Quick Answer
To start a charity in the United States, choose a specific cause and write a mission statement, research existing nonprofits, incorporate at the state level, recruit a board (three or more independent members is the standard), adopt bylaws and a conflict-of-interest policy, get a free EIN from the IRS, apply for 501(c)(3) status with Form 1023 ($600) or the streamlined Form 1023-EZ ($275, for organizations expecting under $50,000 a year), register with your state before you fundraise, open a dedicated bank account, then build your fundraising plan and online presence before you launch. Budget about $300 to $800 in fees and two to six months from incorporation to IRS approval.
Starting a charity feels overwhelming. The paperwork, the legal jargon, the fear of getting something wrong stops many good people before they begin.
It does not have to be that way. This guide breaks the process into nine clear steps you can follow, even with zero nonprofit experience. It is written for the United States; if you are outside the US, the legal steps differ, but the planning, board, finance and fundraising steps apply anywhere.
Darul Infaq began exactly this way, as a small group of volunteers in California who wanted to help families in need and had to work out incorporation, IRS approval and fundraising from scratch. You can read the story of how Darul Infaq started; the lessons below are the ones we wish we had known on day one.
Table of Contents
Step 1: How Do You Choose a Cause and Define Your Mission?
Start with a problem you genuinely care about. Passion keeps you going when funding gets tight.
Then narrow it down. “Helping people” is too broad. “Providing monthly groceries to low-income families in Orange County” is specific and fundable.
Write a mission statement in one or two sentences. It should explain who you help, how you help them, and why it matters. This becomes the anchor for every decision you make, and the IRS will ask for it on your application. If your motivation is faith-based, our guide to the importance of charity in Islam explores how that purpose shapes a mission.
Step 2: Why Should You Research Existing Charities First?
Before you build, look around. More than 1.5 million nonprofits are registered in the US, and some may already do your work well.
Search databases such as Candid (formerly GuideStar), Charity Navigator and the IRS Tax Exempt Organization Search. Check whether organizations in your space have gaps you could fill: a neighbourhood they do not serve, a community they do not reach, a need they do not cover.
If a similar charity exists, consider partnering or volunteering with it instead of competing. You will save time, avoid duplicating overhead, and reach more people faster. Starting a new charity makes sense when there is a real gap and you have the capacity to fill it.
Step 3: What Legal Structure Should Your Charity Use?
In the United States, most charities are nonprofit corporations that hold 501(c)(3) tax-exempt status from the Internal Revenue Service. That status exempts the organization from federal income tax and lets donors deduct their gifts, and it is what most foundations and grant-makers require. The Wikipedia entry on 501(c)(3) organizations gives a neutral overview of the rules.
Within 501(c)(3), the IRS classifies organizations as either public charities, which raise money from the general public, or private foundations, which are usually funded by one family or company. Almost every community charity is a public charity.
Other structures exist: charitable trusts, unincorporated associations, and fiscal sponsorship (operating under an existing 501(c)(3) while you test your idea). Fiscal sponsorship is worth considering if you want to start serving people immediately and decide later whether to incorporate.
Choose a nonprofit corporation with 501(c)(3) status if you plan to raise money publicly and want donors to claim deductions. Consult a nonprofit attorney if your situation is complex, for example if you will operate internationally or run a business alongside the charity.
Step 4: How Do You Register Your Charity with the Government?
There are four registrations, in this order.
1. Incorporate at the state level. File Articles of Incorporation with your Secretary of State. The IRS requires specific language in the articles: a charitable purpose clause and a dissolution clause stating that assets go to another 501(c)(3) if the organization closes. Use your state’s nonprofit template or have an attorney check it. Fees typically run $30 to $125.
2. Hold your first board meeting and adopt bylaws. Bylaws set out how the board is elected, how meetings run and how decisions are made. Adopt a conflict-of-interest policy at the same meeting; the IRS asks about it on Form 1023.
3. Get an Employer Identification Number (EIN). Apply online at irs.gov. It is free and takes minutes. You need it to open a bank account and to file Form 1023.
4. Apply for 501(c)(3) status. File electronically through Pay.gov:
| Form 1023 | Form 1023-EZ | |
| Who can use it | Any organization | Organizations expecting gross receipts of $50,000 or less in each of the first three years and with total assets under $250,000; some types (schools, hospitals, churches, private operating foundations) are excluded |
| Length | About 40 pages plus attachments (articles, bylaws, financial projections, narrative) | 3 pages, no attachments; you attest that your documents meet the requirements |
| User fee | $600 | $275 |
| Typical processing time | 3 to 6 months, sometimes longer | 2 to 4 weeks in many cases; the IRS’s own average has been longer |
| Best for | Charities expecting to grow, seek foundation grants or operate programs with paid staff | Small, volunteer-run charities |
A note on the EZ form: it is faster and cheaper, but IRS audits have found that a large share of organizations approved through it did not actually meet the requirements, and some had their status questioned later. If you are eligible and your activities are simple, use it; if you expect to grow or apply for foundation grants, the full Form 1023 produces a stronger determination letter.
File within 27 months of incorporation so that your tax exemption is backdated to your incorporation date.
5. Register with your state before you fundraise. This is the step most new founders miss. Around 40 states require a charity to register with the attorney general or secretary of state before soliciting donations from residents, and some require annual renewal. In California, for example, charities register with the Attorney General’s Registry of Charities and Fundraisers. Check your state’s rules, and if you will fundraise online from donors in several states, look into multi-state registration.
Step 5: Who Should Sit on Your Board of Directors?
State rules vary: some states allow a single director, others require three. Regardless of the minimum, the IRS expects a public charity to have at least three board members, the majority of whom are unrelated to each other and not paid by the organization. A board made up mostly of family members is a red flag to the IRS, to state regulators and to grant-makers.
Choose people with useful skills: finance, law, marketing, fundraising or community ties. Define expectations in writing (meetings per year, committee work, a personal giving or fundraising commitment) before you invite anyone.
A strong, independent board provides oversight, strategy and credibility. It is the single biggest factor in whether donors and funders trust a new charity. Publishing who they are, as Darul Infaq does on its team page, builds that trust further.
Step 6: How Do You Handle Banking and Accounting?
Open a dedicated bank account in your charity’s name as soon as you have your EIN and incorporation documents. Never mix personal and organizational money, even for a week.
Set up bookkeeping from day one. QuickBooks, Wave or Aplos (built for nonprofits) all work. Track every dollar in and out, keep receipts, and record restricted gifts (money given for a specific purpose) separately from general funds.
Accurate records protect your tax-exempt status. Every 501(c)(3) must file an annual return with the IRS:
| Annual gross receipts | Form to file |
| Normally $50,000 or less | Form 990-N (e-Postcard), a short online notice |
| Under $200,000 and total assets under $500,000 | Form 990-EZ |
| Larger organizations | Form 990 |
Missing the return for three consecutive years results in automatic revocation of tax-exempt status. Set a calendar reminder for the deadline (the 15th day of the fifth month after your fiscal year ends; 15 May for a calendar-year charity).
Plan for transparency from the start. Donors increasingly check a charity’s Form 990 and financial statements before giving; Darul Infaq publishes its financial reports, tax documents and annual reports for that reason, and our post on where donations go shows how to explain your allocation clearly.
Step 7: What Makes a Strong Fundraising Strategy?
Do not rely on one income source. Mix individual donations, monthly recurring gifts, grants, events and, where relevant, faith-based giving such as zakat and sadaqah, each of which has its own rules about who may receive it.
Start with your inner circle. Friends, family and colleagues almost always make the first donations, and their gifts prove to later donors that others already trust you.
Set a clear, specific fundraising goal tied to your mission. “Raise $10,000 to provide 200 families with a month of groceries” converts far better than “support our work”. Report back when you hit it; the report is your next appeal.
Recurring giving is the most valuable programme a small charity can build, because it turns one decision into twelve gifts a year. Our guide on how to raise money for charity covers campaign ideas and what has worked for us.
Remember Step 4: complete your state charitable solicitation registration before your first public appeal.
Step 8: How Do You Build an Online Presence?
Create a simple website that explains your mission, shows impact and makes donating easy. Add a clear “Donate” button on every page, accept card and digital-wallet payments, and offer a monthly option at checkout.
Publish your EIN, your 501(c)(3) status and your board on the site; donors look for them, and their absence costs you gifts.
Claim your social media handles early, even the platforms you will not use yet. Consistency across platforms builds recognition.
Tell stories, not just statistics. People give to individuals they can picture, not abstract causes. One family’s story with a photograph (with their permission) will outperform a page of numbers. Our post on why donation is important shows how to connect a gift to a person.
Step 9: How Do You Launch and Promote Your Charity?
Plan a launch moment: an event, a campaign or a founder’s story. Momentum matters most in your first weeks, when friends and local media are most willing to pay attention.
Reach out to local news outlets, community centres, places of worship and community groups. Ask supporters to share your message with their networks, and give them a ready-made post to share.
Focus your early promotion on one channel you can do well rather than spreading yourself thin across five. For most community charities that is a combination of email and one social platform where your supporters already are.
Your Next Step
Starting a charity takes patience, but the path is clear: pick your cause, handle the legal setup in the right order, build an independent board, keep clean books, and share your story with heart.
Take one step this week: write your mission statement or research the charities already working in your space. Small, consistent actions turn a good idea into real impact. And if you decide the best way to serve is to support an organization already doing the work, our guide on choosing the best charity to donate to will help you find one worth backing.
Calculated your zakat on gold? Pay it where it reaches those who qualify.
Give Your Zakat Now →Frequently Asked Questions
How much does it cost to start a charity?
Budget roughly $300 to $800 in government fees: state incorporation ($30 to $125 in most states), the IRS user fee ($275 for Form 1023-EZ or $600 for Form 1023), and state charitable registration fees ($0 to $100 or more depending on the state). Attorney fees, if you use one, add $500 to $3,000. The EIN is free.
How long does it take to start a charity?
State incorporation takes days to a few weeks. Form 1023-EZ approval often takes two to four weeks, though it can be longer; the full Form 1023 typically takes three to six months and sometimes more. Allow two to six months overall from incorporation to IRS determination letter, and file within 27 months of incorporation so that your exemption is backdated.
Can one person start a charity?
One person can found a charity and do most of the setup, but the organization cannot be run by one person. Some states allow a single director, but the IRS expects a public charity to have at least three unrelated board members, and grant-makers and state regulators look for the same.
Do I need to register in my state before fundraising?
In most states, yes. Around 40 states require charities to register with the attorney general or secretary of state before soliciting donations, and many require annual renewal. Check your state’s rules before your first appeal, especially if you will raise money online from donors in other states.
What is the difference between a nonprofit and a charity?
All charities are nonprofits, but not all nonprofits are charities. “Nonprofit” describes any organization that does not distribute profits to owners; it includes trade associations, social clubs and political groups. A charity is a nonprofit organized for charitable, religious, educational or similar purposes and recognized under section 501(c)(3), which is what allows donors to deduct their gifts.
Can a charity accept zakat?
Only if it distributes the funds to people in the eight categories the Quran names as eligible, and keeps zakat separate from general funds. A charity that wants to accept zakat should publish a zakat policy explaining how it verifies recipients. Our guide to the differences between Zakah and Sadaqah explains the rules.
