One question I always get is how long does forming a nonprofit take? Fortunately, it’s actually a really quick process. However, there are some caveats.
The first stage of your nonprofit setup is the name search and formation. You should be able to complete the name search and drafting of the articles in an hour or less. However, the actual filing process is reliant on the North Carolina Secretary of State’s office. They process articles in the order they’re received, so you could get yours back in a day or a few weeks. It all depends on how busy they are.
I can promise that if you file your articles at the end of December, you’ll be waiting longer than the middle of July. They’re always super busy late December through mid January.
Your EIN application should take 5-10 minutes. It’s super quick. However, if there was ever a company with the same name in your state, you’ll get an error. The IRS website cannot handle these pseudo-duplicate names. Even if the prior company was dissolved, you’re facing a difficult process.
If you get this particular error, you have to send in a paper application. You can fax it in, but it is still going to take the IRS “4-8 weeks” to reply. Unfortunately, right now and around busier times, it actually takes them longer than 8 weeks.
Bylaws, Board Meeting, and Resolutions
The final stage of your nonprofit startup is the actual operations. In my experience, these take the longest. You need to appoint a board and then have the board all agree to your bylaws, resolutions, operating procedures, and even what time to meet. This is the people element. Hopefully you have a good group of people running your organization. If not, you could be looking at weeks to months to get everyone on the same page.
If you’re applying for 501c3 recognition, this is actually the longest step. Putting together the application can take as little as a day. However, the IRS will take 3-12 months to review the application and get back to you. Fortunately, once they do approve your application, the 501c3 recognition is retroactive to the date of filing. That helps with donors. However, the waiting game is never fun.
Speeding Things Up
There’s not a lot you can do to speed up this process. However, here are a few tips:
- Be super organized. If you keep everything organized, you won’t encounter delays caused by missing information or time spent redoing part of an application.
- Rush Processing. It might help slightly if you pay the extra $100 to rush your articles with the Secretary of State. Especially when they’re busy, this can be helpful. The rush processing means you’ll get your articles back within 24 hours.
- Keep Your Board Informed. Through every step, keep your board informed. That way, you won’t be slowed down by questions or concerns down the road. If your board isn’t aware of what you’re doing, they may not ratify your decisions during their first board meeting. In that event, you’d have to redo part of the formation process.
How Long Does Forming a Nonprofit Take?
All in all, the fastest you’ll set up your nonprofit is about a week. However, to be fully legally ready to go, you’re probably actually looking at a couple of months. You can always speed it up if you keep organized and stay on top of everything.
How long does forming a nonprofit take depends on how well you keep organized and on top of everything.