How Much Does It Cost to Start a Nonprofit

Undoubtedly, nonprofit organizations are one of the effective ways to make a difference in communities, societies and help people who are in need. Despite the passion and hard work, you need a solid plan and some capital to kick-start a nonprofit. Just like any other business, starting a nonprofit organization is also a complicated process, but with proper estimation and financial planning, you can gradually make it a success. 

The most common question that comes to your mind is ‘How much does it cost to start a nonprofit’? Well, there is no fixed answer to it as it depends upon your state and type of organization. Although for every nonprofit organization, some concrete costs are required at the start, the founder or community members should have a standard amount to initiate the process smoothly. 

To help you out; here we’ve put together a guide to give you an idea of the basic cost of starting a nonprofit.

What are Incorporation Costs?

Every state has its own regulations, process, and fees for incorporation. First things first, all nonprofit organizations should be registered at the state level to operate and function easily. 

Business Registration

As per your state regulations and guidelines, it is necessary to obtain a business license or register your business in order to operate legally. For business registration, you need to follow local government rules to make your nonprofit a seamless process. 

Charitable Registration

For charitable registration, you need to register your organization as a charity within your state to run money-raising programs. The fees differ from state to state, as some states charge hundreds of dollars and some do it for free of cost. You can follow the state’s website to know about the charges and process for your state. 

Articles of Incorporation

Articles of Incorporation is a formal charter document that is required to be filed for every nonprofit organization. The fee ranges between $10 -$1100.

Hiring a Legal Counsel

Most of the founders and community members hire an attorney to handle their Articles of Incorporation, and an IRS application which adds an extra cost between $2000 to $5000 on incorporation costs to the process. You can also get online assistance for $100 to $1000. However, hiring a legal counsel isn’t a necessary step but messing up legal paperwork isn’t the right approach to start a nonprofit.

What are IRS Costs?

When you’re filing with the IRS (501(c)(3)), then you can opt for two options; form 1023 – which costs around $600 and second is form 1023 EZ which costs around $275. This is the most essential and complex part where tons of paperwork is required to get the license. 

Operational & Administrative costs

Apart from your state and IRS filing fees, your nonprofit needs operational and administrative costs to handle day-to-day business needs. 

Office Floor Plan

The cost of renting or leasing a standard office in a good locality will be around $150,000 and a minimum of $500 for remodeling your workplace. 

Inventory Costs

The start-up inventory like printing and stationery will be around $2,500.

Accounting Services and Employee Salaries

To run a nonprofit for the first three months will be around $60,000.


The general insurance coverage will be around $ 2,400. It includes basic liability, workers’ compensation, and property casualty. 

Website Creation 

Having a good interface website is another vital factor for nonprofit beginners. Website is a launchpad for any business to interact with the people and community. Moreover, the majority of the US population relies on the internet to find out any kind of information. Hence, ease-to-use interface websites are a must for any organization or business.

Website creation should be done with professional help because it requires continuous updates and constant interaction with people in need. Hiring a web designer will cost around $2,000 and a web design agency will charge around $ 6000 to $ 8000 for the entire process. 

Marketing Costs

A good marketing strategy helps provide awareness and target potential audiences, volunteers, and donors. Marketing is the fastest way to inform the community and convince your audience to donate money without getting anything in return. There are dozens of ways to promote your nonprofit such as advertisements, social media, websites, blogs, newsletters, flyers, etc. 

This method can cost between $2000 to $5000. However, each method has its variation for costing and this is just a minimum estimation for your nonprofit. 

In the above post, we have shared the basic idea of cost for a nonprofit organization. Despite hard work, patience, commitment, and passion, you need proper budget planning for each category to run and handle the nonprofit, especially at the start. Please keep in mind the above-mentioned estimation of price might be different than the actual cost as it varies from state to state. 

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