Starting a nonprofit in Delaware means navigating distinct legal processes in the right order. First, you need to incorporate with the state. Second, you need to apply to the IRS for 501(c)(3) status, which is the federal designation that makes your organization tax-exempt and allows donors to deduct their contributions.
This guide covers how to start a nonprofit in Delaware, including an overview of all seven formation steps, such as choosing your name and filing your certificate of incorporation to drafting bylaws, obtaining an employer identification number (EIN), and submitting your IRS exemption application.
Overview of how to start a nonprofit in Delaware
- Incorporating a nonprofit in Delaware and obtaining 501(c)(3) tax-exempt status are two separate processes. State incorporation comes first.
- Delaware requires at least one director and a registered agent with a physical Delaware address.
- You must file a certificate of incorporation with the Delaware Division of Corporations and pay a minimum $109 filing fee before taking any other formation steps.
- After incorporating, you apply for federal tax-exempt status using IRS Form 1023 or the streamlined Form 1023-EZ, depending on your projected annual gross receipts.
- Delaware corporate income tax exemption follows automatically from your federal 501(c)(3) determination, and other states may require charitable solicitation registration if you fundraise there.
Nonprofit vs. 501(c)(3)
A nonprofit corporation is a legal entity you create by filing with the Delaware Division of Corporations. 501(c)(3) status is a federal tax-exempt designation the IRS grants separately. One does not automatically grant the other. In addition, you need both to operate as a fully tax-exempt charitable organization.
| State nonprofit corporation | Federal 501(c)(3) status | |
|---|---|---|
| Who grants it | Delaware Division of Corporations | IRS |
| What it does | Legally establishes your organization under Delaware law | Exempts you from federal income tax; allows donors to deduct contributions |
| When you apply | First, before any other step | After incorporating and obtaining an EIN |
| Cost | $109 base filing fee | $275 or $600, depending on the version of Form 1023 |
Special considerations for incorporating a nonprofit in Delaware
Delaware's reputation as a corporate-friendly state is largely built around for-profit companies. The tax and privacy advantages that draw corporations to Delaware generally do not extend to nonprofits. If you operate primarily in a different state, most state governments will require you to file a foreign qualification. In some states, that filing costs more than the initial incorporation itself.
If you incorporate in Delaware but operate in your home state, you’re required to maintain two registered agents, file annual reports in two states, and potentially register for charitable solicitation in both. That compliance burden quickly outweighs any perceived advantage of a Delaware address. For most founders, it likely makes more sense to incorporate where you will primarily operate. If you’re forming a nonprofit to serve your community in Delaware—read on.
How to start a nonprofit in Delaware: Step by step
To start a nonprofit in Delaware, you need to take the steps described below. Each step must happen in sequence. You cannot obtain an EIN or file a federal exemption application until you hold a valid certificate of incorporation.
Step 1: Choose and reserve your nonprofit name
Delaware requires your nonprofit's name to be distinguishable from all existing entities on record with the Division of Corporations. Run a name availability search at the Delaware Division of Corporations website before settling on a name.
Nonprofits are not required to include "Inc." or "Corp." in their name, though they may. Read more in our comprehensive guide to Delaware business names. If you've identified a name but aren't ready to file your certificate of incorporation, you can reserve it for 120 days by paying a $75 reservation fee.
Free Delaware Business Name Check
Starting a business? Use our free name check tool to check your business name against the Secretary of State records.
By clicking "Check Availability," I agree to LegalZoom's Terms of Use. This search is a preliminary check of state databases and does not include variations or trademarks. Results do not guarantee name availability or compliance with legal requirements.
Step 2: Appoint a Delaware registered agent
A registered agent receives legal documents, government notices, and official correspondence on behalf of your organization. Delaware requires every nonprofit corporation to maintain a registered agent with a physical street address in Delaware. This means simply having a P.O. box in the state is insufficient.
You can appoint an individual with a Delaware street address who is available during normal business hours or hire a professional registered agent service. Most founders use a service to ensure reliable coverage and avoid listing a personal address in public state records.
Step 3: Choose your corporation type
Delaware offers two structural options for nonprofits. The most common choice for organizations seeking 501(c)(3) status is the exempt corporation. The alternative is a nonstock corporation, which is a broader category that includes organizations that may or may not seek federal tax-exempt status.
| Exempt corporation | Nonstock corporation | |
|---|---|---|
| IRS compatibility | Designed for 501(c)(3) applicants | Compatible, but requires additional care in drafting articles of incorporation |
| Governance flexibility | Standard nonprofit governance structure | Broader flexibility; used for clubs, associations, and other entities |
| Typical use case | Charitable, religious, educational, and scientific organizations | Membership organizations, homeowners associations, social clubs |
For virtually all founders pursuing 501(c)(3) status, the exempt corporation is the correct choice.
Step 4: File your certificate of incorporation with the Delaware Division of Corporations
You file it with the Delaware Division of Corporations, either online through the eCorp business services portal or by mail. If you apply by mail, you’ll also need to include a cover memo. To submit by mail, send your certificate and payment to:
Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901
The base filing fee is $109 for a one-page document, with an additional $9 per page beyond that. Standard processing by mail takes approximately two to three weeks; online filing is faster, and expedited options are available.
What you include matters as much as filing. Delaware requires the certificate to include the following to approve your nonprofit formation:
- The nonprofit's name (including a corporate designator)
- The registered agent's name and physical Delaware address
- A statement saying whether or not the corporation will have members and the conditions of membership
- The mailing address of your nonprofit
- The incorporator's name and address
The above satisfies Delaware’s needs, but the IRS requires more to approve 501(c)(3) status:
- Exempt purpose statement. A statement that the organization is organized exclusively for one or more purposes described in Section 501(c)(3) of the Internal Revenue Code.
- Private inurement prohibition. A statement that no part of net earnings shall be for the benefit of any private shareholder or individual.
- Lobbying and political activity prohibition. A statement that the organization will not engage in substantial lobbying or intervene in political campaigns.
- Dissolution clause. A statement that upon dissolution, remaining assets will be distributed to another 501(c)(3) or to a government entity for a public purpose.
Step 5: Hold your organizational meeting and adopt bylaws
After your certificate of incorporation is accepted, the incorporators must hold an organizational meeting to formally launch the organization. At the organizational meeting, you must take the following actions:
- Adopt bylaws
- Elect initial directors and officers
- Approve a conflict of interest policy
- Authorize opening a bank account
- Ratify any actions taken before incorporation
To qualify for 501(c)(3) status, your bylaws need to address the following:
- Name, purpose and mission. Be consistent with the language in the articles of incorporation.
- Board composition. Describe the number of directors, term lengths, how vacancies are filled, and how future directors are elected or appointed.
- Officer roles and responsibilities. Describe the roles and responsibilities of designated officers within the nonprofit. Delaware requires
- Meeting procedures. Propose the frequency, quorum requirements, and how meetings can be called.
- Notice requirements. Include the advance notice required to set a meeting.
- Voting procedures. Establish vote thresholds for major decisions.
- Conflict of interest policy. This policy should require directors and officers to disclose personal financial interests that could conflict with the organization's interests.
- Amendment procedures. Detail what steps need to be taken to amend your nonprofit bylaws.
- Dissolution procedures. These must be consistent with the dissolution clause in your articles.
Bylaws are not filed with the Delaware Division of Corporations, but the IRS will request them as part of the Form 1023 application. They must be complete and properly adopted before you file for federal tax-exempt status. For detailed guidance, check out LegalZoom's guide to how to write nonprofit bylaws.
Step 6: Get an EIN for your Delaware nonprofit
An EIN is your nonprofit's federal tax identification number. You need it to open a bank account, hire employees, and file your IRS exemption application. Apply after incorporating but before filing Form 1023. You can apply easily online, and there is no cost or waiting period. Once you request an EIN, the IRS will generate the number right away.
Step 7: Apply for federal 501(c)(3) tax-exempt status
Your certificate of incorporation creates a nonprofit corporation. It does not make your nonprofit tax-exempt, as federal tax-exempt status requires a separate IRS application. The form you use is not your choice—it depends on your organization's projected size.
| Form 1023 | Form 1023-EZ | |
|---|---|---|
| Who qualifies | All 501(c)(3) applicants | Organizations projecting gross receipts ≤ $50,000/year and assets ≤ $250,000 |
| IRS user fee | $600 | $275 |
| Typical processing time | 3–6+ months (or longer) | 2–4 weeks |
| Narrative required | Yes, make sure to include detailed program descriptions | No |
No matter the form, it can be completed online at pay.gov. When the IRS approves your application, it issues a determination letter. If you file within 27 months of your incorporation date, the determination is retroactive to the date of incorporation, meaning donations received before your approval letter arrived are still tax-deductible.
Delaware state tax exemption and charitable solicitation
Any corporation the IRS gives 501(c)(3) status to is automatically exempt from Delaware corporate income tax. You don't need a separate state application. The IRS determination letter triggers the Delaware exemption.
Delaware does not require registration of charitable solicitations. It is one of approximately 11 states with no pre-solicitation registration requirement, whether the organization is based in Delaware or out of state. That does not mean you can solicit without any obligations. Delaware law requires specific disclosures during fundraising, which generally include the following:
- Identify your organization by name
- Identify the purpose for which funds are being collected
- Be prepared to explain how donations are divided between administrative costs and charitable use
All state laws applicable to fraud apply to charitable solicitation activity, and violations can result in civil or criminal prosecution.
If you operate in multiple states
Delaware's lack of a registration requirement only covers activity within Delaware. Other states may require registration before you solicit there, with annual renewal obligations. Failing to stay current can result in fines and loss of the ability to operate in that state. Review multi-state fundraising compliance with an experienced nonprofit attorney if your donor base crosses state lines.
Delaware nonprofit ongoing compliance
Formation is a one-time event, but staying compliant with state and federal law is an ongoing commitment. In fact, missing a deadline can cost your nonprofit its good standing or, at the federal level, its tax-exempt status.
Delaware annual report
All Delaware corporations must file an annual report. Exempt domestic corporations pay no franchise tax but must still file. The fee is $25, and the report must be received by March 1 each year, filed online through the Delaware eCorp portal.
Your first annual report is due in the calendar year following your initial incorporation.
The report confirms your principal address, the nature of your activities, and your registered agent's information. Delaware corporations cannot list their registered agent's address as their principal address.
Missing the March 1 deadline carries real consequences. Failure to file results in a $200 penalty plus 1.5% monthly interest. If your organization remains delinquent, the state will notify you by November 1 of its intent to administratively dissolve your organization, which can be a costly and complicated problem to fix if your nonprofit is actively accepting donations or holding contracts.
Federal Form 990
Most tax-exempt organizations must file an annual return with the IRS. Which form depends on gross receipts:
- Form 990-N (the "e-Postcard"): annual gross receipts under $50,000.
- Form 990-EZ: annual gross receipts between $50,000 and $200,000.
- Form 990: annual gross receipts over $200,000 or total assets over $500,000.
The return is due on the 15th day of the fifth month after the end of your fiscal year—May 15 for calendar-year nonprofits. A six-month extension is available by filing Form 8868 before the due date.
Confirm which form applies each year. If an organization files Form 990-N when gross receipts exceed $50,000, the IRS does not treat it as a valid return, and filing the wrong version is treated the same as not filing at all.
An organization that fails to file the required return for three consecutive years automatically loses its tax-exempt status, with revocation taking effect on the filing due date of the third year. Reinstatement requires a new exemption application and the full IRS user fee.
For guidance on keeping your status current, see LegalZoom's article on maintaining tax-exempt status in a nonprofit.
Ongoing solicitation compliance
If your nonprofit solicits in other states, those states' charitable solicitation registration requirements will need renewal as well. Make sure to track these deadlines separately, since they are governed by each state where you fundraise, not Delaware law.
How LegalZoom can help
LegalZoom can handle the nonprofit formation paperwork, including Delaware nonprofit corporation formation, 501(c)(3) application preparation, and registered agent services, so you can focus on building your organization.
Customers have rated LegalZoom's formation services 4.6 out of 5 stars across more than 30,000 reviews. When you're ready to move from planning to filing, start your Delaware nonprofit corporation with the help of LegalZoom.
FAQs on Delaware nonprofits
Can I pay myself a salary if I start a nonprofit?
Yes. Founders and employees can receive reasonable compensation for services rendered. The IRS requires that compensation be "reasonable and not excessive" compared to what similar organizations pay for similar roles. The board determines and approves compensation, not the founder themselves.
Can a Delaware nonprofit apply for grants before receiving 501(c)(3) status?
Most private foundations and government grant programs require a determination letter before awarding funds. Some funders will accept a fiscal sponsorship arrangement, where an existing 501(c)(3) receives and administers grant funds on your behalf while your application is pending.
Because IRS approval is retroactive to your incorporation date if filed within 27 months, your organization's eligibility period begins at incorporation, not at approval.
What is a Delaware exempt corporation vs. a nonstock corporation?
An exempt corporation is purpose-built for charitable, religious, educational, and scientific organizations seeking 501(c)(3) status. A nonstock corporation is a broader category that includes membership organizations, homeowners associations, and social clubs that may or may not seek federal tax-exempt status.
What must Delaware nonprofit bylaws include?
Bylaws must address the organization's name and purpose, principal office location, board composition and terms, officer roles and duties, meeting frequency and quorum requirements, voting procedures, amendment procedures, and a conflict of interest policy. Bylaws are not filed with the state but are required by the IRS as part of the Form 1023 application.
How long does it take to get 501(c)(3) status after incorporating in Delaware?
Form 1023-EZ typically takes two to four weeks. Form 1023 takes three to six months, though complex applications can take longer. Delaware incorporation takes approximately two to three weeks by mail. Generally speaking, online filing is faster. From first filing to IRS determination letter, budget between three to seven months for the complete process.
'%20/%3e%3c/svg%3e)
'%3e%3cpath%20fill-rule='evenodd'%20clip-rule='evenodd'%20d='M9.31239%2025.5316H13.0679V14.1032H9.31239V25.5316ZM11.1913%208.46875C9.93945%208.46875%209%209.25086%209%2010.505C9%2011.5995%209.78211%2012.5389%2011.1913%2012.5389C12.6005%2012.5389%2013.3826%2011.5995%2013.3826%2010.505C13.3826%209.4082%2012.6005%208.46875%2011.1913%208.46875ZM27%2018.9577V25.5316H23.2445V19.4275C23.2445%2017.8609%2022.6174%2016.7664%2021.3679%2016.7664C20.2711%2016.7664%2019.644%2017.5463%2019.3316%2018.1756C19.1743%2018.488%2019.1743%2018.8004%2019.1743%2019.1128V25.5316H15.4165V13.9458H19.1743V15.5123C19.644%2014.7302%2020.5835%2013.6357%2022.6174%2013.6357C25.1234%2013.7908%2027%2015.3573%2027%2018.9577Z'%20fill='white'/%3e%3c/g%3e%3cdefs%3e%3cclipPath%20id='clip0_952_9489'%3e%3crect%20width='18'%20height='18'%20fill='white'%20transform='translate(9%208)'/%3e%3c/clipPath%3e%3c/defs%3e%3c/svg%3e)
