Non-profit organizations are the perfect way to make a change in your community, region, state, or nearby areas. They are different than establishing companies and managing a business, and it requires a very deep take on doing things. If you are looking to make your cause more official and reach more people, you might be thinking of establishing a non-profit organization and its associated costs.
Even though they are non-profit organizations, there are still certain costs that you need to be ready to pay to establish them. These costs vary quite a lot depending on your state and the type of organization. This article will cover the costs of opening a non-profit organization in every state and what you can expect.
Average Cost to Open a Non-Profit Organization in Every State
Every state has its own cost basis, permits, and regulations when it comes to non-profit organizations. This affects the cost associated with opening one of these non-profits. However, the average cost is $858.79 in state and federal fees. The state with the lowest cost is Kentucky, with $283, and the highest is the District of Columbia, with $2,448.
Here is the breakdown of average, minimum, and maximum costs to open a non-profit organization in each state:
| State | Avg. Cost | Min. Cost | Max. Cost |
|---|---|---|---|
| Alabama | $640.50 | $478.00 | $803.00 |
| Alaska | $577.50 | $415.00 | $740.00 |
| Arizona | $607.00 | $527.00 | $687.00 |
| Arkansas | $487.50 | $325.00 | $650.00 |
| California | $1,065.00 | $395.00 | $1,735.00 |
| Colorado | $505.50 | $343.00 | $668.00 |
| Connecticut | $612.50 | $425.00 | $800.00 |
| Delaware | $1,781.00 | $1,114.00 | $2,448.00 |
| District of Columbia | $1,480.00 | $1,267.50 | $1,692.50 |
| Florida | $912.50 | $750.00 | $1,075.00 |
| Georgia | $662.50 | $500.00 | $825.00 |
| Hawaii | $496.00 | $321.00 | $671.00 |
| Idaho | $477.50 | $305.00 | $650.00 |
| Illinois | $566.50 | $340.00 | $793.00 |
| Indiana | $492.50 | $330.00 | $655.00 |
| Iowa | $457.50 | $295.00 | $620.00 |
| Kansas | $502.50 | $330.00 | $675.00 |
| Kentucky | $445.50 | $283.00 | $608.00 |
| Louisiana | $562.50 | $375.00 | $750.00 |
| Maine | $577.50 | $365.00 | $790.00 |
| Maryland | $910.00 | $695.00 | $1,125.00 |
| Massachusetts | $622.50 | $460.00 | $785.00 |
| Michigan | $957.50 | $295.00 | $1,620.00 |
| Minnesota | $542.50 | $370.00 | $715.00 |
| Mississippi | $537.50 | $375.00 | $700.00 |
| Missouri | $477.50 | $315.00 | $640.00 |
| Montana | $457.50 | $295.00 | $620.00 |
| Nebraska | $460.00 | $290.00 | $630.00 |
| Nevada | $1,237.50 | $575.00 | $1,900.00 |
| New Hampshire | $492.50 | $330.00 | $655.00 |
| New Jersey | $762.50 | $600.00 | $925.00 |
| New Mexico | $547.50 | $310.00 | $785.00 |
| New York | $612.50 | $375.00 | $850.00 |
| North Carolina | $797.50 | $535.00 | $1,060.00 |
| North Dakota | $502.50 | $340.00 | $665.00 |
| Ohio | $736.50 | $574.00 | $899.00 |
| Oklahoma | $527.50 | $365.00 | $690.00 |
| Oregon | $487.50 | $325.00 | $650.00 |
| Pennsylvania | $662.50 | $500.00 | $825.00 |
| Rhode Island | $547.50 | $385.00 | $710.00 |
| South Carolina | $512.50 | $350.00 | $675.00 |
| South Dakota | $492.50 | $305.00 | $680.00 |
| Tennessee | $587.50 | $425.00 | $750.00 |
| Texas | $462.50 | $300.00 | $625.00 |
| Utah | $567.50 | $405.00 | $730.00 |
| Vermont | $562.50 | $400.00 | $725.00 |
| Virginia | $937.50 | $775.00 | $1,100.00 |
| Washington | $571.50 | $384.00 | $759.00 |
| West Virginia | $512.50 | $350.00 | $675.00 |
| Wisconsin | $507.50 | $345.00 | $670.00 |
| Wyoming | $462.50 | $300.00 | $625.00 |
This breakdown includes all kinds of costs associated with opening a non-profit organization. While you are opening a non-profit organization, you can expect several different costs depending on the state, as some of them might have more columns of filing costs.
Type of Costs to Open a Non-Profit Organization in Every State
The costs associated with opening a non-profit organization come in various forms. Depending on which state you are opening your organization, they will have different needs, legal taxes, and cost that you need to calculate. Here are some of these costs.
Name Reservation
This is not extremely frequent, but it could be a necessity in different states. For example, Alabama requires you to pay for a reservation for the name. This allows your non-profit organization to reserve its name and also check if it’s taken by another organization in the country.
Incorporation
Every state has incorporation costs in the beginning. This cost is to establish the non-profit organization legally and make sure that you exist on legal papers. This also allows you to get a tax-exempt status. You need to pay anywhere between $50 to $200 for incorporation filing fees.
501(c)
501(c) is the code designation to create a tax-exempt situation under the United States Internal Revenue Code. It helps to identify whether you are going to be exempt from federal income taxes or not. Almost all states require you to do this for non-profit organizations, and this fee is paid directly to the Internal Revenue Service (IRS) itself.
Administrative
Administrative fees are the fees that make sure that your non-profit can work seamlessly. These fees include legal fees, insurance, office space rent, recruitment fees and costs, and other similar fees. Anything that helps the non-profit to run is considered administrative.
990 Reporting
990 is a report that you have to file every year so that you can keep your tax-exempt status as a non-profit. Generally, non-profit organizations subcontract this to an external accountant service, but there are some that do it internally, as well. You have to pay a fee when you are making this report each year.
State Taxes
Some states require you to pay some sort of one-off fee to be exempt from the taxes. For example, Florida requires you to pay a sales tax license which costs $5. Georgia, on the other hand, requires you to pay an annual registration fee of $50.
Factors That Affect the Cost of Opening a Non-Profit Organization in Every State
When you decide to open a non-profit organization in any state, you will come across that list of costs that we mentioned previously. But what are the factors affecting these costs? Do they come in one shape, or are they different for every organization? In most cases, these costs come in one shape for every organization.
This means that the costs are fixed, but they change depending on the state or the county you are in. How big of an organization you are, the amount of funding you receive, or any other detail doesn’t matter when you are just starting the non-profit. States have their own set costs, and you only have to pay those to only set up and start the organization.
Getting Financing for Non-Profit Organizations in Every State
Non-profit organizations work on investments, funding, and various forms of financing because they don’t have an income source. That’s why, for non-profit organizations, no matter in which state you are, it’s rather easier to get the necessary financing. The most common method of financing is through fundraisers, where you help both the community and the financial side of the organization.
You can also try to secure grants via institutions, showcase your organization in the hopes of getting donations, or find investors to give your organization the necessary funding on a recurring basis. The goal is to get your organization out there and show it to as many people and institutions as possible.
How Much Do Employees of Non-Profit Organizations Get Paid?
Non-profit organizations work in various industries and could have very different roles depending on the cause of the organization. Every role could come with various salaries, but overall, they are not very high and generally lower than the average national salary range.
According to Indeed, the hourly pay ranges from $9.82 for direct support professionals to $49.03 for grant writers or directors. This amounts to about $31,369 per year or $84,931 per year for a manager. Depending on your experience, location, and role, these numbers could vary by quite a big margin.
Conclusion
Non-profit organizations are the perfect way to help a cause that you are supporting in your community, neighborhood, state, or county. They do not aim to make a profit off of the cause. They support and work only with charity or funding. The average cost to open a non-profit organization in the United States is $858.79, but every state has its own cost scale.
The cheapest state to open a non-profit is Kentucky, with $283, and the highest is $2,448 in the District of Columbia. Costs are fixed per state, and there are no outside factors affecting your start-up costs. Non-profits generally get their funding through fundraisers by showing off their cause and how they are helping the cause.
FAQ
How do you create a non-profit organization if you have no financing for the start-up costs?
At the start, getting financing for a non-profit organization could be tough because the necessary funding you need is extremely low. Most banks or institutions won’t be lending you money for that. You can find people ready to chip in and create the organization with them.
What are the best sources to find financing for a non-profit organization?
The best sources generally are local or community foundations. These foundations help only specific organizations in their region, county, or state and even grant resources where necessary. Fundraisers are also one of the most frequent ones.
Can non-profit organizations fail?
Non-profit organizations are not a business; they are a helper for a cause. That’s why they are separate from running a business, but of course, if there is no financing or funding, a non-profit organization can’t function as they do not make a profit through sales.
Sources
https://www.indeed.com/cmp/Non-Profit-Organizations/salaries
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.