How Much Does It Cost to Start a Nonprofit?

What You Pay to Form the Nonprofit at the State Level

Before the IRS will even look at a tax-exemption application, your organization has to exist as a nonprofit corporation, trust or association under state law. That means filing articles of incorporation with your state's filing office and paying its fee.

These fees vary by state. Texas charges $25 for its Form 202 Certificate of Formation for a nonprofit corporation. California charges $30 for nonprofit articles of incorporation. Florida requires $35 for the articles plus $35 to designate a registered agent, for a $70 minimum, according to each state's official fee schedule. Check your own state's Secretary of State or equivalent filing office for its current form and fee before you file.

What the IRS Charges for Tax-Exempt Status

Once your nonprofit corporation exists, you apply separately to the IRS for 501(c)(3) tax-exempt status. The IRS charges a user fee that depends on which form you use:

• Form 1023-EZ: a $275 user fee, available only to organizations projecting gross receipts of $50,000 or less for three years and total assets of $250,000 or less.
• Form 1023: a $600 user fee, required for everyone else, including churches, schools, hospitals and LLCs, which cannot use the EZ form regardless of size.

Both fees are paid through Pay.gov when you submit the application, and the IRS does not process an application until the fee is paid, per the IRS.

Getting an EIN Costs Nothing

Every nonprofit needs an Employer Identification Number before it can open a bank account or apply for tax exemption. The IRS issues EINs directly through its online application at no charge. If a service asks you to pay for a basic EIN, you are paying for something the IRS gives away for free.

Costs Beyond Government Filing Fees

State and federal filing fees are only part of the budget. Common additional costs include:

• Legal or consulting help drafting bylaws, conflict-of-interest policies, and the narrative sections of a full Form 1023, if you need one.
• A registered agent, which every state requires a nonprofit corporation to maintain at a physical address in its state of formation, the same rule that applies to LLCs and for-profit corporations. You can serve as your own agent at no cost if you are available at that address during business hours, or pay a registered agent service.
• State charitable-solicitation registration, required by many states before you solicit donations from their residents, with its own filing fee and often an annual renewal.
• A name reservation, in states that offer one, if you want to lock in your nonprofit's name before filing.

What It Costs to Stay Compliant Each Year

Formation and exemption fees are one-time costs. After approval, most 501(c)(3) organizations file an annual IRS information return (Form 990, 990-EZ, or 990-N, depending on size), which carries no IRS filing fee itself but does take staff or professional time to prepare. Most states also require an annual or biennial report from the nonprofit corporation, with its own fee, to stay in good standing. Missing the IRS return for three consecutive years triggers automatic revocation of tax-exempt status; missing the state report repeatedly can lead to administrative dissolution.

Putting the Total Together

For a straightforward nonprofit filing Form 1023-EZ, a reasonable all-in government-fee estimate is the state's incorporation fee ($25 to $70 in the examples above) plus the $275 IRS fee, or roughly $300 to $345 before any legal help. An organization that must file the full Form 1023 should budget the same state fee plus the $600 IRS fee, or roughly $625 to $670, before legal or consulting costs. Add charitable-solicitation registration fees on top if you plan to fundraise across state lines.

Legal Help Costs More Than the Filing Fees

For organizations eligible for Form 1023-EZ, the paperwork is largely checkbox-based and many founders complete it themselves. The full Form 1023 asks for a detailed narrative of your activities, finances and governance, and mistakes there can slow down or jeopardize approval. If your activities are complex, budget for a tax professional or nonprofit attorney rather than treating the $600 user fee as the whole cost.

A Registered Agent Is a Recurring Line Item, Not a One-Time Fee

Unlike the state incorporation fee and the IRS user fee, which you pay once, a registered agent is a standing requirement for as long as the nonprofit corporation exists. If you do not want to serve as your own agent, or you lack a reliable street address in your state of formation, budget for an ongoing registered agent service rather than a single setup cost.

"Nonprofit" and "Tax-Exempt" Are Two Different Filings, With Two Different Fees

Incorporating as a nonprofit at the state level does not automatically make you tax-exempt, and the two filings have separate costs. Some founders are surprised to learn they owe a second, larger fee to the IRS after already paying their state. Plan for both from the start.

Multi-State Fundraising Multiplies the Registration Fees

If your nonprofit solicits donations from residents of more than one state, you may need to register (and pay a fee) in each state where you actively fundraise, not just your state of incorporation. Check each target state's charitable-solicitation requirements before you launch a multi-state campaign; a tax professional or nonprofit attorney can help you scope this out.

Keep Records to Avoid Costlier Problems Later

Missing an annual IRS return for three straight years results in automatic revocation of 501(c)(3) status, and reinstating it means reapplying, and paying the IRS user fee again. Treat your annual filing calendar as part of the real cost of running a nonprofit, not an afterthought.