How to start a nonprofit organization in California

You have an idea to make the world a better place, and you want to start a nonprofit organization as a means to do so. The good news is that starting a nonprofit in California is not that difficult if you have a solid plan, the right team, and enough funds to get started.

The bad news is that running a successful nonprofit is not easy. You will need to consider how you will benefit the public, raise funds, recruit staff and/or volunteers, establish a board of directors, and comply with the various laws that govern nonprofits. Your answers to these questions will determine whether you should start a nonprofit or consider alternatives.

Determine the name of the corporation
A nonprofit organization is usually established as a corporation, and its name can be a valuable asset. The legal name of the corporation must be registered in the state where the corporation is incorporated. In California, the name of a corporation may be adopted by the California Secretary of State if it is not the same as or too similar to an existing name in agency records and is not misleading to the public.

Draft and file the articles of incorporation.
For California, the articles will specify the type of nonprofit corporation being formed. There are three types of nonprofit corporations in California: public benefit, mutual benefit, and religious. The nonprofit public benefit corporation (the focus of this step-by-step guide) is the appropriate choice for a nonprofit organization formed for charitable or public purposes. The articles of incorporation are typically signed by the “incorporator,” who can be only one person, but can also be signed by the initial board of directors if they are named in the articles of incorporation.

Appoint the board of directors.
If the initial directors are not listed in the articles of incorporation, the incorporator can and should appoint the board by written action.

Develop a charter and conflict of interest policy.
A corporation’s articles of incorporation contain the basic provisions for the management of the corporation’s activities and affairs. The charter should provide guidance to the board and assure government agencies, funders, and other stakeholders of good governance practices.

Take initial board actions at a board meeting or with the unanimous written consent of the directors.