Sign up for our 60-day free trial today and see how we can help you build efficient systems from day one.

Step 18: Launch!

With all of your legal obligations filled, all that’s left is to take the plunge into launching! A great launch strategy can help you make a strong impression in your community, invite an influx of members and build trust with your beneficiaries. If you want to operate from a community-centric fundraising model, these relationships are especially important.

You can take your launch to the next level by:

• Leading with a spectacularly branded nonprofit website
• Investing in marketing and publicity opportunities
• Connecting with prospective volunteers nice and early
• Reaching out to local businesses for partnership
• Making connections with influencers
• Gathering your fundraising ideas for an AMAZING kick-off event
• Securing day-one corporate sponsors

Don’t be afraid to get loud—this is your California nonprofit’s birthday!

Staying Compliant

There are a couple of annual obligations you’ll need to fulfill to stay compliant and keep your 501(c)(3) status. We’ve mentioned a couple of these forms so far, but are also putting them here so you can see them in one place!

These items include your:

• Annual Report. This publicly available document is your chance to brag, and should include information about your programs, fundraisers, finances, success stories, hiring changes and more. Ideally, this report will invite sponsors, major donors, corporations and foundations to donate.

• Corporate Report (SI-100). Known as your Statement of Information, this form must be re-filed every two years. 

• Annual Return (FTB-199). To retain state tax exemption, the California Franchise tax Board requires you to annually file FTB-199 by May 15th. If your gross annual receipts were less than $25,000, you can file the simplified FTB-199N online.

• Federal IRS Form 990. Similar to a tax return, this form is where you document your expenses and income, information on your operational structure and major donor information. Connect with an accountant or your board’s treasurer for help here—this one is an important legal necessity!

• Charitable Solicitations Renewal (Form RRF-1). We already mentioned this guy, but it bears bringing up again! In order to be allowed to collect donations, you’ll want this to be filed no later than 4 months and 15 days after the close of your organization’s fiscal year.

If looking at these forms has you feeling a little nervous, don’t be afraid to connect with your board of directors! They can either answer your questions or direct you to someone who can help. Having a nonprofit lawyer on hand, even just for your first year, can save you some stress.

FAQ

Here are a few frequently asked questions about how to start a nonprofit in California:

How long does it take to start a nonprofit in California?

It’s perfectly possible to start a nonprofit in under a year. Waiting up to six months for your federal tax exemption will likely be the longest step, but many other steps can be done relatively quickly. After that, how fast you bring together a board and write things like your business plan is up to you!

How much does starting a nonprofit in California cost?

The base costs of the forms we’ve gathered here come out at about $700, but you should also factor in:

• Salaries
• Insurance
• Overhead if you choose a brick-and-mortar location
• Consultant fees

Ultimately, your nonprofit’s budget is based on your needs. If you’re keeping things small, it’ll be cheaper—but if you have the money to invest in large ambitions, that’s an equally valid way of doing things!

Can I start a nonprofit by myself?

Technically, yes—but it will be much harder to get things like tax-exempt status. Plus, the labor of running a nonprofit alone might get overwhelming fast. We’d recommend having a small team on hand!

How many board members does a nonprofit need in California?

Legally, you only need one board member to establish a nonprofit in California. However, the IRS will typically want at least three separate board members in order to grant your organization federal tax exemption. If you go that route, the Chair, Secretary and Treasurer positions should be the first ones you fill.

Can I lose tax-exempt status?

Yes, your California nonprofit can lose tax-exempt status if you:

• Do not comply with your annual federal filing requirements
• Contribute to political campaigns or lobby beyond what’s acceptable
• Make money from a business outside of your tax-exempt purpose
• Have a severe conflict of interest
• Have a member who is personally benefiting from your work

As long as you operate ethically and keep up with your legal filing requirements, it should be easy to keep your 501(c)(3) status!

How to Start a Nonprofit in California—And Have Fun!

We hope this full guide to starting a nonprofit in California has been useful to you. As long as you go step-by-step and ask for help when you need it, you’ll be sure to enter the nonprofit world with a real splash!

Speaking of help—don’t forget that we’re here at WildApricot to simplify the daily administrative work of running your California nonprofit. Sign up for a 60-day free trial today to explore all that we have to offer!