Considering starting a nonprofit in Virginia? The most effective startup founders and boards follow these steps to establish their nonprofits.
What is a Nonprofit?
According to Cornell Law School’s Legal Information Institute, a nonprofit is “a group organized for purposes other than generating profit and in which no part of the organization’s income is distributed to its members, directors, or officers.” There are many types of nonprofits, including foundations, religious organizations, and public charities.
Steps to Start a Nonprofit in Virginia
Follow these steps to form a 501(c)(3) nonprofit in Virginia:
1. Name Your Organization
Select a name for your nonprofit that is on brand and representative of what your organization is all about. Be sure to follow Virginia’s naming requirements and search the State Corporation Commission Clerk’s Information System to ensure the name is not already in use by another organization. To reserve your name, file an Application for Reservation of Corporate Name Form SCC 631, which requires a $10 filing fee.
2. Recruit a Board of Directors
Next, recruit a board of directors to help govern your organization. Note that Virginia only requires one director. However, to qualify for tax-exempt status with the IRS, you will need at least three directors. These individuals must be unrelated and willing to serve a one-year term.
Consider the following when recruiting board members:
- Identify what your organization needs in a director, whether that’s industry knowledge, connections, or fundraising experience
- Look for diversity in backgrounds and skills
- Avoid conflicts of interest, such as selecting board members who have financial interests related to your nonprofit
3. Appoint a Registered Agent
Virginia mandates that each nonprofit registered within the state have an appointed registered agent. Whether an individual or a registered agent service, they must be located within the state and have an office that is open during regular business hours. The appointee will accept legal papers on the nonprofit’s behalf. You or one of your directors may fill this role.
4. Obtain Employer Identification Number (EIN)
Much like a Social Security Number, the Employer Identification Number (EIN) is a nine-digit number assigned by the IRS that acts as a numerical identifier for your nonprofit. This number becomes permanently associated with your nonprofit throughout its lifespan. To apply for an EIN, fill out form SS-4.
5. File Form 1023 for Federal Tax Exemption
To receive tax-exempt status, you’ll need to complete Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, which requires a $600 filing fee. If the IRS declares your nonprofit as tax-exempt, you will receive an IRS Determination Letter.
6. Hold Nonprofit Board Meeting
Another crucial step in establishing a nonprofit in Virginia is holding your first board of directors meeting. Use this meeting to draft your bylaws and adopt a conflict of interest policy. Make sure to record comprehensive meeting minutes to document all of the decisions and insights. To help you get started, use this nonprofit board meeting minutes template.
Understanding the Board of Directors' Role in a Nonprofit
Your board of directors helps govern your nonprofit, which includes the following duties:
- 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 guides the nonprofit from day one, so don’t delay on board member recruitment.
Getting Started with OnBoard
Seeing as a board is vital to the success of your nonprofit, you want to provide the right tools for your board of directors to function. OnBoard is a nonprofit board management software solution purpose built to help nonprofits manage their operations as seamlessly as possible. The platform ensures nonprofit meetings become more productive by supporting real-time collaboration, managing minutes, and automating administrative tasks. Our solution also thrives on its ease of use, allowing you to focus on running your nonprofit.
Want to learn what board management software can do for your organization? Start with our free board meeting agenda template.
Frequently Asked Questions
How Much Does it Cost to Start a Nonprofit in Virginia?
Virginia charges a $100 filing fee for the Articles of Incorporation.
Do Nonprofits Need a Business License in Virginia?
Nonprofits in Virginia may need business licenses depending on their location and activities. Confirm with the clerk in the city where your nonprofit’s primary office is located.
How Many Board Members are Required for a Nonprofit in Virginia?
The state only requires one board member, but you will need three board members to be considered tax-exempt.
About The Author
- Gina Guy is an implementation consultant who specializes in working with nonprofit organizations get the most from their board meetings. She loves helping customers ease their workloads through their use of OnBoard. A Purdue University graduate, Gina enjoys refinishing furniture, running, kayaking, and traveling in her spare time. She lives in Monticello, Indiana, with her husband.
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