STEP 1) SECURE YOUR NON-PROFIT NAME

Choose a Business NameSecuring your non-profit’s name is a critical first step and there’s basically three things you need to know, for everything else please refer to the Iowa Non-Profit Act section 504.401 concerning corporate names.

  1. The name must be unique so be sure to conduct Business Entity Searches through the state.
  2. The name must be aligned with your purpose or mission statement.
  3. No formal corporate suffixes or their abbreviations are required in Iowa.

And finally, If needed, once you know your name is acceptable you can file an Application for Reservation of Name form for only $10 and keep it protected until it’s filed for the public record.

STEP 2) DESIGNATE A REGISTERED AGENT

Choose a Registered Agent

Forming a non-profit corporation requires a qualified Iowa Registered Agent to receive and help you officially process important documents, for example state-level paperwork or legal notices. Do keep in mind this agent must be an Iowa resident/citizen or authorized Iowa business entity with a physical street address that’s always available during regular M-F business hours.

In terms of pricing you can either hire on outside professional yourself and expect to pay up to $160/yr, or get a qualified registered agent for free when you incorporate your non-profit through IncFile or Incorporate.com.

STEP 3) SELECT INCORPORATORS & DIRECTORS

Choose the Initial DirectorsFirst of all Iowa only requires a single incorporator and initial director. The incorporator (there can be more than one) is going to be named as such, and while they won’t need to deliver any Articles to the state physically they will be a part of the founding of your non-profit. Your initial director will help oversee things until official directors are voted on in Step 7.

Bookmark the Iowa Principles & Practices for Non-Profit Excellence PDF because it has some of the finer details and links to more resources, but to be frank, working with an attorney or incorporation provider really comes in handy during this foundational step because there are definitely corporate formalities to learn.

STEP 4) DRAFT NON-PROFIT BYLAWS

Register an LLC

Your bylaws define your non-profit – structure, management, and governance. Common non-profit bylaws include:

  • Detailed info on principle and registered agent offices.
  • Management, procedures, and responsibilities of the board.
  • Details on each office – Pres., Secretary, Treasurer, etc.
  • How to go about Adding/Amending bylaws,
  • How to handle other corporate/non-profit formalities required in Iowa.

To get started, check out this savvy Corporate Bylaws Template with an example that you can customize yourself and get an idea for what they look and sound like. These will be voted on and adopted or amended in your initial meeting in Step 7.

STEP 5) FILE ARTICLES OF INCORPORATION

Business LicensesIowa doesn’t currently offer an Articles of Incorporation form or template you can fill out, print and submit by mail. Instead it’s much more efficient to file through their Business Entity Filings process online. Also, be sure to read through Section 504.502 in the statutes to get all the very specific information on what’s entailed and required.

Once you file you’ll receive a Certificate of Acknowledgment from the state which should promptly be added to your records book which we’re going to discuss briefly in the next step.

Filing Fee: $20

STEP 6) START A CORPORATE RECORDS BOOK

File Annual Reports & Publication Requirements

This is a long-standing formality of being a for-profit or non-profit corporation that goes along with digitally keeping track of your important paperwork/data. It’s an organized physical book, or binder, that contains hard copies of the most critical paperwork –  state filing documents, licenses & permits, meeting minutes, tax returns, important contracts, etc.

You can find them at nearby office supply stores or on Amazon, but we’re huge fans of Corporate Kits which include gorgeous records books/binders, blank certificated, and you can brand them for as little as $99.

STEP 7) CONDUCT INITIAL MEETING

Hold a Meeting with Your Board of Directors

Okay, this is your first official meeting and the kickoff of your newly formed non-profit. That said, let’s take a look at three critical governance mistakes non-profit boards make to give you some perspective here.

  • Failing to understand their fiduciary (trustee) duties.
  • Failing to provide effective oversight to the non-profit.
  • Directors deferring to many responsibilities to executive committee, board chair or the founders.

You can learn more in this Non-Profit Law Article and section 504.841 has info you should know as well. Keep in mind you’ll need to record everything that happens and have it signed. Here’s a Minutes Template you can customize and use to get the ball rolling.

STEP 8) GET AN EIN

Get an EIN for Your LLC

An EIN, or FEIN, is a Federal Employer Identification Number and your non-profit entity is required to have one whether it has paid employees in the beginning or not. In other words, it’s like a social security number for your organization except it’s there to track financial activity to help maintain exempt status. You also need one to open up an official bank account in Step 10.

Almost every transaction your non-profit engages in will require an EIN. That said, you can get one quickly and free of charge by applying online through the IRS Website.

STEP 9) HANDLE LICENSING & EXEMPTIONS

Small Business Taxes

After all the big steps above your non-profit should be ready to obtain the proper licensing/permits as well as tax-exempt status to become 100% compliant on the local, state, and federal levels.

  1. File a Form 1023 federal tax exemption application with the IRS.
  2. Or Form 1023-EZ – streamlined form but must be under $50k annual gross receipts and $250k in assets.
  3. Bookmark the IA Dept. of Revenue and Economic Dev Center to get more information.
  4. If you need help, check out Business License Research packages that take care of some legwork.

Two other resources it would be a good idea to add to your non-profit bookmarks would be the Des Moines district office of the Small Business Administration and IA Source Link’s page because there’s plenty of financial resources and ways to connect with the small business community.

STEP 10) SETUP A BUSINESS BANK ACCOUNT

Best Business Bank Account

If the business-side of banking is unfamiliar to you and you don’t yet have a Chief Financial Officer (CFO), bookmark this brief breakdown of Non-Profit Accounts compiled in mid-2016 by Investopedia. You need financial utility, services and solutions that are engineered for non-profits vs. conventional companies.

Look at their checking options, and while you may have minimal activity to begin with, don’t forget to project forward. Look at interest rates and overall fee structures. Take some time to research before choosing any local, state, or national bank or credit union because this is a critical step. Sure, you can change institutions at any time, but this is a foundational choice at conception.

OPTIONAL) WORK ON A FUND-READY PLAN

Write a Business Plan

There are few things more enlightening to your entire non-profit team, and your donors and volunteers, then well-laid plans. Often non-profit core founders have the impact, visions, and goals driving them with no real focus on how to REALLY get there. Worse, non-profits fall to pieces with meager success because no foundation’s been built, no structure, to hold it and continue scaling.

A fund-ready plan is pretty straightforward actually, typically touching on core fundamentals like outreach methods, funding goals, executive summary, mission statement, programs, etc. If you need help setting all this up, we’re huge fans of a tool called LivePlan, which walks you through the entire process.

OPTIONAL) PUBLISH A RESPONSIVE WEBSITE

Build a Business Website

If you already have a website for your non-profit, as long as it’s mobile-friendly (responsive), you’re good to go. Websites are never done. They never stop growing and evolving as your platform does. But if you don’t have a site yet, it’s probably because you aren’t a designer and you either a) don’t have one you trust close by, b) don’t have the time for outsourcing.

The easiest place to get started is to head on over to website-builder platforms like Wix, SquareSpace and Weebly. They’re great for non-designer savvy teams and won’t break your budget.

Need Help Forming Your Organization?

Have a reliable non-profit filing service like Swyft Filings or LegalZoom do the work for you. Just answer a few questions about your organization and they’ll take care of the paperwork.

Visit Swyft Filings Or Visit LegalZoom

Note that this article on how to form an Iowa non-profit isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an Iowa non-profit or business in general, please consult with a lawyer or other accredited professional.