How to Start a Nonprofit in Arizona

Are you looking to start a nonprofit in Arizona? You’ve come to the right place. Known for its vibrant community and rich culture, Arizona (often referred to as The Grand Canyon State) is an ideal location for establishing a nonprofit organization. Unlike for-profit businesses, nonprofits focus on addressing pressing social issues and require a strong foundation, thorough research, and a clear mission targeting a specific community problem.

Embarking on the journey of creating a nonprofit entails various crucial steps, such as obtaining 501(c)(3) status. A 501(c)(3) organization is designed for charitable, religious, educational purposes, and more, qualifying it for federal and state tax exemptions.

In the spirit of Arizona’s motto, “God enriches (Ditat Deus),” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Arizona. Keep in mind that the steps discussed here are general guidelines, and modifications may be necessary depending on your specific circumstances. To gain a deep understanding of how to start a nonprofit in Arizona, we encourage you to read this article in its entirety.

What is a Nonprofit in Arizona?

Nonprofit organizations are legal entities that operate to serve public benefits and address community issues. Unlike for-profit organizations, nonprofits do not aim to generate any profit. The Internal Revenue Service (IRS) generally exempts nonprofit organizations from tax. However, based on the business entity structure, you will receive tax exemptions as a nonprofit.

In Arizona, ensure you have a community issue to address before you start forming your nonprofit. It can generally be education, religion, charity, social service, or other social issues. Nonprofits do not pay taxes on the money they receive through fundraising programs, donations, or any charitable funding.

Types of Nonprofits in Arizona

The first thing one has to decide is what type of nonprofit structure one wants. There are several types of nonprofits one can start. Here is a list of nonprofit types one can choose from-

1. Nonprofit LLC
2. Nonprofit Corporation
3. Unincorporated Nonprofit

Forming an LLC in Arizona for your nonprofit can be a smooth option. However, having a corporation is less complex than having a nonprofit LLC. Hence, it is wise to start a nonprofit corporation instead of an unincorporated nonprofit or nonprofit LLC.

– LLCBuddy Editorial Team.

Technically, starting a corporation for your nonprofit protects your personal assets but also is eligible for Federal and State tax exemptions. When you form an LLC for your nonprofit, it only protects your personal assets but does not give you any tax exemptions. On the other hand, a nonprofit Corporation has both corporation and limited liability company benefits. You can also have an unincorporated structure where you don’t have to register it. Unincorporated nonprofits in Arizona might be eligible for tax exemptions (check with Arizona Department of Revenue), but this type of organization does not get to enjoy limited liability and personal asset protection.

How to Start a Nonprofit Corporation in Arizona

Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Statutory Agent, obtain tax IDs, insurance, and a bank account – these are important steps you must follow. The steps mentioned here are general business formation steps. State-wise, some steps can be different. Getting an expert consultation before you start your nonprofit corporation formation is recommended. Here are the steps explained below-

Step 1: Get a Suitable Name for Your Arizona Nonprofit Corp

The first step is to name your nonprofit corporation. You must be sure that the name is available and that no other organization is using this name. You can check the Arizona LLC name search to find the best suitable name for your organization. You must follow those rules to avoid any legal issues later. You can reserve the name for 120 days for any domestic entity (such as a nonprofit LLC) if you’re not forming the nonprofit immediately.

Step 2: Appoint the Initial Board of Directors

The next step is to get your nonprofit’s initial board of directors. It is very important when you are setting up a nonprofit corporation. You need at least One unrelated directors to start the organization. If you don’t choose a minimum of One directors, it will automatically become a member-managed corporation.

Step 3: Appoint Your Arizona Statutory Agent

The third step is to get a Arizona Statutory Agent for your nonprofit corporation. The Statutory Agent is a person who receives all the legal documents on your behalf. It is necessary to get a registered agent. He/she must be above 18 years old and have a physical address in Arizona.

Step 4: Write Arizona Nonprofit Bylaws

The next important step is to write the company bylaws. The directors and board members must decide how the meetings, elections, voting, and other corporate activities will be held. These bylaws must comply with the Arizona state law. It is similar to an LLC operating agreement in Arizona for the LLC owners.

Step 5: File the Arizona Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the Arizona Secretary of State. You can do it through two ways, in-person and by mail. All the formation forms, such as the Arizona LLC Articles of Organization form, the Arizona Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Arizona SOS official website. Submit the details of your nonprofit corporation, like the name of the nonprofit, address, name and address of the registered agent, operation dates, directors’ details, and more information related to your company. You can send the form (for offline filing) and the filing fee of $60 for filing in-person and by mail to the Arizona Corporation Commission, Corporate Filings Section, 1300 W. Washington St., Phoenix, AZ 85007 or upload it online (if available).

Step 6: Obtain Tax ID for Your Arizona Nonprofit Corporation

The subsequent step involves obtaining a Tax ID for your nonprofit corporation. You will need to acquire an Employer Identification Number (EIN) from the official IRS website. To obtain the EIN, submit your application to the IRS office either by mail or through their online platform. There is no associated cost for this process.

Step 7: Get Business Licenses in Arizona

The next step is to get the business licenses you need to run your nonprofit organization in Arizona. Check with the local government office if any special licenses you need to run your nonprofit. You can file your nonprofit as a charity if you want.

Step 8: Federal Tax Exemption

You must submit Form 1023 to the IRS to file for federal tax exemption. This form, titled “Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,” is required for all nonprofit corporations. Smaller nonprofits have the option to file Form 1023-EZ instead. You will be prompted to provide details about your organization upon obtaining the relevant form. Complete the form with the necessary information and submit it. The filing fees are $600 for Form 1023 and $275 for Form 1023-EZ.

Step 9: State Tax Exemption

Once you get the Federal Tax Exempt, it is time for State Tax Exempt. In Arizona, you must apply for the tax exemption to Arizona Department of Revenue. Get the form, fill it up with the correct details, and send it to the office. You may need to pay a fee along with the form and supportive documents to apply for the State Tax Exemption. You need TPT Exemption Certificate to apply for the state tax exemption. Read Arizona classification of taxes to learn more about the Arizona tax structure.

Step 10: Get Insurance for Your Arizona Nonprofit

Once you start your nonprofit, you must get insurance to protect your organization. You must get workers’ compensation and unemployment insurance if you have employees. Based on your nonprofit structure, you might need general liability insurance, property, vehicle, auto insurance, etc. You can contact the insurance providers to learn more about which are required for your organization. Also, you can contact Arizona Department of Insurance for more information.

After Forming Your Arizona Nonprofit Corporation

Once your nonprofit is formed, there are additional steps to complete:

• Get a Business Bank Account: You must get a business account for all types of business-related transactions in Arizona. You may need different documents based on the bank and place of business. Check with the bank for it.
• File Nonprofit as Charity: This is optional. Your nonprofit is either for charity purposes or any purpose that meets your community’s needs. If your organization is for charity purposes, then you can file your nonprofit as a charity to enjoy tax exemptions.
• Other Business Compliances: You may need additional compliances based on your nonprofit type. Check with your attorney or local authority for more information.

Names of Nonprofit Corporations in Arizona

Following are some of the Nonprofit Organizations in Arizona. The contact information of these organizations can be found on Arizona SOS official websites.

• Lura Turner Homes INC.
• AZ ACEs Consortium
• Grand Canyon Institute
• Handi-Dogs Inc.
• Free Arts for Abused Children of Arizona
• Desert Star Institute for Family Planning Inc
• Cook Native American Ministries Foundation
• Circle the City

FAQs

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Why Arizona Nonprofit Corporation is So Important

One of the main reasons why Arizona nonprofit corporations are so vital is because they address critical social issues that are often overlooked by government agencies and for-profit businesses. These organizations are on the front lines of battling poverty, hunger, homelessness, and other pressing challenges facing our communities. They provide a safety net for those most vulnerable and work tirelessly to advocate for systemic change that will benefit everyone.

Additionally, nonprofit corporations in Arizona contribute significantly to our economy. Through their charitable activities and social programs, they stimulate local economic development and create job opportunities for Arizonans. By supporting these organizations, we not only enhance the overall quality of life for our residents but also boost our state’s economic prosperity.

Furthermore, Arizona nonprofit corporations are dedicated to serving the diverse needs of our population. They cater to a wide range of issues, including education, healthcare, environmental conservation, animal welfare, and much more. By offering specialized services and programs, these organizations ensure that every individual, regardless of background or circumstance, has access to the resources they require to thrive.

Moreover, nonprofit corporations in Arizona play a critical role in fostering community engagement and civic participation. They provide a platform for concerned citizens to get involved and make a positive impact on the world around them. By volunteering, donating, or simply spreading awareness about important causes, individuals can contribute to the betterment of society and create lasting change for future generations.

In essence, Arizona nonprofit corporations embody the spirit of compassion, solidarity, and social responsibility that defines our state. They represent the best of what we can achieve when we come together to support one another and build a more just and equitable society. Their tireless efforts and unwavering dedication to serving others inspire us all to be more empathetic, more generous, and more engaged citizens.

As we celebrate the invaluable contributions of Arizona nonprofit corporations, it is crucial that we continue to support and uplift these organizations. By recognizing their vital role in our communities and acknowledging the incredible impact they have on the lives of countless individuals, we can ensure that they continue to thrive and make a difference for years to come.

Ultimately, Arizona nonprofit corporations are the heart and soul of our state. They exemplify the values of compassion, inclusivity, and social justice that define who we are as a community. As we stand together in solidarity with these organizations, we affirm our commitment to building a brighter and more compassionate future for all Arizonans.

Conclusion

Starting a nonprofit corporation in Arizona is an incredible way to give back to your community and positively impact the causes that matter most to you. By forming a nonprofit, you can provide essential services, promote awareness, and make a lasting difference in the lives of those who need it most. In Arizona, a lot of nonprofit organizations are there to cater to people in need. Starting a nonprofit corporation is better than an LLC, as it provides limited liability and tax benefits. It helps you save taxes. If you want to start a nonprofit in Arizona, you must follow the steps mentioned above in the article.