Do you qualify to be a nonprofit?

First determine if your business qualifies for nonprofit status under IRS stipulations.

I recommend: The IRS lists requirements for an organization's eligibility for tax-exemption, which these FAQs can help you determine. Refer to Managementhelp.org for help getting started, or use the University of Wisconsin's company assessment to assist with strategic planning.

Get a checklist to simplify the must-dos

Before applying for nonprofit status, your business must have a mission statement, articles of organization, and be incorporated, among other things. Save time by having a checklist to ensure you have everything in order on the front end.

I recommend: IRS Publication 557 stipulates in detail what you need. Use Columbus Metropolitan Library's online tutorial to walk you through the initial steps.

Forms and fees to apply

Filling out forms can be the worst part of the process. Applying for 501(c)(3) status requires filling out the 28-page-long IRS form 1023. The IRS estimates a preparation time of more than 100 hours for a novice to complete. Approval can take four to six months.

I recommend: Print 1023 from the IRS Web site. It also lists user fees associated with all tax-exempt applications. Call (877) 829-5500 for specific questions.

Hire someone to help

While you can do a lot of the work yourself, you should also enlist the professional help of an attorney and/or accountant to review your application. Use specialists in forming nonprofits. Many businesses will skip the hassle and hire a firm to complete all of the paperwork.

I recommend: Try the American Bar Association for referrals to local attorneys. Seek out attorneys who do pro bono work for nonprofits, as well as for reputable consulting firms such as the Foundation Group and the Authenticity Consulting.