To start a nonprofit in Massachusetts and get 501c3 status, follow these steps:
Step 1: Name Your Massachusetts 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 Organization
Step 6: Get an EIN
Step 7: Apply for 501c3
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Starting a 501c3 Nonprofit in Massachusetts Is Easy
When you’re getting ready to open a nonprofit, it helps to know about the nonprofits that are already helping your state. Being aware of the industries that have plenty of support versus those with less can help you find your niche (and potentially a source of revenue).
In Massachusetts, there are currently 41,999 nonprofits. Together, they bring in over $139 billion in revenue and have over $446 billion in assets. On top of that, they employ around 859,123 people, creating jobs for many of the residents living in Massachusetts.
Where are most nonprofits located? While some might be online or in rural areas, the majority are in Boston. There, 28,148 nonprofits call the city home. Others can be found in Worcester (4,130), Springfield (3,900), Barnstable (1,841), and Pittsfield (1,105).
The interesting thing about the nonprofits in Massachusetts is the main industries they work in. The largest employers include:
- General hospitals
- Universities
- Developmentally disabled centers
- Colleges
- Professional/trade associations
Of those, 127 provide jobs for over 1,000 people.
Of course, when you start your nonprofit, you might not earn as much as some long-time established nonprofits. Today, around 14,137 nonprofits bring in less than $250,000 in revenue annually, but 173 bring in over $100 million. The highest earning organizations? Public foundations, health finance organizations, general hospitals, hospital systems, and universities.
And, if you’re interested in opening a nonprofit in an underserved industry, consider working in public safety, social science research, scientific research, or medical research. Crime and legal aid organizations are also fewer in number than nonprofits such as educational institutions or foundations.
Now that you’re ready to choose an industry and get your nonprofit up and running, it’s time to take the steps necessary to legally assemble and found your organization.
To start a 501c3 tax-exempt nonprofit organization in Massachusetts, you must first start a nonprofit in Massachusetts 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 Massachusetts Nonprofit
The first step to getting your organization off the ground is choosing a name for it. You should choose a name that adheres to the state’s guidelines, and that is easy to remember and search for. You’ll want people to be able to find you quickly and easily, so they can soon become members and donors.
For more details on all the facts about naming your nonprofit, visit: How to Name a Nonprofit in Massachusetts
1. Follow the Massachusetts naming guidelines:
- Unless you’re a church or other kind of religious organization, make sure you include “Corp.” or “Corporation” somewhere in your business’s name.
- Your name must be distinguishable from all other entity names in Massachusetts. This included any reserved business names.
For more official guidelines, visit this page to see how to name a nonprofit in Massachusetts.
2. Is your business name available for use in Massachusetts? Next, perform a name search on the State of Massachusetts website to be sure no other business is using the name you want. If it is, you need to pick something else.
3. Is the URL available for your chosen business name? Most businesses have their own web domain. Check to see if the name you want is available for purchase. If not, you may want to choose something else. Buy the URL now, even if you don’t want a website right away. That way, the URL will be available only to you and not to others.
A professional service can help you finish the Massachusetts nonprofit formation process once you choose a name and reserve your URL. We suggest working with a company that has a long history of successful interactions with their clients, such as:
Northwest ($29 + State Fees)
Step 2: Choose a Resident Agent in Massachusetts
Any nonprofit in Massachusetts is required to nominate a resident agent for the organization, known as a registered agent in most other states.
What is a resident agent? Put simply, it is a corporation or individual resident of the state that can receive legal documents on behalf of your nonprofit. Many businesses choose to use a registered agent service since this makes it easy to track documents and keep them secure.
You can choose to be your own resident agent, or you can nominate another person who works with your nonprofit. Just remember, whoever you choose does have to be the main point of contact with the state and should be prepared to receive legal documents for your nonprofit at all times.
For more details, read our How to Choose a Registered Agent for Your Massachusetts 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 Massachusetts 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.
Massachusetts also requires that the nonprofit’s officers include:
- A president
- A secretary
- A treasurer
With the exception of the president and any vice presidents, officers can hold multiple titles if the bylaws allow for it.
To learn more about electing a Massachusetts nonprofit board of directors, read our full guide.
Step 4: Adopt Bylaws & Conflict of Interest Policy
To become eligible for 501c3 status, your nonprofit needs bylaws and a conflict of interest policy. These must be adopted during your first organizational meeting.
What are bylaws? Bylaws go over your nonprofit’s operating procedures.
What’s a conflict of interest policy? A conflict of interest policy is put in place to prevent (or penalize) those working with your nonprofit from making self-serving decisions rather than decisions that are in the best interests of the nonprofit. All people working with the nonprofit should sign this document.
NOTE: Your initial organizational meeting is where you’ll adopt these two documents and appoint directors and officers. Don’t forget to have them agree to the documents to protect your nonprofit.
Step 5: File the Massachusetts Articles of Organization
To register your nonprofit, you will need to file Articles of Organization with the State of Massachusetts.
To ensure that your nonprofit is eligible to apply for 501c3 status, in the Articles of Organization 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 Organization
Option 1: File online with the Commonwealth of Massachusetts.
– OR –
Option 2: File by mail.
State Filing Cost: $40 online, $35 by mail.
Mail to:
Secretary of State
Corporations Division
Commonwealth of Massachusetts
One Ashburton Place, 17th Floor
Boston, MA 02108
To learn more, read our Massachusetts Articles of Organization guide.
Step 6: Get an EIN
What is an EIN? An EIN is an Employer Identification Number, occasionally called a Federal Tax Identification Number (FTIN). The federal government assigns these numbers to businesses (such as nonprofits) to differentiate them from one another and other individuals.
Why is an EIN needed for your nonprofit? Having an EIN is necessary to separate your business from you as the owner. You’ll need an EIN to:
- Pay taxes to the local, state, or federal government as your business
- Hire employees to work with the business
- Open up a bank account for your business
Our EIN Lookup guide has more details for you to review. Remember, an EIN is free, and you just have to apply for one from the IRS by mail or online after completing your nonprofit’s formation process with the Commonwealth of Massachusetts.
Step 7: Apply for 501c3 Status
Before a nonprofit can apply for 501c3 status it must,
- Elect at least 3 directors not related to each other
- File the Articles of Organization with the required provisions (As covered in Step 5)
- Adopt the bylaws and conflict of interest policy
- 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 Massachusetts. Use our Massachusetts 501c3 lookup table to find all Massachusetts 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.