Most nonprofits are not stopped by their mission. They are stopped by the paperwork between the idea and the first grant — a stack of state and federal filings that have to be done in the right order, and where one wrong answer can cost months.
We prepare that paperwork end to end, so you can get to the work you actually started the organization to do.
The sequence, and why order matters
Forming a California nonprofit and obtaining federal tax exemption is not one application. It is a chain, and each link depends on the one before it:
- Articles of Incorporation filed with the California Secretary of State. The IRS requires specific purpose and dissolution language here — articles that satisfy the state but omit that language will fail at the federal stage, and amending them afterwards costs time.
- EIN from the IRS — your federal identifier, needed for everything that follows.
- Bylaws and initial governance — board composition, conflict-of-interest policy, and the records the IRS will ask you to describe.
- Registry of Charitable Trusts (Form CT-1) with the California Attorney General, before you solicit donations.
- Federal exemption — Form 1023 or Form 1023-EZ to the IRS.
- California exemption — Form 3500 or 3500A to the Franchise Tax Board. Federal exemption does not grant state exemption automatically.
Getting this out of order is the most common and most expensive mistake we see.
Form 1023 or Form 1023-EZ?
The EZ form is shorter and cheaper, and it is not always the right choice.
- Form 1023-EZ is open to organizations projecting no more than $50,000 in annual gross receipts in any of the next three years, that have not exceeded that in the past three, and hold total assets of no more than $250,000. Eligibility is decided by a worksheet of roughly thirty questions, and several answers disqualify you outright regardless of size.
- Form 1023 is the full application — longer, more expensive, and considerably more demanding about your narrative, finances and governance.
Current IRS user fees are $275 for Form 1023-EZ and $600 for Form 1023, paid through Pay.gov. The IRS does not begin processing until the fee is paid, and these fees are set by the IRS and change from time to time.
Some organizations that qualify for the EZ form are still better served by the full application — particularly if you expect to grow quickly, or you intend to approach funders who look at what was actually filed. We will tell you which we think applies, and why.
What we prepare
- Articles of Incorporation, drafted with the IRS purpose and dissolution language in place
- EIN application
- Bylaws and conflict-of-interest policy, prepared from established templates and tailored to your structure
- Form CT-1 registration with the California Attorney General
- Form 1023 or 1023-EZ, including the narrative description of activities — the part applications most often fail on
- Three-year budget and financial projections in the format the IRS expects
- FTB Form 3500 or 3500A for California exemption
- A written calendar of your ongoing filing obligations, so nothing lapses in year two
Where applications fail
- The narrative is too vague. “We help the community” tells the IRS nothing. The reviewer needs to see specific activities, who delivers them, who benefits, and how they are funded.
- Articles missing required language. A purpose clause or dissolution clause that does not meet the federal requirement stops the application.
- Private benefit problems. Compensation arrangements or board composition that appear to serve insiders rather than the public.
- The EZ form used when it should not have been. Cheaper up front, and a genuine problem later if the organization outgrows the basis on which it was granted.
- Budgets that do not match the narrative. If the activities described are not reflected in the numbers, the reviewer notices.
Staying compliant afterwards
Exemption is not permanent by default. California nonprofits carry an ongoing calendar:
- IRS Form 990, 990-EZ, 990-N or 990-PF, due the fifteenth day of the fifth month after your fiscal year end
- FTB Form 199 or 199N
- Form RRF-1 to the Attorney General’s Registry, due four months and fifteen days after fiscal year end
- Form CT-TR-1 if you are not filing a 990 or 990-EZ
- Form SI-100 to the Secretary of State every two years
Missing these is how organizations lose exemption or fall off the Registry, usually without realising until a funder checks.
Why this matters for funding
501(c)(3) status is the gate to most grant funding. Federal grants additionally require an active SAM.gov registration, which catches a lot of new nonprofits at the point of application — the exemption letter arrives, the grant deadline is close, and the registration has not been started.
We handle both, and we sequence them so the registration is ready when the exemption is.
What we do, and what we do not
We prepare applications and filings. Anyone may prepare a federal tax-exemption application, and that is the service we provide — research, document preparation, narrative writing and financial presentation.
We are not attorneys, CPAs or enrolled agents. That means two things in practice:
- Your organization signs its own application. The IRS requires Form 1023 to be signed by a principal officer, director or trustee — not by a preparer. That is true of every preparer, credentialed or not.
- We cannot represent you before the IRS. If your application is challenged and you need someone to act for you, that requires an attorney, CPA or enrolled agent. We will tell you plainly if you reach that point, and work alongside whoever you engage.
We do not provide legal or tax advice. For governance questions with legal consequences — unusual structures, related-party arrangements, anything contested — we will tell you it needs an attorney rather than answer it ourselves.
Common questions
How long does 501(c)(3) approval take?
IRS processing time is outside anyone’s control and varies considerably, with the EZ form generally faster than the full application. What we control is that the submission is complete and consistent, so you are not restarting after a request for further information.
Can we accept donations before approval?
This depends on your circumstances and is worth a conversation before you start fundraising. Registration with the California Attorney General is generally required before soliciting, and exemption granted later is normally effective from your formation date if you apply within the required window.
What does it cost?
Government fees are separate from our fee and are paid by you directly — currently $275 or $600 to the IRS depending on the form, plus California filing fees. We quote a fixed fee for the preparation work once we know which route applies.
We already incorporated. Can you still help?
Yes, and this is common. We review what was filed first, because articles drafted without the federal language are the most frequent reason an otherwise sound application fails.
Do you work with nonprofits outside California?
The federal exemption work is nationwide. State formation and registration requirements differ, so tell us your state and we will confirm what we can handle.
How much does it cost to start a nonprofit in California?
Three separate costs, and it helps to see them apart. State filing fees to the Secretary of State. Federal user fee to the IRS — currently $275 for Form 1023-EZ or $600 for the full Form 1023, paid through Pay.gov. And preparation, which is our fixed fee. Government fees are paid by you directly and are the same whoever prepares the application.
How long does it take to start a nonprofit in California?
Incorporation with the state is comparatively quick. Federal tax exemption is the slow part and varies considerably, with the EZ form generally faster. The two should not be planned as one timeline — you can be incorporated and operating while the exemption is pending.
Can I start a nonprofit by myself?
Yes. Every form is public and none of them require a professional. What people pay for is not access — it is not losing a cycle to an application that was rejected over the purpose clause in the articles.
Where we work
We deliver nationwide, remotely. Federal registrations, federal and foundation grants, and proposal work are not tied to geography — most of our engagements never require anyone to be in the same room.
In California we work across Los Angeles County, Orange County, Riverside County, San Bernardino County and the wider Inland Empire, plus San Diego, Ventura and the Central Valley. State-specific programmes such as Cal eProcure and California SB certification are, by definition, California only — everything else travels.
Our office is in downtown San Bernardino. See all service areas.
Request a Quote
- Call (909) 454-7076 — the fastest route. Monday to Friday.
- Book a consultation — pick a time that suits you.
- Email us about Nonprofit Formation and 501c3 — opens a message already titled, so it reaches the right person.
If you only want to know whether you need this at all, ask. There is no charge for that conversation.
GERC is a woman-led advisory firm in downtown San Bernardino, registered in SAM.gov under CAGE code 11SD2, certified as a California Small Business (Micro) and for Public Works.
Related: SAM.gov registration · industries we serve