How to Start a Nonprofit in California

To start a nonprofit in California and get 501c3 status, follow these steps:

Step 1: Name Your California Nonprofit
Step 2: Choose Your Registered Agent
Step 3: Select Your Board Members & Officers
Step 4: Adopt Bylaws & Conflict of Interest Policy
Step 5: File the Articles of Incorporation
Step 6: Get an EIN
Step 7: Apply for 501c3

Recommended: Start your nonprofit with Northwest for just $29 + state fees
  • Formation and FREE registered agent services for your first year
  • Best privacy protection and customer service

Starting a 501c3 Nonprofit in California Is Easy

California is a beautiful place to live, but many people living there need support. From medical research to helping the homeless population, nonprofits in the state take up that role and offer aid where they can. 

As the state is very large, it shouldn’t come as a surprise that there are over 190,009 nonprofits already being run in California. Over 2 million people work at these nonprofits all over the state. Most of them are based in major cities like Los Angeles, San Francisco, San Diego, Riverside, and Sacramento, though.

The San Francisco region brings in the most revenue. Though there are 28,624 nonprofits there compared to Los Angeles’ 64,585, the city outearns LA by over double. San Francisco’s nonprofits have $209 billion in revenue and over $364 billion in assets, while LA lags behind with $107 billion in revenue and $284 billion in assets. 

That being said, 271 of the nonprofits in the state employ over 1,000 people each, and 457 bring in over $100 million in profits every year. On the other end of the spectrum, 46,000 nonprofits earn less than $250,000 in revenue annually, and 28,862 have up to 10 employees. 

Some of the largest nonprofits in the state include:

  • Kaiser Foundation Health Plan
  • University of Southern California (USC)
  • Stanford University
  • Kaiser Permanente
  • Dignity Health

These nonprofits earn significant revenue annually, and they may also offer the best employment to people living around them. 

Religious organizations and educational institutions top the list of common types of nonprofits. The least common organizations are social science research centers, medical research organizations, and scientific research centers, which could mean there’s a good niche for your new organization in those fields. 

To start a 501c3 tax-exempt nonprofit organization in California, you must first start a nonprofit in California according to the rules of the state and then apply for 501c3 status with the IRS. 

Learn more about 501c3 eligibility in our What is a 501c3 guide.

Want to form a nonprofit elsewhere? Check out our other How to Start a Nonprofit guides. Also, check out our best nonprofit formation services review.

Step 1: Name Your California Nonprofit

Your first step before starting a nonprofit is to find a name that complies with all California naming requirements. You should also choose one that is easy for people to search for and find — make it distinguishable from others so your nonprofit stands out.

Our How to Name a Nonprofit in California page talks more about the steps you need to take to get the right name for your nonprofit.

1. Remember to follow these naming guidelines:

  • Your organization’s name cannot include:
    • Words related to the United States Olympic Committee. These include words like: “Citis Altius Fortius” or “Olympiad.”
    • Words or terms associated with financial institutions, like the words “bank” or “trust company.”
    • Grossly offensive terms.
  • Unless you obtain consent, don’t use a name too similar to other California-based businesses.
  • Choose a name that does not mislead the public or lead to confusion about your organization.

The Secretary of State’s official guidelines provide more detailed information about naming your business in California and all the requirements you need to adhere to.

2. Does anyone else in California use this name? Complete a quick name search on the State of California website to be sure no one else is already using the business name you’ve chosen.

3. Can you get the URL? Even if you don’t want to have a website, you may still want to buy your web domain. If you don’t purchase it now, someone else could buy it, which could result in you being unable to use it later.

After you get a name together and decide if you want to purchase a URL, it’s time to talk to a professional service that can help you with the California nonprofit formation process. Our recommendation is:

Northwest ($29 + State Fees)

Step 2: Choose an Agent for Service of Process in California

Your organization is required to have a registered agent, known in the state as an agent for service of process. 

What does an agent for service of process do? An agent for service of process’s job is to work as the main point of contact between your business and the state. They accept legal documents on your behalf. You can choose to be the agent for your business or nominate someone from your company to fill the role instead. 

Who can be your business’s agent for service of process? Agents need to be corporations or individuals that reside in California. The corporation could be a registered agent service, which is a third party authorized to accept a business’s legal documents (i.e., service of process) in California. 

Not sure where to start with your agent? Check out our How to Choose a Registered Agent for your California Nonprofit guide.

Step 3: Select your Directors & Officers

The directors of an organization come together to form a board of directors. This board of directors is responsible for overseeing the operations of the nonprofit. 

The president, secretary, and other members of the nonprofit who have individual responsibilities and authorities are known as officers

Both California and the IRS require 501c3 nonprofits to have at least three directors to be eligible for 501c3 status. The majority of directors should not be related to each other.

California also requires that the nonprofit’s officers include:

  • A president
  • A secretary
  • A treasurer

With the exception of the treasurer and secretary, officers can hold multiple titles if the bylaws allow for it. Additionally, if the nonprofit has a CFO, they cannot also be be president.

To learn more about electing a California nonprofit board of directors, read our full guide.

Step 4: Adopt Bylaws & Conflict of Interest Policy

Before you can be eligible for your goal of a 501c3 status, your nonprofit has to establish two documents. These include your:

  1. Bylaws 
  2. Conflict of interest policy

What are your company’s bylaws? Bylaws outline the operating procedures of the nonprofit, and they explain how it will be run.

What is the importance of a conflict of interest policy? Conflict of interest policies are a set of rules that explain that those working with the nonprofit, such as officers or directors, cannot make decisions that benefit them but not the nonprofit. All decisions have to be in the nonprofit’s best interests. 

NOTE: During your first organizational meeting, you’ll appoint your directors and officers to the board. At that time, you will also need to adopt and implement the bylaws and conflict of interest policy.

Step 5: File the California Articles of Incorporation

To register your nonprofit, you will need to file the Articles of Incorporation with the State of California. 

To ensure that your nonprofit is eligible to apply for 501c3 status, in the Articles of Incorporation you must explicitly state the following:

1. Purpose:

In order to qualify for 501c3 status, the organization’s purpose must explicitly be limited to one or more of the following:

Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, Testing for public safety

2. Dissolution:

You must explicitly state what the assets of the organization will be used for, and what will happen to the assets if the organization is dissolved. 

To be eligible for 501c3 status, the assets of your organization must only ever be used for purposes approved under section 501c3. 

Section 5 of this sample IRS document provides an example of these provisions required for 501c3 eligibility. 

File the Articles of Incorporation

OPTION 1: File Online With the California Secretary of State

File Online

– OR –

OPTION 2: File Form ARTS-PB-501c3 by Mail or In Person

Download Form

Fee: $30 online and by mail, $45 in person

Mailing Address:
Secretary of State
Business Entities Filing Unit
P.O. Box 944260
Sacramento, CA 95814

Office Address:
Business Entities
1500 11th Street
Sacramento, CA 95814

To learn more, read our California Articles of Incorporation guide.

Step 6: Get an EIN

What is an EIN? EIN stands for Employer Identification Number. The Federal Tax Identification Number (FTIN) may also be used. Either number is used to identify your business — the federal government accepts that in place of a Social Security number. You’ve probably heard this term before or seen it on tax forms. 

Why should I obtain an EIN? An EIN typically isn’t optional. It’s required for you to:

  • Hire employees
  • Pay taxes to the state or federal governments 
  • Open bank accounts for your nonprofit

How do I go about getting an EIN? As a business owner, you need to obtain an EIN from the IRS after forming your company. You can do so by mail or via the IRS website. Take a look at our EIN Lookup guide to learn more about this process. 

Step 7: Apply for 501c3 Status

Before a nonprofit can apply for 501c3 status it must, 

  1. Elect at least 3 directors not related to each other
  2. File the Articles of Incorporation with the required provisions (As covered in Step 5)
  3. Adopt the bylaws and conflict of interest policy
  4. Have an EIN number

Once these four conditions have been met your nonprofit can apply for 501c3 tax-exempt status by filing Form-1023 online. 

If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501c3. 

See if your nonprofit has 501c3 status in California. Use our California 501c3 lookup table to find all California nonprofits.

FAQ: Starting Your Nonprofit

When should an organization apply for federal tax exemption?

Form 1023 must be filed within 27 months from the end of the first month your organization was created.

How long will it take for the IRS to process Form 1023/1023-EZ?

Soon after sending your application you should receive an acknowledgment of receipt of your application. 

If your application is simple and complete, IRS will send your determination letter within 180 days for Form 1023.

If you have not heard from them by that time you can call (877) 829-5500 to inquire about your application. 

State of California Quick Links