Starting a Nonprofit Ministry

So you feel God’s call to start a nonprofit ministry to serve others? Wonderful! This is a high calling. You are enthusiastic, imaginative, and creative. The transformation from vision to reality is an important undertaking. It should be done prayerfully and properly.

Are financial resources a concern? Most nonprofits are started with little money and lots of faith. You may find professionals willing to donate their expertise in the formation of your new ministry. But be prepared to pay standard fees for legal, accounting, and fund-raising assistance.

Legal form. Most nonprofit ministries are organized as corporations. Your attorney will assist you with a creating document (articles of incorporation) and a document containing operational rules (bylaws).

Location. Most nonprofit ministries incorporate in the state where the ministry is headquartered. Your attorney can advise you on this issue.

Organizational issues. You must decide how to handle a number of basic issues—some of which may be dictated by state law—including:

  • Will the ministry use a membership style (where members have certain rights and privileges, perhaps including electing the board) or a self-perpetuating board style (where the board re-elects itself) or some combination of the two styles?
  • How many directors will the ministry have?
  • How is a quorum determined?
  • What is the length and number of terms of the service of directors?
  • What officers must the ministry have and what are their duties?
  • How frequently will the governing board meet? Must the board always meet in person, or can meetings be conducted by telephone conference call or video teleconferencing?
  • Will an executive committee be formed? If so, what are their duties and limitations of their functions?
  • Will an audit review committee be formed? ECFA requires this committee unless the audit review function is handled by the board.
  • How will the ministry’s assets be distributed upon dissolution?

Obtaining an employer identification number. Your ministry will need an employer identification number (EIN). It is also known as a taxpayer identification number (TIN). File Form SS-4 with the Internal Revenue service to obtain this number. This form may be filed as soon as your entity is formed. You will need this number before you open a ministry bank account.