Starting a 501(c)(3) in Montana
The Internal Revenue Service (IRS) is the Federal agency charged with overseeing nonprofit organizations
recognized under Internal Revenue Code 501(a), including 501(c)(3) organizations which are generally referred to as charitable organizations. The IRS has a webpage that it maintains to help you as you
work through the details of starting a 501(c)(3) organization.
Visit the IRS site.
General Steps to Incorporating your Nonprofit Organization:
This list is NOT comprehensive – but it does provide a general overview and resource
links that will aid you in your effort to become a 501(c)(3) charitable
organization in Montana.
- Choose a name for the organization.
- Check availability for your proposed name by visiting
the US Department of Patents and Trademarks website as well as the Montana
Secretary of State’s Office (MT-SOS) Business Entity Search.
- File Articles of Incorporation/ and a copy of your
organization's bylaws with MT-SOS. See Forms
- File IRS form SS-4, Application for Employer
Identification Number (EIN). Apply through the IRS online.
- Prepare IRS form 1023, Application for Recognition of
Exemption under Section 501(c)(3). Expect the approval to take at least 3
to 4 months, possibly more.
- Review Form 1023 and attachments with an attorney or
CPA well versed in the nonprofit realm - MNA staff are not able to review
this form for you.
- Send Form 1023 to IRS and enclose the (up to) $850 User
fee. User Fee Details.
- Upon receipt of your Approval from the IRS you must
file a "Tax Exempt Status Request" with the Department of
Revenue. Download the Form.
Before you begin the Process -
Please Review This Introduction
A nonprofit is a business incorporated to operate in Montana and required
to comply appropriate laws. Running any business takes time, money,
effort, and strong organizational skills to be successful. In the case of
a nonprofit organization, the founder or founders will not own the
nonprofit, it becomes a public corporation stewarded by a board of
directors. Neither will they own the tools (computers, etc)
purchased by the nonprofit, nor the ideas or products generated while working
for the nonprofit. To best familiarize yourself with the requirements of
starting or managing a nonprofit organization, visit https://www.stayexempt.irs.gov/,
a website created and maintained by the IRS.
You should also visit the Principles and Practices for Nonprofit Excellence in Montana section
of our website to learn about managing a nonprofit organization in
Questions to Consider Before
- Have you asked others to evaluate the idea for your
- Is there a demonstrated need for this service/project
that is not being fulfilled elsewhere?
- Is there anyone else that is doing this
locally? ...in Montana? …the region? …nationally?
- Have you carefully considered a collaboration or
partnership with an existing organization rather than starting a new one?
- Can you articulate your mission in two to three sentences?
- Do you want to be a membership organization or
- What interests or constituencies should be on the Board
- Have you developed a two-year draft budget for the
- Will you rely on contributed funds or earned income
(program/service fees, etc.)? Both?
- Do you have a plan for financial sustainability?
- Do you and your supporters have the needed skills to
start and maintain the new organization?
Funding for Nonprofits:
Here are some things to keep in mind regarding funding for nonprofits:
- Sustainable funding is difficult to find - it will
take great effort and time to raise funds for your organization every
- Some foundations will only fund organizations that
already have a track-record spanning several years.
- Grants can be restricted to a narrowly defined purpose
and often may not be used to administrative expenses such as rent,
utilities, or office supplies.
- IRS Form 990 asks you to report the time and money your
organization spent doing fund-raising.
Ongoing requirements for 501(c)(3)
Each year you will be required to
file a report with the IRS. IRS Form 990 has several different formats
depending on several factors including gross receipts. Your organizations
Form 990, Form 1023, and all documents accompanying these filings will be
open to public inspection. See the IRS FAQ about
Public Disclosure requirements.
- Annual Report with MT Secretary of State
- W-3 to State and IRS
- Form IRS 990 – unless your organization is a religious
institution (i.e. a church)
- Properly acknowledge donors for receipt of donations
according to IRS rules
- Some organizations will need to hire a CPA to perform
an annual Audit or Financial Review
- Quarterly Payroll Tax reports - state and federal
- State Work Comp payments
- State Unemployment Insurance payments
These links will help you as you
work to start a 501(c)(3) organization.
• Montana Secretary of State Business Forms
• Montana Department of Justice Consumer Protection for
• Principles and Practices for Nonprofit Excellence in Montana
• Montana Department of Revenue Tax Exemption Request Form
• IRS Resources for Exempt Organizations
• www.stayexempt.irs.gov - a site created and maintained by the IRS
Nonprofit development and management
• BoardSource e-Book “Starting a Nonprofit Organization”
• The Looking Glass World of Nonprofit Money: Managing in
For-Profits’ Shadow Universe
a Nonprofit Toolkit
• Setting up a Nonprofit Office Toolkit