How to Start a Nonprofit in South Carolina

Read more in our comprehensive guide to choosing a name in South Carolina.

Step 2: Appoint a registered agent

Every South Carolina nonprofit must maintain a registered agent with a physical street address in the state (a P.O. box is not sufficient). The agent can be an individual who lives in the SC or a business entity authorized in the state. They receive legal notices and official correspondence on behalf of the corporation. You can serve as your own registered agent if you have a physical South Carolina address and are consistently available during business hours.

Step 3: File articles of incorporation 

Articles of incorporation for your South Carolina nonprofit are what officially establishes your entity with the state. You can file online or by mail for a $25 fee. Online submissions are typically processed within 24 hours, but mailed filings take longer.

South Carolina also mandates an additional attachment for nonprofits seeking 501(c)(3) status. This additional form must be completed and attached to your articles. You can find both forms online.

However, it’s important to note that neither the standard articles of incorporation template or the 501(c)(3) attachment includes everything the IRS needs to secure your 501(c)(3) status. In addition to these two forms, you’ll also need to include:

1. A specific charitable purpose statement. Stating the organization is formed "for charitable purposes" is sufficient for most organizations, but naming a more specific purpose (education, religious worship, scientific research) gives the IRS clearer confirmation.
2. A prohibition on private inurement. Confirm that no part of net earnings benefits any private individual or insider.
3. A dissolution clause. There must be language directing assets to be distributed "for one or more exempt purposes within the meaning of Section 501(c)(3)." If you name a specific beneficiary, include fallback language in case that organization no longer qualifies at dissolution.

Omit any one of these and the IRS will reject your 501(c)(3) application. You can draft these additions yourself, or hire a professional service, like LegalZoom, to help you.

Step 4: Get an EIN for your nonprofit

An employer identification number (EIN) is a nine-digit tax ID number the IRS assigns to your organization. Apply through the IRS website at no cost; the IRS issues your EIN immediately upon completion. You need it before opening a bank account, hiring anyone, or filing for 501(c)(3) status.

Step 5: Draft nonprofit bylaws and adopt a conflict-of-interest policy

The IRS reviews your bylaws as part of your tax-exemption application. Strong bylaws should cover:

• Board size and composition. How many directors serve and how they are selected.
• Officer roles. At minimum, President, Secretary, and Treasurer. Two or more offices can be held by the same individual.
• Quorum requirements. The minimum number of directors needed to conduct official business.
• Voting procedures. How decisions are made and what constitutes a passing vote.
• Meeting frequency. How often the board meets and how meetings are called.
• Amendment procedures. How the bylaws can be changed.
• Conflict-of-interest policy. A written policy requiring board members and officers to disclose personal financial interests in matters before the board and to recuse themselves from the vote.

The IRS specifically requests a conflict-of-interest policy in Form 1023. Beyond the IRS requirement, it protects the organization from self-dealing transactions that could jeopardize tax-exempt status and expose board members to personal liability.

Step 6: Hold your organizational meeting

You must provide evidence of your organizational meeting minutes and corporate bylaws when you file for tax-exempt status with the IRS. You adopt bylaws at your organizational meeting and can also use this first official meeting to:

• Elect officers
• Authorize opening a bank account (most banks require a board resolution)
• Ratify any actions taken before the corporation was formally organized

Step 7: Apply for federal 501(c)(3) tax-exempt status

To apply for tax-exempt status with the IRS, you’ll file either Form 1023 ($600) or Form 1023-EZ ($275). Most nonprofits file Form 1023, and you should only file Form 1023-EZ if you reasonably expect annual gross receipts of $50,000 or less and total assets under $250,000. Churches, schools, and hospitals are not eligible for Form 1023-EZ regardless of size.

Both forms must be submitted online. Include your articles of incorporation with the 501(c)(3) attachment, bylaws, conflict-of-interest policy, and a description of your programs and activities.

Form 1023-EZ applications are typically processed in two to four weeks, but full Form 1023 applications typically take about six months. Once approved, you’ll receive a determination letter, which unlocks grant eligibility, donor tax deductions, and the state exemptions listed in the next two steps.

Step 8: Apply for South Carolina state tax exemptions

Federal 501(c)(3) status does not automatically extend to South Carolina. You must apply to the South Carolina Department of Revenue separately for state income tax exemption and sales tax exemption.

Both applications require your IRS determination letter as a prerequisite.

Step 9: Register for charitable solicitation before fundraising

Even with 501(c)(3) status and state tax exemptions in place, you cannot legally solicit donations in South Carolina until you complete this registration. The requirement comes from South Carolina's Solicitation of Charitable Funds Act and applies whether you solicit online, by mail, at events, or through any other channel.

1. File a registration statement for a charitable organization with the SC Secretary of State's Charities Division, signed by both your chief executive officer and chief financial officer, along with a $50 fee. Complete this before any solicitation occurs.
2. Submit a financial report. Include the Secretary of State's annual financial report form or IRS Form 990, 990-EZ, or 990-PF. For a brand-new organization, the Secretary of State's office can provide guidance on what to submit.
3. Renew annually within four and a half months after the close of your fiscal year.
4. Check for exemptions. Organizations that do not intend to solicit or receive contributions exceeding $7,500 during a calendar year may qualify for an exemption. If they receive more than this amount, they must register within 30 calendar days.
5. Know the penalty. Late registration carries a fine of up to $2,000. Soliciting without a valid registration also risks loss of the right to fundraise in South Carolina.

Charitable solicitation registration in South Carolina is handled by the SC Secretary of State's Charities Division, not the Attorney General's office. The Attorney General may become involved in enforcement actions against fraudulent solicitation, but your registration obligation runs to the Secretary of State.

How LegalZoom can help

LegalZoom has helped form more than 100,000 nonprofit organizations get off the ground. Our nonprofit formation services can handle all foundational paperwork for you, including coordinating your state and federal filings and continue by your side for annual registrations, compliance calendars, and more. When you’re ready to apply for 501(c)(3) status, our 501(c)(3) filing service can help with that too.

FAQs about South Carolina nonprofits

What is the 33% rule for nonprofits?

The 33% rule, also called the public support test, requires a public charity to receive at least one-third of its total support from public sources—like government grants and contributions from a broad donor base—rather than from a small number of large donors or investment income. This determines whether an organization qualifies as a public charity rather than a private foundation, which carries significantly more IRS restrictions and reporting obligations.

Can I pay myself if I run a nonprofit?

Yes. Founders and executives can receive reasonable compensation for services rendered. The IRS requires that compensation be comparable to what similar organizations pay for similar roles. What nonprofits cannot do is distribute profits or surplus funds to founders or directors as a dividend or ownership return.

Does South Carolina require nonprofits to file an annual report with the Secretary of State?

Corporations typically file an annual report with the Secretary of State that provide updated information about the business such as its address and registered agent information. Nonprofits are exempt from this type of annual report, but they are required to file an annual financial report that details any fundraising activities performed during the previous fiscal year.

Nonprofits that solicit charitable contributions must also renew their charitable solicitation registration annually with the Charities Division. This is a separate requirement that is often confused with a corporate annual report.

How much does it cost to start a nonprofit in South Carolina?

The total cost depends primarily on whether you file Form 1023 or Form 1023-EZ. Adding in the cost to file your articles of incorporation ($25) and your charitable solicitation registration ($50), your cost at minimum will be approximately $350 if filing Form 1023-EZ or $675 if you file the full Form 1023.