What goes into the cost of starting a nonprofit
Starting a nonprofit is cheaper than most people expect, and the money is almost all government fees paid once at the start. There are four pieces.
Your state incorporation fee. You legally create the nonprofit by filing Articles of Incorporation (or a Certificate of Incorporation or Formation) with your state. This fee ranges from about $20 to $125 depending on the state.
The IRS user fee. To become a 501(c)(3), you file Form 1023-EZ, which costs $275, or the full Form 1023, which costs $600. Most small, simple nonprofits that meet the eligibility test file the 1023-EZ. There is no way around this fee if you want federal tax-exempt status.
Charitable registration. Most states require you to register before you ask the public for money. The starting fee is often $0 to $50, and it is usually tiered by how much you raise. A few states are free, and a few exempt the smallest all-volunteer groups.
Your EIN, which is free. You need a federal Employer Identification Number, and the IRS never charges for one. If a site offers to get your EIN for a fee, you are paying for something the IRS does for free in minutes.
What this tool does not include
The estimate is the required government fees only. It does not include optional spending like an attorney or a formation service, expedited processing, or ongoing costs like annual reports and insurance. It also does not include software: Ember has a free tier for small nonprofits, so your tools do not have to be a startup cost.
Common questions
How much does it cost to start a nonprofit?
For most small nonprofits the real out-of-pocket cost is the state incorporation fee (often $20 to $125), the IRS user fee ($275 for Form 1023-EZ or $600 for the full Form 1023), and charitable registration before you fundraise (often $0 to $50 to start). A bare-bones DIY start is commonly $300 to $750. Your EIN is free.
Is the IRS fee $275 or $600?
It depends on which form you file. Form 1023-EZ, for smaller and simpler organizations, has a $275 user fee. The full Form 1023 has a $600 user fee. Most small nonprofits that qualify file the 1023-EZ. This is general information, not legal or tax advice.
Is starting a nonprofit free?
No, but the costs are small and fixed, and none of them go to Ember. The IRS never charges for an EIN, so that step is free, but incorporating with your state and applying for 501(c)(3) status both carry government fees. There is no way to get tax-exempt status without the IRS user fee.
Does every state charge the same to incorporate?
No. State incorporation fees range widely, from about $20 in Michigan to $125 in Pennsylvania. This tool uses the verified fee for each state we have a guide for; for other states, enter your own state fee and the rest of the estimate still works.
What ongoing costs come after starting?
Most nonprofits file an annual report with their state (often a small fee), renew charitable registration each year, and file a Form 990 with the IRS (free). Budget for those, plus any tools you use. Ember has a free tier for small nonprofits so software is not a startup cost.