How Much Does it Cost to Start a Nonprofit Organization?


Starting a nonprofit organization can be costly, but there are ways to get money to cover these costs. In this article, we’ll discuss the different expenses involved in starting a nonprofit and how to get funding to cover them. We’ll also point you to our funding article for more information.


Common Initial Expenses for Nonprofits

The exact fees and expenses you’ll encounter when starting a nonprofit will depend on the state in which you incorporate, but there are some common expenses that all nonprofits will face.

Here are some of the most common initial expenses for nonprofits:

Articles Of Incorporation Fee: The fee for filing your Articles of Incorporation with the state in which you’re incorporating will vary, but it’s typically around $50.

Charitable Registration Fee: Most states require nonprofits to register as charities; this can cost anywhere from $25 to $500.

Business Registration Fee: You’ll also need to register your nonprofit as a business in most states; this fee will vary depending on the state in which you’re incorporating.

Business Insurance: Many states require nonprofits to carry liability insurance; this can cost anywhere from a few hundred to a few thousand dollars per year.

501(c) Filing Fee: If you want your nonprofit to be tax-exempt, you’ll need to file for 501(c) status with the IRS. Determine which subset of 501(c) to apply when you file. The filing fee is $850.

Salaries: You’ll also need to factor in the cost of salaries for yourself and any employees you have. Salaries will vary depending on the position and the experience of the person being hired.

Rent And Overhead: Most nonprofits will need to pay rent for their office space, and they may also have other overhead costs such as utilities and internet.

Office Supplies: You’ll need to purchase office supplies, such as furniture, computers, and software. The costs will vary depending on what you need.

Initial Marketing Expenses: You’ll need to spend some money on marketing your nonprofit, whether it’s through online advertising, print ads, or public relations.

Initial Program Expenses: If your nonprofit has a program or service that you’ll be offering, you’ll need to factor in the cost of materials, supplies and staff time.

Initial Fundraising Expenses: You may need to hire a fundraiser or pay for other fundraising expenses, such as postage, printing, and website fees.

Website Construction: If you don’t already have a website for your nonprofit, you’ll need to factor in the cost of designing and building one. The cost will vary depending on how complex you want your website to be.

Though the costs of these expenses may vary, you can expect to spend several thousand dollars on startup costs for your nonprofit. Knowing your startup expenses is important to understand when using a business plan template to complete the financial projections of your nonprofit business plan.


How to Get Money to Cover These Costs

There are a few different ways to get money to cover the costs of starting a nonprofit. You can:

-Apply for grants: There are many foundations and government agencies that offer grants to nonprofits. This is a great way to get funding, but it can be competitive.

-Crowdfunding: You can use platforms like Kickstarter or GoFundMe to raise money from the general public.

-Solicit donations: You can ask individuals, businesses, and other organizations to make donations to your nonprofit.

-Have a fundraiser: You can hold an event or campaign to raise money for your nonprofit.


Bottom Line

As you can see, there are many costs associated with starting a nonprofit organization. But, there are also many ways to get money to cover these costs. If you’re thinking about starting a nonprofit, be sure to budget your costs and explore ways to initially make money.