Considering starting a nonprofit in Georgia? The most effective startup founders and boards follow these steps to establish their nonprofits.
Georgia is well-known for its southern hospitality and being the birthplace of some of the most influential people, including Dr. Martin Luther King Jr. But did you know it’s also one of the best states to start a nonprofit organization? Among other reasons, this is thanks to its low cost of doing business, friendly environment, and well-established infrastructure.
So if you’re looking to start a nonprofit in Georgia, you made an excellent decision. But what does it take? How will you raise money for your nonprofit? How about recruiting a board of directors? What nonprofit board management software will help you run your nonprofit efficiently? And how can you make sure your nonprofit stays on track? These are just some of the questions we’ll answer in our step-by-step guide to starting a nonprofit in Georgia. So let’s get to the details!
1. Name Your Organization
The name of your nonprofit should be short, catchy, and easy to remember. It should also convey the nature of your organization and reflect its mission. It helps to seek the advice of board members, volunteers, and other stakeholders when choosing a name.
The only requirement for naming your organization in Georgia is that your chosen name is not already taken by another entity. Conduct a search on the Georgia Secretary of State’s website to ensure your chosen name isn’t taken. Then, fill out a name reservation request to reserve your chosen name for 30 days. The filing fee is $25.
2. Recruit a Board of Directors
A nonprofit board of directors is essential to running any nonprofit organization. It plays a crucial role in making decisions regarding the organization’s direction. In addition, a good board of directors ensures the nonprofit remains focused on its core purpose while simultaneously fulfilling its goals.
Georgia requires a nonprofit to have at least one board member. However, the federal government barely offers state tax exemption status to organizations with less than three unrelated directors. So depending on the nonprofit board positions you want your organization to have, you may need to recruit more than one person.
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3. File Articles of Incorporation
Filing Articles of Incorporation with Georgia’s Secretary of State means you’ve officially agreed to operate your organization within the confines of the law. Then you can set up a bank account, open a checking account, register your nonprofit with the IRS, request an employer identification number, and file tax-exempt status with the IRS.
Georgia doesn’t have a specific Articles of Incorporation form, but requires the document include the following:
- Corporate name
- Nonprofit statement
- Registered agent name and contact information
- Membership statement
- Principal office address
- Purpose of nonprofit
- Dissolution statement
- Signature
Use this Articles of Incorporation template from the IRS to get started. The Articles of Incorporation and a Transmittal Information Form must be submitted either online ($100 filing fee), by mail ($110 filing fee), or in-person ($110 filing fee). If the Articles are approved for filing, a certificate of incorporation will be sent to the applicant, usually within five to seven business days for online filings and within 15 business days for paper filings.
4. Obtain Employer Identification Number
The next step is to apply for the nine-digit federal employer identification number (EIN). An EIN is a unique number that helps the IRS identify your organization. You’ll use the identification number to file section 501, open a bank account, and submit 990 returns.
Here’s what it takes to obtain your EIN from the IRS:
- Fill out IRS Form SS-4.
- Submit the form via mail, fax, phone, or online.
- Get your EIN immediately if you applied via phone or online, within four business days by fax, and four to five weeks by mail.
5. Establish Governing Documents and Policies
Once you have obtained your EIN, you’re ready to establish governing documents for your nonprofit. This includes establishing bylaws, policies, and procedures.
Establishing these documents helps ensure your nonprofit operates according to its stated mission and vision. In addition, they protect your organization against lawsuits and other legal actions. This is also an excellent opportunity to stipulate various roles for your board members. For instance, the nonprofit treasurer might be responsible for managing the finances, while the secretary might be tasked with keeping records.
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6. Apply for Georgia Tax Exemption(s)
The final step to start a nonprofit in Georgia is applying for tax-exempt status. Here are some things you must know about this process:
- You’ll need to complete Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. For this, you’ll need to pay a $600 filing fee.
- Alternatively, if your organization is smaller (less than $50k gross income expected for the first three years), you may opt to file Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Expect to pay a $275 filing fee.
- Wait one to six months for the IRS determination letter
Once you receive your IRS determination letter, apply for a Georgia nonprofit tax exemption with Form 3605 (Application for Recognition of Exemption) from the Georgia Department of Revenue. You’ll also need to submit your Articles of Incorporation, bylaws, statement of activities in Georgia, and a copy of your IRS determination letter.
Understanding the Board of Directors' Role in a Nonprofit
The nonprofit board of directors is tasked with several critical responsibilities, including:
- Oversee the effective operations of the nonprofit
- Ensure the nonprofit fulfills its legal obligations
- Set goals and objectives
- Provide proper financial oversight
- Improve the nonprofit’s public standing
- Recruit, supervise, retain, evaluate, and compensate the CEO or general manager
- Establish a policy-based governance system and adopt technologies that promote seamless board management
Your board of directors helps guide the nonprofit from day one, so don’t delay on board member recruitment.
Getting Started with OnBoard
If you’re looking for the most effective, simple, and secure way to run your nonprofit board meetings and streamline board business, your search ends here! OnBoard provides a first-class board management platform designed specifically for nonprofits. It offers all the features you’d expect from a modern software solution, including automated agenda creation, online voting, real-time collaboration, and comprehensive reporting, among other capabilities.
Good boardwork starts with effective meetings. Download OnBoard’s free board meeting agenda template to organize a board meeting.
Frequently Asked Questions
How Much Does it Cost to Start a Nonprofit in Georgia?
It costs $100 to file articles of incorporation, and an additional $275 to apply for the tax-exempt status via form 1023-EZ, or $600 via form 1023. So on average, expect to spend between $375 and $700 to set up a nonprofit in the Peach State.
How Many Board Members are Required for a Nonprofit in Georgia?
The state of Georgia requires nonprofits to have at least one board member. However, the IRS barely grants tax-exempt status to organizations with fewer than three board members.
Does a Nonprofit Need a Business License in Georgia?
Yes. After filing your Articles of Incorporation, you’ll still need to apply for business licenses and permits, which all new entities require to operate in Georgia.
Can an LLC be a Nonprofit in Georgia?
Yes, a limited liability company can still be a nonprofit in Georgia.
About The Author
- Jillian Walker is a customer success manager who specializes in helping nonprofit organizations get the most from their board meetings. She's also the founder of the Indianapolis-based non-profit TraceIndy, which is dedicated to connecting professional women across communities
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