how to start a 501c3 in florida

If you have a business mindset and a passion for creating programs or services that impact and change lives, starting a nonprofit organization in Florida might be a good option for you.

Nonprofit organizations are generally formed for charitable, religious, literary, educational, or scientific purposes.

This type of business is also called a 501(c)3 and is eligible for federal and state tax exemptions. 

If you are thinking about starting a nonprofit in Florida, you should talk to a business lawyer to ensure you are complying with all of the requirements. 

Considerations Before Starting a Nonprofit in Florida

There are a lot of factors to consider before you start looking into how to start a nonprofit in Florida. Though you may be passionate about your idea, it is important to look around at what is already being done in your community to determine if there is a need.

In some cases, you may be able to use your skillset to improve an existing Florida nonprofit. You do not want to be competing against a nonprofit that’s trying to achieve your same goal. 

It is important to formulate a mission statement for your nonprofit. This helps guide your purpose above all else and can help you determine the growth of the organization.

Along this same line of thinking, you should have a clear “elevator pitch” for what your nonprofit will do. When starting a nonprofit organization in Florida, you should be able to concisely articulate the purpose and benefits of the organization.

Not only will this help you when you start a nonprofit in Florida, but it will also help you attract support. 

501(c)3 Florida Statistics

According to a 2020 report from the Florida Nonprofit Alliance, the state is home to 4.5 nonprofits for every 1,000 residents. That may seem like a large number, but this places Florida 47th in the nation for nonprofits.

The top states have just over seven nonprofits for every 1,000 residents.

  • There are over 94,700 nonprofit organizations in Florida;
  • Nonprofits in Florida directly employed more than 62,000 people in 2020;
  • Employees in nonprofit organizations account for 6.5% of the Florida workforce;
  • Florida nonprofits generate nearly $105 billion in annual revenue;
  • Nationally, Florida ranks 39th in nonprofit assets per capita; and
  • Florida ranks 50th in volunteers for nonprofits. 

Nonprofits are important because of their various contributions toward health, education, human services, and other charitable efforts. But they also make a significant contribution to the overall economy. 

How to Start a Nonprofit in Florida 

Unfortunately, it takes more than having a passion for your cause to start a nonprofit in Florida. There are a number of steps and procedural requirements you must fulfill before you can function as a valid nonprofit organization. 

Form a Florida Nonprofit Corporation

To start a nonprofit organization in Florida, you must file non-profit articles of incorporation with the Florida Department of State Division of Corporations, either by mail or online.

The articles must include a series of detailed information about the nonprofit organization and its purpose. 

Choose a Name for Your Nonprofit

There are a couple of things to take into consideration when naming your Florida nonprofit. The name must be distinguishable on the records of the Department of State in such a way that it cannot be confused with another business.

Stylistic spelling or punctuation is not an acceptable differentiator.

It is a good idea to conduct a preliminary search of state records to ensure that your nonprofit name is unique. The name must include the words corporation, incorporated, corp., or inc. 

Appoint a Registered Agent in Florida

Whether you have a for-profit or nonprofit corporation in Florida, every corporation must have a registered agent for service of process. This is a representative corporation or individual who accepts all legal papers on behalf of the nonprofit corporation if there is a legal dispute.

Create Bylaws for Your Nonprofit

A Florida nonprofit corporation is not required to create and abide by corporate bylaws, though they are recommended. This could be important to establishing legitimacy for potential donors and creditors.

These bylaws should establish the basic rules governing how you operate the nonprofit. 

Board of Directors Hold a Meeting

An organizational meeting is held once the board of directors is established.

This first meeting should focus on the procedural elements of the nonprofit by approving bylaws, appointing officers, and establishing accounting periods and methods of financial reporting. 

Obtain an Employer Identification Number (EIN)

All Florida nonprofits must obtain a federal employer identification number (EIN). As a nonprofit, you must follow all regulations when it comes to employees and tax identification.

You can obtain an EIN by completing an online application on the IRS website.

Obtain Relevant Florida Business Licenses

It is important to take into consideration the services or activities your Florida nonprofit organization conducts. If you are selling a product or service, you will need to look into a transactional business license.

Hosting events may require various permits or types of insurance. The nature of the nonprofit determines the need for additional business licenses.  

Comply with All Florida Registration and Reporting Requirements 

It is important to understand the contribution reporting requirements for your Florida nonprofit organization. According to the Florida Solicitation for Contributions Act, charitable organizations and fundraisers that solicit contributions cannot commingle charitable contributions with noncharitable funds. These funds should remain in separate accounts to avoid conflict. 

Any organization or individual who solicits donations from people in the state of Florida must register with the Florida Department of Agriculture and Consumer Services (FDACS) and renew annually.

Small charitable organizations can meet this registration requirement by filing online.  

Apply for Federal 501(c)3 Tax Exemptions

Starting a nonprofit organization in Florida does not automatically make your organization tax exempt. You will need to complete and file IRS Form 1023. This is the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. 

Having established bylaws and business structure documentation can make the process easier. Some of these details include the founding and purpose of the nonprofit, financial information, organizational structure, governing policies, operations of the organization, and more. 

Depending on the size of your Florida nonprofit organization, smaller nonprofits may be eligible to file Form 1023-EZ. This is a simplified version of the required IRS form which also falls under Section 501(c)(3) of the Internal Revenue Code.

Small nonprofits are eligible for this simpler form only if they have projected annual gross receipts of less than $50,000 and total assets of less than $250,000.

The Florida Department of Revenue processes nonprofit tax exemptions. There are several types of Florida taxes that may be relevant for your nonprofit. 

Florida corporate income tax

A Florida nonprofit corporation is automatically exempt from state income tax once approved as a 501(c)3. Unless the nonprofit entity has “unrelated trade or business income” for federal income tax purposes, a corporate tax return is not necessary. 

Sales and use tax

When you start a nonprofit in Florida, the organization is not automatically exempt from the sale and use taxes.

However, it is not difficult to qualify for the exemption as long as you have gone through the proper channels to become a 501(c)3. The Florida nonprofit will need to file an Application for a Consumer’s Certificate of Exemption (Form DR-5). 

Reemployment tax

Nonprofits are not exempt from paying reemployment (unemployment) taxes with the exception of churches and church schools. If a Florida 501(c)3 employs four or more workers in 20 different calendar weeks during the calendar year, they must pay this tax.

File a Nonprofit Annual Report 

This component comes after you have already determined how to start a nonprofit organization in Florida. It is important to understand the requirements to maintain your 501(c)3 status. Florida nonprofit corporations must file an annual report with the Department of State between January 1 and May 1 of every year. The report serves to confirm or update existing information about the organization. 

This first report is due the year following the calendar year in which the Florida nonprofit was formed. The filing is done online, and failing to file could result in losing your nonprofit’s 501(c)3 status. 

Hire an Attorney When Starting a Florida Nonprofit

Though it is possible to research and successfully determine how to start a nonprofit in Florida, there is a lot of work that needs to be done. It is important to follow Florida state laws carefully and navigate IRS rules and forms to ensure that you are forming your 501(c)3 correctly. 

Investing in help from an experienced attorney who specializes in nonprofit incorporation and the special tax and compliance requirements, could save you time and prevent costly mistakes.

An attorney will be able to provide meaningful advice on the initial selection of the board of director members, creation of procedures and bylaws, filing relevant formation and tax documents, account management, and compliance. 

A nonprofit is a type of business. Starting a business can be both exciting and stressful. The team at BrewerLong can help you avoid legal conflict and allow you to do what you are passionate about when starting a Florida nonprofit organization. Contact us today, and let us help you get your nonprofit organization started.

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Trevor Brewer

Primarily working with business owners and their families, Trevor advises clients on business structuring and sale transactions, regulatory compliance, third-party contracts, liability protection and general matters facing small business owners. His focus extends beyond legal advice and includes business strategy and wealth preservation. Trevor also works with families regarding their estate planning needs, including probate, trust administration, and wills.

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