Starting a Maine Nonprofit
Starting a Maine Nonprofit Checklist
The following checklist provides basic guidance for how to start nonprofit in Maine. This is not a comprehensive breakdown or a definitive list of rules and requirements; it is intended to provide an overview of one way to start a nonprofit in Maine.
Furthermore, the process is different for each new nonprofit and the order of the items may change or overlap. Depending on the activities of your organization, other steps may be necessary that are not listed here (such as acquiring special licenses or permits or employment documentation).
You may also want to review our answers to frequently asked questions about the process of starting a nonprofit, or consult MANP’s Yellow Pages to find qualified legal assistance.
If you are relocating a nonprofit to Maine that was first incorporated in another state, review this article, which outlines options available to you.
|1||Apply for Reservation of Name||If you have a name in mind that you wouldn’t want to be taken by another group while you organize, you should start with this step. Otherwise, skip to step #2.
|2||Recruit Board Directors||In Maine, your board must include a minimum of 3 individuals. We recommend that your board be made up of at least 5 persons unrelated to each other or to the staff, and often a range of 9 to 15 board directors is sought.|
|3||Determine Your Organization’s Vision, and Draft a Mission Statement||Draft a brief mission statement that describes the organizational purpose of your new organization; your board should review and authorize it during the strategic planning process (see step 8).|
|4||Draft Articles of Incorporation and submit to State||Articles of Incorporation specify a legal description of your organization and the powers given to the board. Not all groups choose to incorporate – see #5 on our Starting a Maine Nonprofit FAQ page for more on this.
|5||Draft Bylaws and Get Board Approval||Bylaws specify how the board will operate and should be approved by the board. If your organization will have members, some of this information will be needed for Step 4.|
|6||Get Financial House in Order||Seek a bank that understands the needs of new, small nonprofits. In order to open a bank account under the name of the organization, you will need an Employer Identification Number (EIN) from the IRS, even if no employees are anticipated. Find an accountant or other finance expert who will help set up a basic bookkeeping system; when you designate a board treasurer, he/she can be helpful in this regard.You should consider which insurances you will need.
|7||Develop Business Plan and Strategic Plan||Once your bylaws are complete, you will want to begin the strategic planning process, including developing a budget, a resource development plan, a business plan, a record keeping system and establishing an accounting system.|
|8||Enact Conflict of Interest Policy and Other Key Governance Policies||Maine and federal laws regulate certain transactions in which conflicts of interest are present. In order to ensure compliance, a conflict of interest policy is strongly encouraged. If the organization will apply for 501(c)(3) status (step #9 below), a conflict of interest policy is especially recommended, as the Form 1023 inquires about the existence of such a policy. Similarly, the annual Form 990 asks about key governance policies, such as whistleblower protection, document retention and destruction, executive compensation, gift acceptance, etc.
|9||File for Federal Tax-Exempt Status with IRS||Apply for tax-exempt status (to be exempt from paying federal taxes); the board should approve this filing before submission. This is usually a lengthy process. Consider fiscal sponsorship while waiting for tax exempt status.
|10||Check for Sales Tax Exemption from State||Many nonprofit corporations are not eligible for sales tax exemption in Maine. However, you should check the website for a list of the kinds of organizations that are eligible for an exemption. If eligible, you may apply for any state tax exemptions once you receive IRS exemption.
|11||Comply with Charitable Solicitation Rules||If your organization will conduct any fundraising solicitations, it must comply with Maine’s Charitable Solicitations Act. If minimal fundraising activity is anticipated you may be exempt from registration and reporting requirements. Other exemptions may also apply.
|12||Stay Exempt!||Once your organization has status as a tax-exempt nonprofit organization, be sure to stay in compliance: