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How Do You Make a 501(c)(3)?

  • Writer: Ingrid Guo
    Ingrid Guo
  • Apr 30, 2021
  • 3 min read

Updated: May 3, 2021

Author: Elli Eisman '22

The Lawrenceville community is composed of an ambitious and intelligent student body, many of whom take interest in the field of entrepreneurship. While this creative mindset may entail the production of goods or a service for profit, an alternative route is that of a nonprofit organization.


By definition, a 501(c)(3) is a nonprofit organization approved by the Internal Revenue Service (IRS) as a tax-exempt, charitable organization. While well-developed 501(c)(3)s like American Red Cross, UNICEF, and Planned Parenthood have already built their name and legacy, the application process towards obtaining the status may seem daunting. But, in a step-by-step abridgement, I have compiled the six main points that should be met.


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Step 1 : Name The Organization


In the state of New Jersey, the name of the organization must be suffixed by “a New Jersey nonprofit corporation,” “incorporated,” “corporation,” “inc,” or “corp,” unless explicitly exempted by Title 16 of the Revised Statues. The chosen name should be reflective of the organization’s overarching goal or service, and will be the first and foremost establishment of the brand.


Step 2 : Appoint Incorporators and Directors


The Articles of Incorporation will be signed by any and all incorporators, the number of which can range from one to three. Although, New Jersey conditions require at least three directors, all of whom must be at least 18 years of age. In addition, a cabinet containing a president, secretary, and treasurer (unrelated and in adherence to age and residency requirements) must be identified early on in the process. These team members will facilitate the organization’s purpose and success after obtaining 501(c)(3) status. Lastly, a registered agent to manage legal matters must also be accounted for.

Step 3 : File Articles of Incorporation


These documents legally certify the creation of a corporation, containing all pertinent information. The files can be registered via mail, in-person, fax, or online, with an agency fee of $75, and are generally turned around in four weeks. An initial report can also be filed after the Articles of Incorporation, but is not required.


Step 4 : Employer Identification Number (EIN)


The IRS will assign a nine-digit number to the organization at no cost, regardless of the employee hiring process. The EIN can be used to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS. This number, along with all other legal documents, should be secured in a safe location.


Step 5 : Draft Bylaws


Bylaws will internally govern the nonprofit and essentially act as an operating manual. Ratified by the Board of Directors, a conflict of interest policy must also be developed. In the case of competing interests, this document circles back to protect the corporation’s original objectives and values. Both of these documents will be submitted when applying to the IRS for 501(c)(3) exemption.


Step 6 : Apply for 501(c) Status


A quick intermediate step of establishing state tax identification numbers/accounts will allow the organization to register for applicable taxes. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ, which are returned with a Determination Letter by the IRS to recognize official exemption. The process can take up to several months to complete and warrant fees of $275 of $600. While tax-exemption status can vary state to state, if already operating as a nonprofit corporation (with an IRS Determination Letter), the organization is already exempt from the New Jersey Corporation Business Tax.


Step 6 : Business Licenses and Permits


The applicability of additional licenses and permits will vary depending on organization type, so a source to sort through these requisites has been provided below.


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Two members of the WIB@L council, Emmy Apfel and Ingrid Guo, have conducted the process themselves to pursue a passion and service they believe to benefit others.


Emmy Apfel - Beyond the Book



Beyond the Book is a 501(c)(3) organization that aims to reimagine remote learning and to inspire students around the world through peer-to-peer mentorship and personalized educational experiences. We help K-8 students thrive in their academics through homework help, class organization, and mentorship, all while fostering a greater learning community.


Ingrid Guo - Eagle Chess School



Eagle Chess School was founded in 2018 by Ingrid Guo and IM Arthur Guo. We provide high-quality free chess camps for underprivileged children in the metro Atlanta area. Using chess as an educational tool, we aim to help children improve their critical thinking skills, to enhance their self-esteem and to help fight social inequality and prejudice. Eagle Chess is a non-profit 501(c)(3) organization and US Chess Affiliate.


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