- 1). Talk to officials in government and nonprofits in your community and the surrounding region. Consult with your potential future clients. Research what assistance and services are currently being offered to meet their needs. Avoid duplicating services. Research other similar nonprofits in the area. Check the Guide2Detroit website for information on local nonprofit organizations.
- 2). Draft your mission and vision statements. Decide on a name for your organization, and register it with the Corporation Division of the Department of Energy. Search online to see if your name is already in use at the Business Entity Search website of the Corporation Division.
- 3). Appoint the organization's board of directors and draft bylaws. Bylaws detail how the organization is operated and managed.
- 4). File articles of incorporation using Form 502 with the Department of Energy, Labor & Economic Growth, Bureau of Commercial Services, Corporation Division. Incorporating helps protect board officers, members, directors and others affiliated with the organization. Submission instructions are detailed on Form 502. There is a $20 filing fee. Articles of incorporation are generally approved in about four weeks. Contact the Corporation Division at 517-241-6470.
- 5). Hold the organization's first board meeting. Adopt a fiscal year, approve filing for state and federal tax exemption and adopt the articles of incorporation and bylaws.
- 6). Get an Employer Identification Number (EIN) for federal tax reporting and filing purposes by submitting Form SS-4 on the IRS website.
- 7). Submit IRS Form 1023 to apply for 501(c)(3) tax-exemption within 27 months of filing your articles of incorporation. The process usually takes about nine to 12 months. It is an examination of your organization and its work. Any potential benefits accruing from the organization or conflicts of interest are grounds of tax-exemption denial. It is advisable to have legal assistance in preparing and submitting Form 1023 as it is a complicated process.
- 8). Check with the Detroit Property Tax department to see if your organization can get a property tax exemption. You will likely have to submit your federal tax exemption determination letter, bylaws and articles of incorporation. You can contact the Property Tax department at the Coleman A. Young Municipal Center, 2 Woodward Avenue-Suite 120 in Detroit, or call it at 313-224-3560.
- 9). File for Michigan state sales tax-exemption with Form 3372 when you have received 501(c)(3) determination from the IRS. Form 3372 can be found on the Department of Energy's website.
- 10
Submit the Initial Solicitation Application/Registration to the Michigan Attorney General if your organization expects to receive $8,000 or more in donations from the public each year. Find more information about exemptions, filing instructions and requirements on the attorney general’s website.
This form also serves as registration of your organization’s assets. The attorney general’s website has more information about asset registration and exemptions on its charities page. Should your organization wish to be exempt from having this license, it must submit a Request for Exemption (available on the attorney general’s website) and file it with the attorney general.
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