Launching a nonprofit can be an incredibly exciting and rewarding experience, especially for passionate changemakers. But, the process can often be hard to navigate, especially if you’re new to the industry.
In this blog, we’ll explain exactly how to start a nonprofit in Colorado, from naming your organization to applying for state tax exemption — and even remaining compliant for years to come.
12 steps to create a nonprofit in Colorado
- Step 1: Identify your mission and purpose
- Step 2: Name your organization
- Step 3: Recruit a leadership team
- Step 4: Appoint a registered agent
- Step 5: File the Articles of Incorporation
- Step 6: Obtain an EIN
- Step 7: Run a board meeting and establish bylaws
- Step 8: Apply for federal tax-exempt status
- Step 9: Apply for Colorado State Tax Identification
- Step 10: Apply for state tax exemption
- Step 11: Start fundraising
- Step 12: Stay compliant
Step 1. Identify your mission and purpose
Before you start the paperwork, it's crucial to have a clear understanding of your organization's mission and purpose. To help our brainstorming, consider the answer to questions like:
- What issue or cause are you passionate about?
- What specific goals do you hope to achieve with your nonprofit?
- What resources are lacking in communities in need?
- How will this organization help those in need?
- Are there organizations in my community already doing this work?
- What needs are going unmet in my community that other organizations aren’t addressing?
Once you’ve answered these questions, you can begin to think about your mission, vision, and overall objectives for starting your nonprofit in Colorado.
Step 2. Name your organization
Once you’ve determined your organization’s core mission and goals, it’s time to name your nonprofit. Not only is this step for marketing and branding purposes, but it’s also a crucial part of the legal process of starting a nonprofit in Colorado.
When deciding on your organization's name, be sure to choose a name that:
- Reflects your mission and goals
- Describes what you aim to do
- Is easy to spell and pronounce
- Offers room for future growth
Then, once you’ve found a name, be sure to search it on the Colorado Secretary of State’s website. Make sure it's not already in use by another organization in Colorado, and reserve it if possible.
Step 3. Recruit a leadership team
Once you’ve determined your organization name and confirmed that it is not already in use, it’s time to create a leadership team.
Identifying an Incorporator and a Board of Directors is not only a strategic decision that can help make your nonprofit a success, but it’s a required one in Colorado.
- Incorporator: Nonprofits must recruit at least one Incorporator who will be responsible for signing the Articles of Incorporation.
- Directors: You must assemble a board of at least three directors who will help guide your nonprofit through strategic decision-making. You’ll need to appoint a president, a secretary, and a treasurer, who are all 18 years or older
When choosing your leadership team, be sure to select people who are trustworthy, dependable, and bring a skillset to the table. Whether they’re already a member of your organization or a trusted volunteer, they’ll help you make crucial decisions about your charity.
Step 4. Appoint a registered agent
Appointing a registered agent is a vital step when forming a nonprofit in Colorado. In essence, a registered agent acts as a reliable point of contact for legal matters. This designated individual receives important documents and official correspondence on behalf of your nonprofit, such as legal notices and tax forms.
The registered agent must be located in the state of Colorado and available during regular business hours in order to receive legal correspondence.
Step 5. Files Articles of Incorporation
One of the most crucial steps in starting a nonprofit in Colorado is filing the Articles of Incorporation on the Colordao Secretary of State website. In doing so, you’ll officially establish your nonprofit as a legal entity in the state.
Step 6. Obtain an EIN
In Colorado, like in other states, nonprofits are required to obtain an EIN, or Employer Identification Number. An EIN is like your organization's social security number. It's used for tax purposes, including opening bank accounts, hiring employees, and applying for tax-exempt status.
To get an EIN, you can apply online using the IRS Form SS-4 on the IRS website or submit it by mail. The application process is free, and you'll receive your EIN shortly upon approval.
Step 7. Run a board meeting and create bylaws
Next, you’ll need to call a meeting with your board to draft bylaws that align with your mission and comply with Colorado nonprofit laws.
Bylaws are the rules and procedures that govern how your nonprofit operates. They outline the structure of your organization, the responsibilities of the board and officers, how meetings will be conducted, and how decisions will be made.
It's important to ensure that these bylaws accurately reflect your nonprofit's mission, values, and goals. Once the board finalizes and approves them, they should be formally adopted during all organization meetings.
Step 8. Apply for federal tax-exempt status
Once you’ve created your bylaws, you’ll need to apply for both federal and state tax exemption.
Depending on your organization's size and financial activities, you'll need to complete either Form 1023 or Form 1023-EZ. The filing fee for Form 1023 is $600, while the fee for Form 1023-EZ is $275.
Step 9. Apply for Colorado State Tax Identification
Next, you’ll need to apply for a Colorado State Tax Identification account through the Colorado Department of Revenue Website. The application for filing can be found here.
Step 10. Apply for state tax exemption
To apply for state tax exemption, you'll need to register with the Colorado Department of Revenue and obtain a sales tax exemption certificate. This certificate allows your nonprofit to make tax-exempt purchases for activities directly related to your mission.
Step 11. Start fundraising
Once you’ve filed all of the appropriate forms and established the necessary regulatory foundation for your nonprofit, it’s time to start fundraising.
One of the best ways to start your nonprofit, and begin bringing in funds and connecting with donors, is by using a free all-in-one donation platform, designed specifically for charities. Unlike other platforms, Zeffy offers free marketing and engagement features, event ticketing and management, raffle and auction tools, and so much more — without charging nonprofits a cent.
So not only can nonprofits start fundraising in minutes, but they don’t have to pay any upfront, monthly, or hidden fees, ever. In fact, over 10,000 nonprofits use and love Zeffy for its powerful but simple — and always free — software designed to help make the world a better place.
Step 12. Stay compliant
As a legal nonprofit in the state of Colorado, you’ll need to remain compliant with federal and state rules and regulations throughout the year. This includes:
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Learn how this Colorado nonprofit raised over $500k for free
The Get Grounded Foundation is a Colorado nonprofit that supports youth mental health awareness, funding critical mental health support for children. Their efforts support mobile food pantry programs, trauma-informed yoga programs, mental health support by and for LGBTQ+ youth, art therapy, and even dog and equine-assisted therapy. But in order to keep these programs running, and to continue making an impact, Get Grounded relies on contributions from donors who are touched by their story.
To do this, Get Grounded needed a simple but powerful online donation solution that would allow supporters to contribute to their mission throughout the year. In particular, they needed a mobile-friendly and user-friendly donation form that would offer donors the ability to give as much or as little as they want, and receive automatic donation receipts following their gift. Plus, they wanted to ensure that most, if not all, of donors' contributions went straight to their programs and efforts — and not to processing fees.
That’s when Get Grounded found Zeffy, the 100% fee-free all-in-one fundraising platform.
Since partnering with Zeffy in 2023, Get Grounded has launched four donation campaigns, from Sam Aden Kindness Fund to Sam’s Day of Stoke. With all of these campaigns, Get Grounded has been able to raise over $500,000 for its programs — without having to pay a single processing fee.
Not only was Get Grounded able to create donation forms in just a few clicks, they were able to promise supporters that 100% of their contributions would go right to their cause — and not a cent less.
How to start a nonprofit in Colorado FAQs
How much does it cost to start a nonprofit in Colorado?
The cost of starting a nonprofit in Colorado can vary. However there are a few common costs to be aware of:
- Filing fees: These fees typically range from $50 to $100, depending on the type of organization and the method of filing.
- Legal fees for drafting articles of incorporation and bylaws: If you choose to hire legal counsel, fees can vary depending on the complexity of your nonprofit's structure and governing documents.
- IRS application fee for tax-exempt status: If you're applying for federal tax-exempt status under section 501(c)(3) of the Internal Revenue Code, the IRS application fee ranges from $275 to $600, depending on the type of application (Form 1023 or Form 1023-EZ).
How many board members are required for a nonprofit in Colorado?
In Colorado, nonprofit organizations are required to have at least three board members. However, it's generally recommended to have a larger board to bring diverse perspectives, skills, and expertise to the organization.
How do I start a nonprofit with little money?
Starting a nonprofit organization with no money requires strategic planning. To cut down on costs, consider:
- Using volunteers: Leverage volunteers for administrative, fundraising, or program work, to reduce the need for paid staff.
- Seeking out in-kind donations and grants: Ask for donations of goods and services from businesses, individuals, or other organizations to support your nonprofit's activities (think office space or equipment). And, research grant opportunities to generate free financial support for your nonprofit's mission.
- Leveraging partnerships: Look for potential partners, such as other nonprofits or community organizations, who might want to collaborate on shared goals.
- Taking advantage of free tools and platforms: Be sure to use fundraising and donor engagement tools that are completely free to use, like Zeffy. That way, you’ll never have to worry about hidden fees and can get started making an impact right away — without paying a cent.
How do I pay myself as a nonprofit founder?
Here are some ways nonprofit founders can pay themselves:
- Salary or wages: Nonprofit founders can receive a salary or hourly wages for their services, similar to employees of the organization.
- Reimbursement for expenses: Nonprofit founders can be reimbursed for reasonable and necessary expenses incurred in the course of their duties, such as travel expenses, office supplies, and professional development costs.
- Consulting or contractual arrangements: Nonprofit founders may enter into consulting or contractual agreements with the organization to provide specific services or expertise on a project basis.
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Simple and powerful — and packed with free support whenever you need it — Zeffy ensures that your donor’s gifts are going right to the cause, and nowhere else.
