How to Start a Nonprofit in Colorado

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

Step 1: Name Your Colorado 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

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Starting a 501c3 Nonprofit in Colorado Is Easy

If you’re interested in getting started with your own nonprofit, now is a great time to look into it. You could help many people in your local area or state by opening your business in Colorado.

What’s interesting about Colorado is that it has many nonprofits. It is already home to around 35,413 organizations that employ over 300,000 people in the state. Additionally, the nonprofits in the state bring in over $44 billion in revenue. 

As you might expect, most of the nonprofits are based in Denver. There are 16,041 nonprofits there alone, and they employ around half of the 300,000 people involved in nonprofit work in the state. They also account for over $26 billion of the revenue brought into the state. 

Other parts of the state don’t have as many nonprofits. For example, in Pueblo, there are only 758 nonprofits. Colorado Springs has 3,988, and Grand Junction has 832. For your business, you might want to consider opening your nonprofit in areas that are already less served. 

There are a couple of large organizations that offer the most employment out of these nonprofits. They include: 

  • Children’s Hospital Colorado
  • Discover Goodwill of Southern & Western Colorado
  • Arc Thrift Stores

Looking at the largest nonprofits, they’re most likely to include religious organizations, specialty hospitals, and general hospitals. They, as well as a few other large nonprofits, are the most likely to supply a large number of jobs to the local area and residents that live there. 

Finally, there are only 65 nonprofits that bring in over $100 million annually. The majority of nonprofits (8,100) have a revenue stream of $250,000 or less each year.  Lower-earning nonprofits tend to include mutual assistance and public safety organizations. Others include social science research centers and medical research centers. 

To start a 501c3 tax-exempt nonprofit organization in Colorado, you must first start a nonprofit in Colorado 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 Colorado Nonprofit

Your first step is to create a name for your Colorado nonprofit. Remember, this name has to meet the Colorado naming guidelines and should be one that donors or those interested in looking you up can remember easily. 

You can also use our How to Name a Nonprofit in Colorado guide to help you get started.

1. Take a look at the naming guidelines:

  • Your nonprofit’s name can, but doesn’t have to, have an organizational designation such as “Inc.,” “Incorporated,” “Company,” or “Ltd.”
  • Click here to see more of the official guidelines and all the rules for your Colorado-based organization.

2. Is anyone using the name in Colorado? Your next step is to do a name search on the Colorado Secretary of State’s website to be sure no one is using the name yet. 

3. Is a domain URL available? Next, think about looking for your nonprofit’s web domain. If the URL is already taken, you may want to choose a different name. Find a name that works with your business name, and save it in case you want to create a website later. 

After you get the URL and business name you want, it’s time to move forward and choose a professional service to help with your Colorado nonprofit business formation. It’s our advice to go with a company that has a proven track record, such as:

Northwest ($29 + State Fees)

Step 2: Choose a Registered Agent in Colorado

A registered agent must be nominated for your nonprofit in Colorado.

Registered agents work as your main point of contact with the State of Colorado. The agent accepts legal documents on your behalf. 

Who can be your business’s registered agent? Many people choose to work with a registered agent service that has the authorization to work in Colorado. You can also choose any Colorado business or individual qualified for the role. Within your company, you or any other employee can act as that agent if you’d like.

For more information, read more with our How to Choose a Registered Agent for your Colorado 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

While Colorado only requires nonprofit corporations to have at least one board member, the IRS requires nonprofits to have at least three directors to be eligible for 501c3 status. The majority of directors should not be related to each other.

Colorado also requires that the nonprofit’s officers include:

  • A president
  • At least one vice president
  • A secretary
  • A treasurer

Officers can hold multiple titles if the bylaws allow for it.

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

Step 4: Adopt Bylaws & Conflict of Interest Policy

Before you can become eligible for 501c3 status, your nonprofit has to create two important documents:

  1. Bylaws 
  2. Conflict of interest policy

What do bylaws do? Your nonprofit’s bylaws go over the rules for operating your organization.

What’s a conflict of interest policy? A conflict of interest policy is one that makes sure no directors, officers, or others involved with the business make decisions that could harm your nonprofit. 

NOTE: You’ll need to adopt and put into place these two documents during your first organizational meeting. This is also the meeting during which you’ll appoint official officers and directors for your company.

Step 5: File the Colorado Articles of Incorporation

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

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

File Online With the State of Colorado

File Online

State Filing Cost: $50

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

Step 6: Get an EIN

An Employer Identification Number (EIN), or Federal Tax Identification Number (FTIN), is one that the federal government uses to help identify your business entity. It works much like your Social Security number and gives you a way to file taxes and otherwise interact with the government as your business. 

Why is an EIN necessary? An EIN is needed for:

  • Opening a business banking account
  • Completing your federal or state taxes
  • Hiring employees people to work for your company

How will I get an EIN? An EIN is available through the IRS for free. You can seek one after you complete your business formation process. You can seek your EIN online or by mail. For more guidance, take a look at our EIN Lookup guide.

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 Colorado. Use our Colorado 501c3 lookup table to find all Colorado 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. 

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