Start Your Kentucky Nonprofit

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How to Start a Nonprofit in Kentucky

Welcome to our Kentucky Nonprofit Startup Guide! If you’re passionate about helping others and have an idea to serve your community, starting a nonprofit is a great way to turn your vision into a reality. There are many different types of nonprofits - religious, educational, human service oriented, animal welfare, and more. What all nonprofits have in common is a focus on helping others and benefiting their community. You are genuinely committed to these goals so you are already well on your way!

According to the National Center for Charitable Statistics, there were over 21,000 nonprofit organizations in Kentucky in 2012. Before you start a new nonprofit, make sure you have identified an unmet need in your community and know that there are not any existing organizations serving your cause. If another organization exists, consider working together, as that may be a better way to make an impact in your community and use existing resources.

When you are ready to start your nonprofit, plan to incorporate and apply for 501(c)(3) status, as these are important steps to fully achieve your goals. As a 501(c)(3) nonprofit, you will be able to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Most importantly, you will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.

This guide will walk you through the basic steps to start your nonprofit in Kentucky. Let’s get started!

  1. Name Your Organization

    Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.

    Name Search: Kentucky Secretary of State
    Name search
    Suffix:

    End with the word "corporation," "company," or "limited" or the abbreviation "Corp.," "Inc.," "Co.," or "Ltd." or words or abbreviations of like import in another language, provided, however, that if a nonprofit corporation's name includes the word "company" or the abbreviation "Co.," it may not be immediately preceded by the word "and" or the abbreviation "&"; or if a professional service corporation, shall end with the words "professional service corporation" or the abbreviation "P.S.C." 
    KRS 14A.3-010(2)

  2. Recruit Incorporators and Initial Directors

    The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.

    Kentucky director requirements:
    • Number: minimum 3
    • Qualifications: None. No residency requirement. No membership requirement.
    • Term: 1 year and until successor elected and qualified
    • Quorum: majority
    • Committee: minimum 2 director
    Kentucky officer requirements:
    • Defined in bylaws or board resolution. One officer prepares minutes of the directors' and members' meetings.
    • Two or more offices may be held by the same individual.
  3. Appoint a Registered Agent

    A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local Kentucky registered agent office is located in Richmond, KY. We offer registered agent service independently or as part of our nonprofit formation packages.

  4. Prepare and File Articles of Incorporation

    Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.

    Agency:Kentucky Secretary of State
    Form:

    Articles of Incorporation

    Filing Method:

    Mail, in-person, or online.

    Agency Fee:

    $40 filing fee + Organization Tax Fee dependent on number of authorized shares (minimum fee of $10)

    Turnaround:

    ~3-5 business days by mail or online

    Law:

    KRS § 273

  5. File Initial Report

    After filing articles of incorporation, you must file an initial report.

    Not required



  6. Obtain an Employer Identification Number (EIN)

    This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.

    Agency:Internal Revenue Service (IRS)
    Form:

    IRS Form SS-4

    Instructions:

    Applying for an EIN without a SSN/TIN:

    • Online applications are not accepted if an individual does not have a SSN/TIN.
    • Form SS-4 must be completed, signed, and faxed to the IRS, leaving the SSN/TIN field blank or adding the terminology "foreign" to that line item.
    • To follow up on the application, call the IRS and ensure they received the application. 
      • Depending on the agent you speak with, you may be able to obtain the EIN over the phone. The IRS may then fax the EIN documentation back to you.
    Filing Method:

    Mail, phone, fax, or online.

    IRS fee:

    $0

    Turnaround:

    Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.

    Notes:

    The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN.

  7. Store Nonprofit Records

    As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.


    A preview of our Records Manager software

    A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.

  8. Establish Initial Governing Documents and Policies

    Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.

    At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.

    Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.

  9. Hold Organizational Meeting of the Board of Directors

    The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.

  10. Get Kentucky State Tax Identification Numbers/Accounts

    Register with the Kentucky Department of Revenue within 30 days of incorporation for applicable tax accounts

    Submit to: Kentucky Department of Revenue
    http://revenue.ky.gov/
    Form: Form 10A100: Kentucky Tax Registration Application
    Filing Method: Mail or online
    Fee: $0
    Turnaround: ~5-10 business days

    You may also need to file other Kentucky Registration Applications.

  11. Apply for 501(c)

    Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.

    Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!

    Agency:Internal Revenue Service (IRS)
    Form:

    IRS Form 1023IRS Form 1023-EZ, or IRS Form 1024

    Instructions:

    IRS Instructions for Form 1023IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.

    Filing Method:

    Mail

    Agency Fee:

    $275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023.

    Turnaround:

    1023-EZ average: <1 month. 1023 average: 3-6 months.

    Tax-Exempt in 2 Weeks!

    Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using the new IRS Form 1023-EZ!

    From filing the 1023EZ on August 1st to receipt of the determination letter on August 14th is, in my humble opinion, simply breathtaking and I dare say, ONLY Harbor Compliance could have achieved that.
    Dr. Bob A.Reform It Now, Inc.
  12. Report Beneficial Ownership Information to FinCEN

    As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.

  13. Apply for State Tax Exemption(s)

    With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.

    To file to obtain exemption from state income tax:

    Not required



    Your nonprofit is automatically exempt from Kentucky corporate income tax when you receive IRS income tax exemption.

    More information: Kentucky Department of Revenue

    To file to obtain Sales & Use Tax Exemption:

    Agency:Kentucky Department of Revenue
    Form:

    Form 51A125: Application for Purchase Exemption

    Agency Fee:

    $0

    Notes:

    Include a copy of your articles of incorporation and IRS Determination Letter.

  14. Register for Charitable Solicitation (Fundraising)

    This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.

    Kentucky Charitable Solicitation Registration

    Agency:Kentucky Attorney General - Charities
    Law:

    Kentucky Revised Statutes Ann. § 367.657

    Foreign Qualification is Prerequisite:No
    Exam Required?Not Set
    Registered Agent (Special Agency) Required?Yes

    Automatic Exemption

    Exemption Eligible Organizations:
    • Solicitations by an organization of contributions from its members and their families only, if membership is not included in a solicitation, is not granted upon the basis of contributions alone, and is within the exception of KRS 367.650(3)
    • Solicitations by a religious organization for funds for religious purposes such as maintenance of a house of worship, conduct of services, and propagation of its faith and tenets as distinguished from other charitable and civic purposes employed by nonreligious organizations
    • Solicitations by a publicly-owned or nonprofit privately-endowed educational institution regulated by the Kentucky Board of Education, the Council on Postsecondary Education, or an equivalent public authority of the jurisdiction where the institution is located, from the alumni, faculty members, student body of the institution and their families, and from corporations, for the continuance of an established educational program
    • Local solicitations by a student group or parent-teacher association for its campus or group connected activities with the approval of the administration of the educational institution
    Law:

    KRS § 367.660

    Initial Registration

    Form:

    There is no prescribed form, instead file the required attachments in the mail. If your 990 is not available the URS can be filed instead.

    Filing Method:

    Mail or on a CD or thumb drive in .pdf format

    Agency Fee:

    $0

    Turnaround:

    4-6 weeks

    Before you Apply:

    All Applicants:

    • Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement.
    • If filing the URS, appoint a registered agent to receive legal documents in Kentucky.
    • Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application.
    How to Apply:

    Domestic Applicants:

    1. File entity formation documents with the Kentucky Secretary of State.
    2. Submit the documents listed in the required attachments section, or a URS if your 990 is not available, to the Kentucky Attorney General - Charities Section.

    Foreign Applicants:

    1. Determine whether or not your charity will need to foreign qualify based on your activity in Kentucky. If not required, skip to number 3.
    2. File foreign qualification documents with the Kentucky Secretary of State.
    3. Submit the documents listed in the required attachments section, or a URS if your 990 is not available, to the Kentucky Attorney General - Charities Section.
    Required Attachments:

    • IRS form 990
    • Articles of incorporation
    • Bylaws
    • IRS determination letter

    Registration Renewal

    Filing Method:

    Mail or on a CD or thumb drive in .pdf format

    Agency Fee:

    $0

    Due:
    • Annually by 4 months and 15 days after the organization's fiscal year end.
    • There is no official start to the renewal period, so renewals may be submitted as soon as financials become available for the most recently completed fiscal year.
    • Newly formed charities that have not yet filed Form 990 with the Internal Revenue Service can file a notice of intent to solicit, which expires on December 31 every year.
    Due Date Extension:

    Due dates are automatically extended for 180 days beyond the original due date, however, charities should file a copy of their IRS form 8868 when submitting their 990 if an IRS extension was granted.

    Notes:

    Simply file your IRS Form 990 with the Kentucky Attorney General at the same time as you file it with the IRS. If your nonprofit does not file Form 990, either file IRS Form 8868 or the URS each year.

    Required Attachments:

    • IRS form 990

    Change of Fiscal Year

    Agency Fee:

    $0

    Notes:

    File the new 990 showing a change in fiscal year.

    Cancelation

    Agency Fee:

    $0

    Notes:

    To close out your registration charities that are not associated with a professional solicitor contract/campaign or fundraising consultant contract, the charity can simply not submit the next IRS form 990. Alternatively the charity could submit on letterhead the date they wish to withdraw from soliciting in Kentucky.

    To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.

  15. Obtain Other Business Licenses & Permits

    Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.

    Kentucky nonprofits who wish to conduct bingo, raffles, and other charitable gaming must register with the Kentucky Public Protection Cabinet - Department of Charitable Gaming by filing Form CG-1: Kentucky Application for License for Charitable Organization ($25 state fee).

Frequently Asked Questions

Some of our clients incorporate on their own and seek our professional assistance with the next steps. In such cases, we review the existing documentation and make any necessary changes. We’re happy to help at any point. Keep in mind, the earlier you enlist our expertise, the more time you’ll save and the greater success you'll experience in the end!

If you have an existing for-profit entity and are looking to transition to a nonprofit, we are very familiar with this situation and can help! Simply sign up for our professional formation services, and your specialist will review your existing entity and assist with the appropriate next steps.

You are not required to use an attorney. You can set up your nonprofit yourself but doing so requires a great deal of expertise and time. The IRS estimates the 501(c)(3) application takes over 100 hours in research and preparation. Enlisting the help of a professional greatly increases your likelihood of success and saves you time. With our professional formation services, your specialist prepares and files your applications for you with guaranteed approval. Take advantage of our track record of 100% IRS approval and get your nonprofit approved, guaranteed!


You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!

Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Kentucky nonprofit compliance guide to learn more!

Harbor Compliance® proudly partners with the Kentucky Nonprofit Network, Inc. to provide insightful resources and compliance solutions to nonprofits in Kentucky.


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Fast Facts

Below is an overview of the paperwork, cost, and time to start an Kentucky nonprofit.


Paperwork
  • Form NAI: Non-profit Corporation Articles of Incorporation
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • IRS Form 1023: 501(c) Tax Exempt Application
  • IRS Determination Letter
  • Form 10A100: Kentucky Tax Registration Application
  • Form 51A125: Application for Purchase Exemption - Sales and Use Tax
  • URS Charitable Registration, if applicable
  • Kentucky Charitable Registration
  • FinCEN Beneficial Ownership Report

Cost
  • Incorporation: $8
  • 501(c): $275 or $600 IRS fee

Time
  • Incorporation: ~3-5 business days by mail or online. While you wait if you file in-person.
  • 501(c): 2 weeks to 3 months