Starting a nonprofit in North Dakota is a lot like starting any type of business. You’ll need to choose a name, file articles of incorporation with the state, and maintain ongoing compliance. But you also need to complete additional steps that for-profit companies don’t: Specifically, you’ll need to apply for 501(c)(3) designation to secure tax exemptions.
This guide will walk you through the specific steps required to set up your nonprofit in North Dakota, including why obtaining 501(c)(3) status is a critical part of the process.
Nonprofit vs. 501(c)(3): What is the difference?
A 501(c)(3) is a federal tax-exempt designation granted by the IRS. Incorporating as a nonprofit, on the other hand, simply creates your organization legally. Not all nonprofits are 501(c)(3)s. Being a nonprofit does not make you tax-exempt.
A North Dakota nonprofit that has filed its articles of incorporation but has not yet submitted Form 1023 can sign contracts, open a bank account, and hire staff, but it cannot issue tax-deductible donation receipts, and it may limit options for qualifying for grants. Federal tax-exempt status unlocks those benefits.
The 501(c)(3) designation covers charitable, religious, educational, and other exempt purposes defined under the Internal Revenue Code. Until the IRS determination letter arrives, your nonprofit exists legally, but not yet federally.
How to start a nonprofit in North Dakota: Step-by-step
Step 1: Choose your nonprofit name
An appropriate name is a required first step for any business registration. But you can’t just use any name you like—your nonprofit name must be distinguishable from every other entity already registered with the North Dakota Secretary of State. It’s wise to check availability before you register your business or invest in a logo, website, or printed materials. You can use the FirstStop Portal Business Search or LegalZoom’s name search tool below.
You’ll also need to make sure your nonprofit name follows the state’s business naming requirements. For example, your name cannot imply a purpose the organization is not authorized to pursue. The Secretary of State can reject a name that misrepresents the organization's activities. Don't commit to a name until your filing has been registered and acknowledged.
North Dakota law does not require nonprofit corporations to include a corporate designator such as "Incorporated," "Corporation," or "Inc.", but including one can help signal that your organization is a formal legal entity.
Free North Dakota Business Name Check
Starting a business? Use our free name check tool to check your business name against existing records in North Dakota.
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.
If your organization plans to operate under a name different from its legal name (sometimes called a trade name, dba, or doing business as), you must register that name separately with the Secretary of State.
Step 2: Appoint a registered agent
Every North Dakota nonprofit must maintain a registered agent—a person or entity designated to receive official legal and government documents—with a physical street address in North Dakota. P.O. boxes do not qualify.
The agent can be an individual North Dakota resident or a professional registered agent service authorized to do business in the state.
Don't treat this as a formality. Failure to maintain a registered agent can result in involuntary dissolution of your corporate charter. If your agent moves or resigns, notify the Secretary of State promptly. LegalZoom offers registered agent services for nonprofits, which can be a practical option.
Step 3: Recruit your board of directors
Directors set policy, provide financial oversight, and hold the organization accountable to its mission. North Dakota typically requires three directors, with exceptions for nonprofit corporations that only have one or two members with voting rights.
You’ll also need officers to handle day-to-day management. North Dakota nonprofit corporations must have at least a president and a secretary, but they can have additional officers, like a treasurer or vice president as well. Whether the same person can hold multiple officer roles depends on your bylaws. Officers will be appointed at your organizational meeting.
Board members of a 501(c)(3) generally cannot receive compensation for board service, though they can be reimbursed for reasonable, documented expenses.
Step 4: File North Dakota articles of incorporation
With your name confirmed, registered agent appointed, and board in place, you're ready to formally create your organization. To do it, file articles of incorporation through the FirstStop Portal. The filing fee is $40.
Under North Dakota's Nonprofit Corporation Act, your articles create the legal foundation for your organization, and the IRS reviews them when you apply for 501(c)(3) status. Missing a required clause here means delays later.
Your articles must include:
- A statement that the corporation is incorporated under North Dakota law
- The name of the corporation
- The complete address of the principal executive office.
- The name of the commercial registered agent, or the name and the complete address of the noncommercial registered agent
- A designation whether the corporation is to be effective when filed with the Office of the Secretary of State or a later specified date (within 90 days after the submission) to the Office of the Secretary of State
- The purpose of the corporation
- The names and addresses of the incorporators
However, there may be additional requirements needed to obtain 501(c)(3) status that aren’t included in the North Dakota Secretary of State’s online templates, such as a dissolution clause or inurement statement. For most founders seeking 501(c)(3) status, self-drafting the articles—or getting LegalZoom to draft them for you—is the smarter choice.
Online filings are typically processed within three to seven business days. Keep the stamped confirmation with your permanent records.
Step 5: Draft and adopt nonprofit bylaws
Bylaws govern how your organization runs internally, and the IRS wants to see them before approving your 501(c)(3) application. They are not filed with the state—you adopt them at your organizational board meeting and keep them in your records.
North Dakota law doesn't dictate specific bylaw content, but IRS reviewers look for certain provisions. Your bylaws should address:
- The organization’s name and principal office location
- Mission statement or statement of purpose
- The board of directors, including number of directors, terms, election and removal procedures
- Officer roles and responsibilities (president, secretary, and treasurer at minimum)
- Meeting frequency and notice requirements
- Quorum requirements
- Voting procedures
- A conflict-of-interest policy—the IRS specifically looks for this, and it requires board members to disclose financial interests that could influence their decisions.
- Compensation policy for officers and employees
- Amendment procedures
- Dissolution procedures
Step 6: Obtain an EIN
An employer identification number (EIN) is a federal tax ID issued by the IRS. You need one to open a bank account, hire employees, and submit your 501(c)(3) application. EINs are free and the IRS website issues them immediately.
Apply after the Secretary of State approves your articles. The IRS application asks for your state of incorporation and formation date—information you won't have until the state processes your filing.
Step 7: Apply for federal 501(c)(3) tax-exempt status
With state incorporation complete, governance documents in order, and your EIN in hand, you're ready to file with the IRS. You'll file either Form 1023 or Form 1023-EZ, both submitted electronically through Pay.gov.
- Form 1023-EZ is available to organizations projecting average annual gross receipts under $50,000 and total assets under $250,000. The fee is $275.
- Form 1023 is required for all others. Hospitals, schools, churches, housing providers, and foundations must file the full form regardless of size. The fee is $600.
Form 1023-EZ is faster and cheaper, but requires less program documentation. Some grant funders prefer the fuller record created by a standard Form 1023, so it’s important to keep that in mind before choosing.
Form 1023-EZ applications are typically processed within two to four weeks. Full Form 1023 applications take considerably longer. Check the IRS website for current processing times before you file.
When the IRS approves your application, it issues a determination letter, which is your official proof of 501(c)(3) status. Keep it permanently.
If you submit your 501(c)(3) application within 27 months of incorporating, the IRS will recognize your tax-exempt status as retroactive to your incorporation date. Donations received during the review period will be tax-deductible once the determination letter arrives.
North Dakota nonprofit tax exemption: State income, sales, and property tax
Your IRS determination letter unlocks federal tax-exempt status but doesn't automatically resolve every state-level tax obligation. North Dakota treats income, sales, and property tax differently, and each has its own rules and agency.
State corporate income tax
Once you obtain your IRS determination letter, your organization is automatically exempt from North Dakota corporate income tax. No separate application is necessary.
There is one exception: If your organization generates unrelated business taxable income (UBTI), revenue from activities unrelated to your exempt purpose, it must file a North Dakota corporate income tax return for that income.
State sales tax
North Dakota does not exempt nonprofit organizations from sales tax as a blanket matter. Holding a 501(c)(3) determination letter alone does not entitle you to purchase goods tax-free.
Qualifying categories include government entities, federally chartered corporations, public and private nonprofit schools, hospitals and nursing homes, qualifying voluntary health organizations, and qualifying senior citizen organizations. If your organization doesn't fit a listed category, you will generally owe sales tax on purchases even with a federal 501(c)(3). Contact the Office of State Tax Commissioner if you're unsure.
Property tax
Property tax is administered at the county level, and organizations that own property used directly for exempt purposes may qualify, but approval comes from the county assessor. If your nonprofit owns or plans to acquire real property, contact your county assessor's office or a local attorney.
Charitable solicitation registration in North Dakota
If your organization plans to raise money from the public, North Dakota imposes a separate registration requirement regardless of your incorporation status or IRS determination letter. This requirement applies to most organizations, with exceptions, and includes those based outside North Dakota that target North Dakota donors.
A charitable organization cannot solicit until registration is approved and on file. Don't launch a crowdfunding campaign or donation drive while your registration is pending.
Annual report and ongoing compliance for North Dakota nonprofits
Your formation filings and IRS determination letter open a new set of recurring obligations. Missing them carries real consequences, including late fees, loss of good standing, administrative dissolution, and in the most serious cases, automatic revocation of federal tax-exempt status.
North Dakota nonprofit annual report
Nonprofit corporations must file an annual report with the Secretary of State on or before February 1 each year. The filing fee is $10, submitted through the FirstStop Portal. The report requires you to update your business mailing address, business activities, and stakeholders. It does not require audited financial statements.
For newly formed organizations, the first annual report is due in the year following the date your organization began as stated in your articles. If a nonprofit does not file the past-due report within one year, it will be involuntarily dissolved.
IRS Form 990: Federal annual information return
A North Dakota annual report helps you stay compliant with the state, but nonprofits must also file annual information reports with the federal government.
Which form you file depends on your organization's financial activity.
- Form 990-N (e-Postcard). For organizations with annual gross receipts of $50,000 or less.
- Form 990-EZ. For organizations with gross receipts under $200,000 and total assets under $500,000.
- Form 990. For organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more.
Your return is due on the 15th day of the fifth month after your accounting year ends, or May 15 for calendar-year organizations. An automatic six-month extension is available, but it only delays the deadline.
If an organization fails to file any required 990-series return for three consecutive years, the IRS automatically revokes its tax-exempt status. Reinstatement requires reapplying and paying the applicable user fee again. The IRS does not send reminder notices before revoking status.
Charitable organization annual report
If your organization registered for charitable solicitation, the Charitable Organization Annual Report is due September 1 each year with a $10 fee. Missing it causes your registration to go inactive, and will put a hard stop on fundraising.
How much does it cost to start a nonprofit in North Dakota?
The total cost to start your nonprofit will depend on a variety of factors, such as the size of your nonprofit, the type of 501(c)(3) filing you choose, and whether you solicit donations.
For a small organization qualifying for Form 1023-EZ, minimum government filing costs are approximately $340: $40 for your articles of incorporation, $275 for the IRS application, and $25 for charitable solicitation registration.
A larger organization filing the full Form 1023 with a professional registered agent can expect $965 or more in the first year: $40 for filing articles of incorporation, $600 for the IRS application, $25 for charitable solicitation registration, and $100–$300 for a registered agent service.
These figures cover only government and statutory fees, not attorney fees, accountant costs, bylaws drafting, or other professional help.
How LegalZoom can help you start your North Dakota nonprofit
LegalZoom has helped hundreds of thousands of businesses and nonprofits get off the ground. We can handle the foundational steps for your North Dakota nonprofit, including filing your articles of incorporation, securing a registered agent, and obtaining your EIN.
If coordinating state filings, IRS applications, and governance documents feels like a lot to manage on your own, LegalZoom offers support at each step, from formation through ongoing compliance.
North Dakota nonprofit FAQs
What is the 33% rule for nonprofits?
The "33 percent rule" is the IRS public support test that keeps most 501(c)(3) organizations classified as public charities rather than private foundations. Passing it means at least one-third of your nonprofit's total support over a rolling five-year period must come from public sources or mission-related program revenue. Failing the test could result in reclassification as a private foundation, which is subject to stricter operating restrictions and excise taxes.
New nonprofits get a grace period: During an organization's first five years, it does not have to pass the public support test to maintain tax-exempt status.
Can I pay myself a salary from my North Dakota nonprofit?
Yes. A founder or executive director can receive a salary for work they actually perform. Compensation must reflect fair market value for the services provided, comparable to what others in similar positions at comparable organizations earn. The board of directors decides on compensation, and the decision must be thoroughly documented.
What the IRS prohibits is private inurement: using the organization's earnings to privately enrich an insider beyond reasonable pay for real services rendered.
Does a North Dakota nonprofit need to register with the Attorney General?
No. Charitable solicitation registration is administered by the Secretary of State, not the Attorney General. The Attorney General can audit and investigate charitable organizations, but your registration filing goes to the Secretary of State.
Can a North Dakota nonprofit apply for grants before receiving 501(c)(3) status?
Most private foundations and government grant programs require a current IRS determination letter before awarding grants. Some funders will accept a fiscal sponsorship arrangement as an alternative while the application is pending. Your organization can accept donations during the review period, and if you applied within 27 months of incorporating, those donations will be retroactively tax-deductible once the determination letter arrives.
Is it better to have an LLC or a nonprofit?
A limited liability company is a for-profit entity designed to generate returns for its owners. A nonprofit corporation is designed to advance a public or charitable mission; it cannot distribute profits to founders or members, and its assets must remain dedicated to the organization's exempt purpose.
If your goal is to earn personal income from a business, an LLC is the appropriate structure. If your goal is to serve a charitable, educational, or religious mission and you want access to tax-deductible donations and grant funding, a nonprofit corporation is the right choice. The two structures are not interchangeable.
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