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Starting a nonprofit in Indiana is an exciting and rewarding experience, but it also requires a lot of effort and work.
If you're looking to start a nonprofit in Indiana but don't know where to begin, we've got you covered. In this blog, we'll explain exactly how to do it — from choosing your name and applying for tax-exempt status to starting your fundraising efforts from scratch.
11 steps to start your nonprofit organization in Indiana
When considering starting a nonprofit in Indiana from scratch, it can be hard to know where to begin. When deciding to take on the endeavor, it is important to get clear on a few fundamental things, including:
Community needs: Consider what problems you want to address or what positive changes you want to make.
The market: Research nonprofits in Indiana land that work in similar areas or address similar issues. Identify any gaps or needs that your nonprofit could address.
Your goals: Clarify your nonprofit's specific goals and objectives. Determine what you hope to achieve in the short term and long term.
Your mission statement: Write a clear and concise mission statement that articulates who you are, what you do, and who you serve.
Feedback: Seek feedback from stakeholders, potential beneficiaries, and members of your community to ensure that your mission statement accurately reflects community needs
Once you've determined your organization's core mission and goals, it's time to name your nonprofit. Not only is this step in the process important for marketing and branding purposes, but it's also a crucial part of the legal process of starting a nonprofit in Indiana.
When deciding on your organization's name, be sure to choose a name that:
Reflects your mission and goals
Describes what you aim to do
Is easy to spell and pronounce
Offers room for future growth
Per Indiana state rules, your name must also include the words "corporation," "company," "incorporated," or "limited," or an abbreviation of one of such words.
Then, once you've determined your name, search for it using Indiana's online business search portal to ensure that it's unique and hasn't already been taken by another organization.
Step 3. Recruit a leadership team
Once you've determined your organization name and confirmed that it is not already in use, it's time to create a leadership team.
Identifying an Incorporator and a Board of Directors is not only a strategic decision that can help make your nonprofit a success, but it's a required one in Indiana.
Incorporator: Nonprofits must recruit at least one Incorporator who will be responsible for signing the Articles of Incorporation.
Directors: You must assemble a board of at least three directors who will help guide your nonprofit through strategic decision-making. You'll also need to appoint a president, a secretary, a treasurer, and other officers appointed by the board of directors. Two or more offices may be held by the same individual. You'll also want to assign each board member to a committee.
When choosing your leadership team, be sure to select people who are trustworthy, dependable, and bring a skillset to the table. Whether they're already a member of your organization or a trusted volunteer, they'll help you make crucial decisions about your charity.
Step 4. Appoint an indiana registered agent
Appointing a registered agent is a vital step when joining the nonprofit sector in Indiana. In essence, a registered agent acts as a reliable point of contact for legal matters. This designated individual receives important documents and official correspondence on behalf of your nonprofit, such as legal notices and tax forms.
Your nonprofit's registered agent must be located in Indiana and available during regular business hours to receive legal correspondence and communication.
Step5. File the Articles of Incorporation
One of the most crucial steps in starting a nonprofit in Indiana is filing the indiana articles of Incorporation on the Indiana Secretary of State website. This will officially establish your nonprofit as a legal entity in the state.
If you file online, it costs $30, or you can file by mail for $50.
In Indiana, like in other states, nonprofits are required to obtain an EIN, or Employer Identification Number. An EIN is like your organization's social security number. It's used for tax purposes, including opening a bank account, hiring employees, and applying for tax-exempt status.
To get an EIN, you can apply online using the IRS Form SS-4 on the IRS website or submit it by mail. The application process is free, and you'll receive your EIN shortly upon approval.
Step 7. Draft by laws
Next, you'll need to call a meeting with your board to draft bylaws that align with your mission and comply with Indiana nonprofit laws.
Bylaws are the rules and procedures that govern how your nonprofit operates. They outline the structure of your organization, the responsibilities of the board and officers, how meetings will be conducted, and how decisions will be made.
When creating your bylaws, be sure to:
Use clear and concise language: Make the language easy to understand for all board members and stakeholders. Avoid jargon and overly complex language.
Make them comprehensive: Your bylaws should cover all essential aspects of your organization's governance, including board structure, officer roles, meeting procedures, decision-making processes, and conflict resolution mechanisms.
Alignment bylaws with your organization's mission and values: Ensure that the bylaws reflect and support the goals of the organization.
Consider flexibility: Include provisions that allow for amendments to the bylaws as the organization evolves and grows.
Outline board structure and responsibilities: Clearly define the board of directors, its qualifications, terms of office, and responsibilities.
Determine meeting procedures: Detail the frequency, notice requirements, quorum, voting procedures, and more.
Address finances: Establish guidelines for budgeting, accounting, and reporting requirements.
Create a conflict of interest policy: Include a conflict of interest policy that requires board members and officers to disclose any conflicts of interest and abstain from voting on matters in which they have a personal or financial interest.
Include dissolution procedures: Include provisions for the process of distributing assets and winding up affairs in accordance with state law and IRS regulations.
Step 8. Apply for federal and state tax-exempt status
Once you've created your bylaws, you'll need to apply for both federal and state tax exemption in order to become a tax exempt entity.
Federal tax-exempt status: In order to be a tax exempt organization, fill out Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the internal revenue service/internal revenue code. You'll need to provide detailed information about your nonprofit's activities, finances, and governance.
State tax-exemptions: To file for state sales tax exemption for your nonprofit corporation, you'll need to file Form NP-20A: Nonprofit Application for Sales Tax Exemption with the indiana department of Revenue, which is due within 120 days of incorporation. You'll also need to file state tax exemption using Form NP-20A: Nonprofit Application for Sales Tax Exemption and offer proof of your irs determination letter. Once the application is approved, you'll receive a nonprofit tax registration certificate.
Step 9. Obtain other necessary permits and licenses
Once you've filed all of the appropriate forms and established the necessary regulatory foundation for your nonprofit, it's time to start fundraising.
First, build a fundraising plan that outlines your goals, strategies, and tactics. Plus, be sure to consider how you'll cultivate donor relationships. Then, Put your fundraising plan into action by launching campaigns, events, and appeals to solicit donations and support. Keep track of your fundraising efforts and evaluate their effectiveness over time.
One of the best ways to start your nonprofit, and begin bringing in funds and connecting with donors, is by using a free all-in-one donation platform, designed specifically for charities. Unlike other platforms, Zeffy offers free marketing and engagement tools, event ticketing and management, raffle and auction tools, and so much more — without charging nonprofits a cent.
So not only can nonprofits start fundraising in minutes, but they don't have to pay any upfront, monthly, or hidden fees, ever. In fact, over 10,000 nonprofits use and love Zeffy for its powerful but simple —and always free—software designed to help make the world a better place.
As a legal nonprofit in the state of Indiana, you'll need to remain compliant with federal and state rules and regulations throughout the year. This includes:
Maintaining records: Keep accurate and up-to-date records of your nonprofit's activities, finances, and governance. This includes meeting minutes, financial statements, tax filings, and other important documents.
Filing annual reports: File annual reports with the IRS to maintain your nonprofit's legal and tax-exempt status.
Staying informed: Stay informed about changes to Indiana state laws and regulations affecting nonprofit organizations. Attend training sessions, workshops, and webinars to learn about best practices and compliance requirements.
Learn how this Indiana nonprofit raised 42,000 for free
Irish Aquatics is an Indiana-based swim team dedicated to cultivating passion, individuality, and excellence in each swimmer in and out of the pool. The nonprofit is a beloved community organization in the Michiana area — a parent-run organization with an elected board of directors, Irish Aquatics organizes lessons, meets, and other programs for the community to participate in.
One way Irish Aquatics raises money to support these programs is by selling passes to its facilities and events. Recently, this nonprofit hosted the 2024 IN Swimming Senior State Championships and needed a fundraising solution that would allow it to easily sell custom ticket types on a user-friendly form.
When they searched for nonprofit website builders and event ticketing forms, they found that many were costly: they came with hefty upfront prices, processing fees, and more. With such steep prices, less money would go to supporting their programs. That is until they found Zeffy, the completely fee-free all-in-one fundraising platform.
With Zeffy, Irish Aquatics was able to sell custom tickets right on their website. Since using Zeffy, they were able to raise $42,000 and save $2,100
Start your nonprofit for free with Zeffy
Whether you're a brand new nonprofit looking to get your fundraising up and running, or an established one looking for new tools and features to make even more impact, Zeffy is one of the best all-in-one solutions for all of your nonprofit needs.
From event tracking and management to marketing and engagement tools, custom donation forms, and even the ability to create an online shop or nonprofit membership association, Zeffy offers everything you need without charging a single fee.
Plus, Zeffy now helps organizations become registered nonprofits — for free — from assembling documents to getting your 501(c) status.
The costs associated with starting a nonprofit in Indiana can vary, however common costs to be aware of include:
Incorporation fees: The filing fee for Articles of Incorporation typically ranges from $30 to $50, depending on the type of organization and whether you choose expedited processing.
Legal fees: Many organizations choose to seek legal assistance when incorporating a nonprofit to ensure compliance with state laws and IRS regulations which can cost anywhere from several hundred to a few thousand dollars.
IRS application fee: The application fee for Form 1023 is currently $600 for organizations with annual gross receipts of $50,000 or more, and $275 for organizations with annual gross receipts of less than $50,000. Form 1023-EZ has a lower fee of $275.
State filing fees: In addition to the incorporation fee, there are often other state filing fees associated with starting a nonprofit in Indiana.
You must assemble a board of at least three directors who will help guide your nonprofit through strategic decision-making. The board will also appoint a president, a secretary, a treasurer, and other officers.
Using volunteers: Leverage volunteers for administrative, fundraising, or program work, to reduce the need for paid staff.
Seeking out in-kind donations and grants: Ask for donations of goods and services from businesses, individuals, or other organizations to support your nonprofit's activities (think office space or equipment). And, research grant opportunities to generate free financial support for your nonprofit's mission.
Leveraging partnerships: Look for potential partners, such as other nonprofits or community organizations, who might want to collaborate on shared goals.
Taking advantage of free tools and platforms: Be sure to use fundraising and donor engagement tools that are completely free to use, like Zeffy. That way, you'll never have to worry about hidden fees and can get started making an impact right away — without paying a cent.
The only 100% free fundraising platform for nonprofits
How to Start a Nonprofit Organization with No Money in 6 Steps
Is it possible to start a nonprofit organization for free? Explore our complete 2024 guide to discover our best tips to launch your charity on a budget.
