How to Start a Nonprofit in Texas

To start a nonprofit in Texas and get 501c3 status, you must:

Step 1: Name Your Texas 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 Certificate of Formation
Step 6: Get an EIN
Step 7: Apply for 501c3

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Starting a 501c3 Nonprofit in Texas Is Easy

As the second-largest state in the country, Texas is home to numerous nonprofits. These nonprofits, much like those in other states, seek to provide support and services for public benefit instead of generating profits. The types of nonprofit organizations in Texas range from religious organizations to human service organizations, arts and culture to veteran organizations, and beyond.

There are over 135,000 nonprofit organizations in Texas right now. That’s significantly more than many smaller states. But that’s not surprising, given the size and population of Texas. These organizations generate more than $147 billion in revenue annually and have assets in excess of $431 billion. And all these organizations need help, which is why they employ over 1 million residents.

Just like in other states, the bigger cities in Texas tend to have the largest concentration of nonprofits. Dallas ranks at the top, with over 38,000 nonprofits employing nearly 275,000 people. The organizations in Dallas generate more than $50 million in revenue per year. Houston is next in line, with over 32,000 nonprofits generating over $40 million per year in revenue. Houston nonprofits employ more than 440,000 people.

Dallas and Houston are big cities with correspondingly large nonprofit numbers. Smaller cities like Austin and San Antonio have their fair share too. Austin is home to more than 13,000 nonprofits employing more than 164,000 people and generating more than $13 million in revenue. San Antonio has more than 10,000 nonprofits employing more than 73,000 people. Nonprofits in San Antonio earn more than $9 million in revenue each year.

Some of the largest nonprofits in Texas based on revenue include:

  • Ascension Seton
  • Texas Children’s Health Plan
  • Rice University
  • Houston Methodist

Religious organizations are the most prolific type of nonprofit in Texas, with more than 27,000 in the state. Educational institutions are the next largest group, with nearly 20,000. Foundations are next, with over 11,000 and human service organizations are nearly as prevalent, with over 10,000 in the state.

To start a 501c3 tax-exempt Texas nonprofit organization, you must first start a nonprofit corporation according to the rules of the state and then apply to the Internal Revenue Service (IRS) for a 501c3 tax exemption. 

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

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

Step 1: Name Your Texas Nonprofit

One of the most important steps in starting a nonprofit is choosing the right name. It’s necessary to adhere to the Texas naming requirements when choosing a name. It’s also worthwhile to find a name that is easy to search for by potential members and donors. 

For more information, check out our How to Name a Texas Nonprofit guide. 

1. Follow the naming guidelines:

  • Avoid the following when choosing your name:
    • Any words related to the United States Olympic Committee, including “Citius Altius Fortius,” “Olympic,” or “Olympiad”
    • Words typically associated with financial institutions, such as “bank,” or “bank and trust”
    • Words that could be seen as grossly offensive
  • The name you choose does not need to include organizational designations like “Incorporated” or “Company”

To get the complete set of naming rules for Texas, read the official guidelines on the Secretary of State’s website. 

2. Is the name available in Texas? The name you choose might already be in use. Make sure it’s available by conducting a name search on the state’s website. 

3. Is the URL available? It’s always a good idea to verify that the name you want to use is available as a web domain. You don’t have to make the website right now, but you want to keep the URL available for your use. 

Once you have ensured your name is viable and obtained your URL, you can choose a professional service to finish the Texas nonprofit formation process for you. Our favorite is:

Northwest ($29 + State Fees)

Step 2: Choose a Registered Agent in Texas

Every nonprofit in Texas needs to designate a registered agent for their organization. 

What is a registered agent? A registered agent is a person or organization you make responsible for receiving essential legal documents for your nonprofit. It’s essentially your business’s point of contact with Texas officials. 

Who can be a registered agent? To serve as your agent, the individual or organization must reside in Texas. It can be someone in your company, someone you trust, or a registered agent service.

If you want more information on picking a registered agent, read our guide on How to Choose a Registered Agent for Your Texas Nonprofit.

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 Texas 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.

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

Step 4: Adopt Bylaws & Conflict of Interest Policy

Before you can apply for 501c3 status, you need to have the following documents:

  1. Bylaws
  2. Conflict of interest policy

What are bylaws?  These are the rules that state your nonprofit’s operating procedures. 

What is a conflict of interest policy? This is the collection of rules you lay out to make sure all decisions made by the board of directors and/or officers benefit the organization and not individual members. 

NOTE: These two documents must be adopted during the first organizational meeting where directors and officers are appointed.

Step 5: File the Texas Certificate of Formation

To register your nonprofit, you will need to file Form 202 – Certificate of Formation for the State of Texas.

To ensure that your nonprofit is eligible to apply for 501c3 status, in the Certificate of Formation 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

  1. 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 Certificate of Formation

Option 1: Submit the Certificate of Formation through the Secretary of State’s online portal.

File Online

– OR –

Option 2: File by mail or in-person.

Download Form

State Filing Cost: $25

Mail to:
Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

Submit in-person:
James Earl Rudder Office Building
1019 Brazos St
Austin, TX 78701

To learn more, read our How to File a Nonprofit Certificate of Formation in Texas guide.

Step 6: Get an EIN

What is an EIN? An Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN) serves as the identifier for your nonprofit for tax purposes much like a Social Security number does for an individual.

Why do I need an EIN? You need an EIN for the following:

  • To open a bank account for the organization
  • For federal and state tax purposes
  • To hire employees for the organization

How do I get an EIN? Get an EIN for free by contacting the IRS online or by mail. Our EIN Lookup guide is available for more information.

Step 7: Apply for Tax Exemption

Applying for Federal Tax Exemption Status: under section 501c3

Before a nonprofit can apply for 501c3 tax exempt status with the Internal Revenue Service it must,

  1. Elect at least 3 directors not related to each other
  2. File the Certificate of Formation 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 tax exempt status under section 501c3 with the Internal Revenue Service (IRS) 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 Texas. Use our Texas 501c3 lookup table to find all Texas 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.

Applying for State Tax Exemption Status

Once you have received your 501c3 determination letter from the IRS, you can file for Texas income tax exemption with the Texas comptroller using Form AP-204.

To file to obtain sales tax exemption file Form AP-205, Application for Exemption – Charitable Organizations with Texas comptroller.

State of Texas Quick Links