Setting up a 501(c)(3) nonprofit generally costs between about $300 and $1,000 if you handle the paperwork yourself, and $3,000 to $6,000 if you hire a lawyer to walk you through it. The two fees you can’t avoid are a state incorporation filing and the IRS application user fee. Everything else depends on your state, your organization’s size, and how much professional help you want.
The Two Fees You Can’t Skip
Before the IRS will look at your tax-exempt application, you need a legally recognized entity. For most founders that means filing articles of incorporation with your state’s Secretary of State. Fees vary by state and tend to be modest: some states charge nothing, others charge $10 to $75 for a basic filing, and a few with sliding-scale structures can charge more for larger organizations. Most small nonprofits pay under $100 at this stage.
The second unavoidable cost is the IRS user fee to process your 501(c)(3) application. It’s a one-time payment of either $275 or $600 depending on which form you file, paid at submission through Pay.gov using a bank account, credit card, or debit card. Paper filings and checks are no longer accepted.1Internal Revenue Service. Form 1023 and 1023-EZ: Amount of User Fee
You’ll also need an Employer Identification Number from the IRS, even if you have no employees. The EIN is free when you apply directly on the IRS website, and online applications are processed immediately. The IRS specifically warns against third-party websites that charge for this.2Internal Revenue Service. Get an Employer Identification Number
Which IRS Form You File Decides the Biggest Fee
The two application forms carry very different price tags:
- Form 1023, the full-length application required for most organizations, costs $600.
- Form 1023-EZ, the streamlined version for smaller nonprofits, costs $275.
To use Form 1023-EZ, you have to pass an eligibility worksheet in the form’s instructions. The main financial thresholds: annual gross receipts cannot have exceeded $50,000 in any of the past three years, you cannot project they’ll exceed $50,000 in any of the next three years, and total assets cannot exceed $250,000.3Internal Revenue Service. Instructions for Form 1023-EZ (Rev. January 2025) Several other disqualifying factors exist beyond the financial limits, including certain organization types such as churches, schools, and hospitals. A “yes” to any question on the worksheet means you file the full Form 1023 instead.
The full Form 1023 asks for a lot more documentation: a copy of your articles of incorporation, a detailed description of planned activities, financial projections or actual financial data, and information about compensation for officers and key employees.4Internal Revenue Service. Exempt Organizations – Organizing Documents Form 1023-EZ is largely a checklist of attestations with no attachments.
When It’s Worth Paying a Lawyer
You don’t have to hire a lawyer or accountant to file for 501(c)(3) status. Many founders do anyway, especially for the full Form 1023, because the application asks nuanced questions about activities, governance, and finances, and wrong answers can mean delays or denial.
Attorney fees for nonprofit formation typically run $150 to $400 per hour, and many firms offer flat-fee packages that bundle state incorporation, drafting bylaws, and preparing the IRS application. Those packages generally land in the $2,500 to $5,000 range for a straightforward organization. Complex situations involving unusual activities, international operations, or significant assets cost more. Some firms and legal clinics offer pro bono or reduced-fee services to new nonprofits, which is worth asking about before committing to full-price representation.
If you qualify for Form 1023-EZ, the application is simple enough that most founders handle it themselves. The math shifts with the full Form 1023, where professional guidance can prevent the kind of errors that trigger IRS follow-up letters and months of additional delay.
Other Startup Costs People Forget
Registered Agent
Most states require your nonprofit corporation to maintain a registered agent with a physical in-state address. A director or officer can serve at no cost. If you’d rather use a commercial service, expect $50 to $300 per year. This is a recurring annual expense, not a one-time fee.
Charitable Solicitation Registration
Most states require nonprofits to register before soliciting donations from residents. This is a separate filing from your state incorporation, and fees vary widely. Many states charge $50 or less for initial registration, though some use sliding scales based on fundraising revenue that push costs higher. If you plan to fundraise across state lines, you may need to register in multiple states, multiplying the cost and paperwork.5Internal Revenue Service. Charitable Solicitation – State Requirements
Federal Grant Registration
If you plan to apply for federal grants, you’ll register in the System for Award Management (SAM.gov) and get a Unique Entity ID. Both are free. Watch out for third-party services that charge hundreds of dollars for a registration you can complete yourself at no cost.6SAM.gov. Entity Registration
Build In Ongoing Costs Too
Startup fees aren’t the end of it. Keeping your tax-exempt status requires annual filings, and these recurring costs catch many new nonprofits off guard.
Every 501(c)(3) files an annual information return with the IRS. Which one depends on your size:
- Form 990-N, the “e-Postcard,” for organizations with gross receipts normally $50,000 or less. Free electronic filing.
- 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.
The IRS doesn’t charge to file these returns, but organizations submitting the full Form 990 or 990-EZ often pay an accountant to prepare them, which adds to annual operating costs.7Internal Revenue Service. Form 990 Series: Which Forms Do Exempt Organizations File
Skipping these filings for three consecutive years triggers automatic revocation of your tax-exempt status. Getting it back requires submitting a new application with the full user fee, which effectively charges you the startup cost twice.8Internal Revenue Service. Automatic Revocation – How to Have Your Tax-Exempt Status Reinstated
Most states also require nonprofit corporations to file an annual or biennial report to stay in good standing, and charitable solicitation registrations usually need annual renewal. Fees are generally modest but add up. Missing them can result in administrative dissolution of your corporation, which brings its own reinstatement headaches.
Bottom-Line Numbers
A small nonprofit doing everything without professional help can get set up for roughly $300 to $1,000: state incorporation ($0 to $75 in most states), the IRS application fee ($275 for Form 1023-EZ or $600 for Form 1023), and possibly a registered agent service ($50 to $300 per year).
Add professional help, charitable solicitation registrations in several states, and the time needed to gather documentation, and total startup costs for a mid-complexity organization commonly land in the $3,000 to $6,000 range. Organizations with unusual structures, substantial assets, or plans to operate across many states will spend more. Build the ongoing compliance costs into your first-year budget as well, because tax-exempt status only lasts as long as you keep up with the filings.