How to Start a Nonprofit in Rhode Island


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

All Posts by Steve Goldstein →
Business Formation Expert  |   Fact Checked by Editorial Staff
Last updated: 
LLCBuddy™ offers informative content for educational purposes only, not as a substitute for professional legal or tax advice. We may earn commissions if you use the services we recommend on this site.
At LLCBuddy, we don't just offer information; we provide a curated experience backed by extensive research and expertise. Led by Steve Goldstein, a seasoned expert in the LLC formation sector, our platform is built on years of hands-on experience and a deep understanding of the nuances involved in establishing and running an LLC. We've navigated the intricacies of the industry, sifted through the complexities, and packaged our knowledge into a comprehensive, user-friendly guide. Our commitment is to empower you with reliable, up-to-date, and actionable insights, ensuring you make informed decisions. With LLCBuddy, you're not just getting a tutorial; you're gaining a trustworthy partner for your entrepreneurial journey.
Start a Nonprofit in Rhode Island

Are you looking to start a nonprofit in Rhode Island? You’ve come to the right place. Known for its vibrant community and rich culture, Rhode Island (often referred to as The Ocean 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 Rhode Island’s motto, “Hope,” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Rhode Island. 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 Rhode Island, we encourage you to read this article in its entirety.

What is a Nonprofit in Rhode Island?

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 Rhode Island, 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 Rhode Island

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 Rhode Island 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 Rhode Island might be eligible for tax exemptions (check with Rhode Island Division of Taxation), but this type of organization does not get to enjoy limited liability and personal asset protection.

How to Start a Nonprofit Corporation in Rhode Island

Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Resident 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 Rhode Island 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 Rhode Island 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 Three unrelated directors to start the organization. If you don’t choose a minimum of Three directors, it will automatically become a member-managed corporation.

Step 3: Appoint Your Rhode Island Resident Agent

The third step is to get a Rhode Island Resident Agent for your nonprofit corporation. The Resident 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 Rhode Island.

Step 4: Write Rhode Island 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 Rhode Island state law. It is similar to an LLC operating agreement in Rhode Island for the LLC owners.

Step 5: File the Rhode Island Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the Rhode Island Secretary of State. You can do it through three methods that are online, by mail and in-person. All the formation forms, such as the Rhode Island LLC Articles of Organization form, the Rhode Island Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Rhode Island 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 $230 for online, by mail filing or in person filing. to the Division of Business Services, 148 W. River Street, Providence, RI 02904 or upload it online (if available).

Step 6: Obtain Tax ID for Your Rhode Island 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 Rhode Island

The next step is to get the business licenses you need to run your nonprofit organization in Rhode Island. 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 Rhode Island, you must apply for the tax exemption to Rhode Island Division of Taxation. 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 EXO-SUE Form to apply for the state tax exemption. Read Rhode Island classification of taxes to learn more about the Rhode Island tax structure.

Step 10: Get Insurance for Your Rhode Island 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 Rhode Island Department of Business Regulation, Insurance Division for more information.

After Forming Your Rhode Island 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 Rhode Island. 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 Rhode Island

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

  • Plan International USA Inc.
  • National LGBT Cancer Network Inc.
  • Dysautonomia Support Network
  • Ronald Mcdonald House Charities Of New England Inc
  • New Urban Arts
  • Gbarnga Lutheran Mission Project Inc
  • Hunter Seven Foundation
  • Esperanza-Hope.

FAQs

What is required to start a nonprofit in Rhode Island?
To start a nonprofit in Rhode Island, you must register with the Rhode Island Secretary of State, submit an application for tax-exempt status with the IRS, complete a corporate filing and obtain a Rhode Island business ID number.
What types of nonprofits are recognized by Rhode Island law?
Rhode Island recognizes public charities, private foundations, and other types of nonprofit corporations, such as mutual benefit corporations and unincorporated associations.
What are the requirements to maintain nonprofit status in Rhode Island?
To maintain nonprofit status in Rhode Island, an organization must comply with the state’s nonprofit statutes, file annual reports and financial statements, hold regular meetings of its board of directors, and maintain an exempt status with the IRS.
Is there a fee associated with forming a nonprofit in Rhode Island?
Yes, there is a filing fee associated with forming a nonprofit in Rhode Island. The fee varies depending on the type of organization and the services requested.
What types of organizations are subject to sales tax in Rhode Island?
Generally, nonprofits in Rhode Island are exempt from sales tax. However, there are certain organizations, such as for-profit entities, that may be subject to sales tax.
Does Rhode Island require nonprofits to have a local address?
Yes, all nonprofits in Rhode Island must have a local address. This address must be used for all official business and communications.
How long does it take to form a nonprofit in Rhode Island?
The formation process usually takes between 4-6 weeks. This timeline can be decreased or extended depending on the services requested.
What types of documents are required to form a nonprofit in Rhode Island?
Documents required for the formation of a nonprofit in Rhode Island include the Articles of Incorporation, a Certificate of Incorporation, a Certificate of Good Standing, a copy of the IRS letter of determination, and a copy of the Bylaws.
Does a nonprofit in Rhode Island have to have a board of directors?
Yes, all nonprofits in Rhode Island must have a board of directors. The board must be composed of at least three members and meet at least once a year.
Does Rhode Island require nonprofits to file an annual report?
Yes, all nonprofits in Rhode Island must file an annual report with the Secretary of State’s office. The report must include the organization’s financial statements, a list of activities, and an explanation of how the organization is meeting its charitable purpose.
Is there an annual fee associated with maintaining a nonprofit in Rhode Island?
Yes, there is an annual fee associated with maintaining a nonprofit in Rhode Island. The fee is based on the size and type of organization.
Does Rhode Island require nonprofits to submit a budget to the Secretary of State?
Yes, all nonprofits in Rhode Island must submit a budget to the Secretary of State. The budget must include estimated revenues and expenditures for the upcoming year.
Does Rhode Island require nonprofits to hold an annual meeting?
Yes, all nonprofits in Rhode Island must hold an annual meeting of its board of directors. The meeting must be held within six months of the end of the organization’s fiscal year.
Does Rhode Island require nonprofits to submit an audit?
No, Rhode Island does not require nonprofits to submit an audit. However, organizations with total assets exceeding $500,000 must submit an audit to the Secretary of State’s office.
Does Rhode Island require nonprofits to file tax returns?
Yes, all nonprofits in Rhode Island must file tax returns with the state. The required forms vary depending on the type of organization and the amount of revenue generated.
What types of activities can a nonprofit in Rhode Island engage in?
A nonprofit in Rhode Island can engage in any type of charitable, educational, or scientific activity that is consistent with its mission and purpose.
Does Rhode Island have any special rules for fundraising activities?
Yes, all fundraising activities in Rhode Island must be conducted in accordance with state and federal laws. Organizations must obtain a permit from the Secretary of State’s office before conducting any fundraisers.
Does Rhode Island have a “solicitation of charitable funds” law?
Yes, Rhode Island has a “solicitation of charitable funds” law. This law requires organizations to register with the state prior to soliciting funds from the public.
Does Rhode Island require nonprofits to obtain liability insurance?
No, Rhode Island does not require nonprofits to obtain liability insurance. However, it is generally recommended that organizations carry insurance to protect against potential claims and liabilities.
Does Rhode Island require nonprofits to have a written conflict of interest policy?
Yes, all nonprofits in Rhode Island must have a written conflict of interest policy. This policy should be reviewed and approved by the board of directors on an annual basis.
Does Rhode Island require nonprofits to have a written document retention policy?
Yes, all nonprofits in Rhode Island must have a written document retention policy. This policy should specify how long documents should be retained and by whom.
Does Rhode Island have any special rules for compensation of nonprofit employees?
Yes, all compensation of nonprofit employees in Rhode Island must be reasonable and commensurate with the services provided. Additionally, compensation must be approved by the board of directors.
Does Rhode Island have any special rules for nonprofit investments?
Yes, all investments by nonprofits in Rhode Island must be prudent and consistent with the organization’s mission and purpose. Additionally, investments must be approved by the board of directors.
Does Rhode Island require nonprofits to submit a copy of its IRS determination letter?
Yes, all nonprofits in Rhode Island must submit a copy of its IRS determination letter to the Secretary of State’s office. This letter must be resubmitted every three years or when the organization’s tax-exempt status changes.
Does Rhode Island require nonprofits to obtain a corporate seal?
No, Rhode Island does not require nonprofits to obtain a corporate seal. However, organizations may find it helpful to have one on hand for official documents.
Does Rhode Island have any special rules for lobbying activities?
Yes, all lobbying activities in Rhode Island must comply with state and federal laws. Organizations must register with the Secretary of State’s office before engaging in any lobbying activities.
Does Rhode Island require nonprofits to submit an annual financial review?
No, Rhode Island does not require nonprofits to submit an annual financial review. However, organizations may choose to do so in order to ensure accurate financial records and reporting.
Does Rhode Island require nonprofits to submit a copy of its bylaws?
Yes, all nonprofits in Rhode Island must submit a copy of its bylaws to the Secretary of State’s office. The bylaws must be updated whenever there is a change in the organization’s structure or operations.
Does Rhode Island require nonprofits to abide by the Uniform Prudent Management of Institutional Funds Act?
Yes, all nonprofits in Rhode Island must abide by the Uniform Prudent Management of Institutional Funds Act. This act requires organizations to properly manage and invest their funds.
Does Rhode Island have any special rules for charitable solicitations?
Yes, all charitable solicitations in Rhode Island must comply with state and federal laws. Additionally, organizations must register with the Secretary of State’s office prior to engaging in any solicitations.
Does Rhode Island require nonprofits to obtain a business license?
Yes, all nonprofits in Rhode Island must obtain a business license in order to operate legally. The license must be obtained from the city or town in which the organization is located.

Also Read

Why Rhode Island Nonprofit Corporation is So Important

One of the key reasons why nonprofit corporations are so important in Rhode Island is their ability to fill gaps in services and meet the needs of underserved communities. In a state where poverty rates are higher than the national average and access to quality healthcare and education can be limited, nonprofits play a critical role in providing crucial services to those who would otherwise go without. From food banks to homeless shelters to after-school programs, nonprofit organizations are on the front lines of addressing the most pressing needs of Rhode Island residents.

Nonprofit corporations in Rhode Island also play a vital role in preserving the state’s rich cultural heritage and supporting the arts. The state has a thriving arts community, with organizations ranging from community theaters to dance companies to museums and galleries. Nonprofit arts organizations play a crucial role in promoting creativity and self-expression, enriching the lives of residents, and contributing to the state’s cultural identity.

Moreover, nonprofit corporations in Rhode Island are essential for environmental conservation and preservation efforts. The state is home to a diverse range of ecosystems, from coastal wetlands to forests to urban green spaces. Nonprofit organizations dedicated to environmental conservation work tirelessly to protect these natural resources, advocating for policies that promote sustainability and engaging in hands-on conservation efforts to preserve Rhode Island’s natural beauty for future generations.

Another key reason why nonprofit corporations are so important in Rhode Island is their ability to mobilize community support and engage residents in meaningful social change. Nonprofit organizations often serve as a platform for civic engagement, providing opportunities for residents to get involved in causes they care about and make a difference in their communities. Through advocacy, education, and direct service provision, nonprofits in Rhode Island empower residents to take action and create positive change.

As a hub of innovation and collaboration, Rhode Island benefits greatly from the presence of a robust nonprofit sector. Nonprofit corporations in the state are often at the forefront of developing creative solutions to complex social problems, working in partnership with government agencies, businesses, and community members to drive positive change. Whether through pilot programs that test new approaches to addressing poverty or cross-sector partnerships that leverage resources for maximum impact, nonprofits in Rhode Island are driving progress and innovation in a wide range of fields.

Overall, the role of nonprofit corporations in Rhode Island cannot be overstated. From meeting essential human needs to preserving cultural heritage to promoting environmental conservation to mobilizing community engagement, nonprofits in the state are at the heart of a thriving, vibrant civil society. By supporting and investing in nonprofit organizations, Rhode Islanders can help build a healthier, more resilient, and more equitable state for all.

Conclusion

Starting a nonprofit corporation in Rhode Island 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 Rhode Island, 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 Rhode Island, you must follow the steps mentioned above in the article.

Leave a Comment