We use cookies to improve your experience on our platform. By clicking “Accept all cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage and assist in our marketing efforts.
Cookies required for basic website functionality.
Cookies used to deliver content most relevant to you and your needs.
Cookies used to deliver content most relevant to you and your needs.
Cookies that help understand the performance of the website, how users interact with it and to identify bugs.
How is Zeffy free?
How is Zeffy free?
Zeffy relies entirely on optional contributions from donors. At the payment confirmation step - we ask donors to leave an optional contribution to Zeffy.
Starting a nonprofit organization means considering the financial aspects of implementing your vision. So, how much does it cost to start a nonprofit organization?
While the costs can vary, you don't necessarily need a massive investment to get started. Understanding detailed cost breakdowns and managing them efficiently can help you hit the ground running.
Below, we’ll explain the essential costs of starting a nonprofit, provide a state-by-state cost analysis, federal fees, and offer savings strategies.
State fees include the costs involved with registering an organization.
Incorporation costs
Filing articles of incorporation is a mandatory step of strategic planning to establish your nonprofit legally. Costs vary widely by state, ranging from about $50 to $500, with additional fees for expedited processing if needed.
Examples of minimum cost for state filing fees
Here is an example of incorporation costs that vary across several states:
In most states, nonprofits must register before fundraising for all forms of donation solicitation, including online, in-person, and by mail. Some states even consider a "Donate" button on your website as an active solicitation, requiring registration where potential donors reside.
Charitable registration fees can range between $10 and $100 and fluctuate with fundraising totals and state-specific solicitation laws. It’s best to check with your state and understand which costs are categorized under registration fees and the deadlines you’ll need to follow to avoid stacking on additional hidden fees.
For example, Illinois has several fees that can fall into the solicitation category:
Some states require nonprofit organizations to obtain a business license or permit. In many states, nonprofits have no statewide requirement to obtain a business license, but local municipalities and counties may have their own requirements.
Business license fees typically range from $50 to hundreds of dollars, depending on the permit type. It’s best to check with your local jurisdiction to factor in this cost.
In some situations, your nonprofit organization will have to pay state-dependent fees. These include sales tax permits, annual registration, tax exemption, a gambling license, and name registration. Each of these charges depends on your state and nonprofit type.
Some examples of state-specific miscellaneous fees include:
Georgia requires a name reservation fee of $25 to secure your nonprofit DBA ("doing business as")
Delaware may charge between $25 and $200 for a state business entity tax filing
Filing for tax-exempt status with the Internal Revenue Service and establishing your nonprofit legally are two separate steps. The filing process with federal tax exemptions varies depending on the type of 501(c) organization you want to form. Federal filing fees are also different.
Depending on your eligibility, you must typically fill out Form 1023, Form 1023-EZ, or Form 1024 and pay filing fees with the federal government.
Form
Filing Fees
Processing Time
Key Eligibility Requirements
Details
Form 1023
$600
3–6 months
No specific income/asset limits
Standard application for 501(c)(3) tax-exempt status, filed online.
Legal assistance costs vary, with some attorneys charging hourly rates and others offering flat fees for nonprofit setups. The complexity of your organization affects the price of paying fees along the way.
For example, hiring a nonprofit attorney can cost an hourly rate between $150 and $400. You can look for pro-bono services (some law firms offer free or reduced-cost help to nonprofits). If you want to feel assured you’re cutting legal costs, you can always partner with Zeffy.
All you have to cover are incorporation fees, and we’ll help you with the rest.
These additional costs help you support and keep your organization's operations running. Administrative and operational costs comprise of:
Office space
Remote work means office space isn’t always essential. This shift can reduce overhead nonprofit costs as you consider your team's needs and ideal budget.
Most nonprofits thrive with a hybrid model—using co-working office spaces for occasional meetings while primarily working remotely. Office space can cost between 20% and 30% of an overall operating budget.
A hybrid model can reduce overall operational costs and enable you to recruit volunteers when more in-person work and collaboration are needed.
Typically, staffing costs comprise 60% to 90% of the annual budget. The Better Business Bureau recommends that at least 65% of your budget go toward program expenses, including salaries.
Running a nonprofit comes with risks, like claims made during fundraising activities. To protect your organization, consider investing in nonprofit insurance.
Many nonprofits start with a Business Owner’s Policy (BOP) covering general liability, business income, and property. The average cost is $57/month or $684/year, according to Insureon. Finding the minimum price for general liability insurance will help you reduce the expense of obtaining your nonprofit status and other financial protections in an emergency.
Nonprofits often also get Directors and Officers (D&O) insurance to cover board members. D&O insurance typically costs $70/month, though it varies based on risks.
Communications and marketing
A strong marketing strategy is key to spreading the word about your cause and attracting donors, volunteers, and more.
A few tips:
Create a plan balancing impact and cost.
Use both online (social media, email, website) and offline methods (events, partnerships).
Budget for tools like email marketing, social media management, and design resources.
A website adds credibility to your organization. With an online presence, you can make it easy for potential supporters to find you and confirm your legitimacy.
To create a website, you have a few choices.
DIY: Use online website builders with no coding required.
Freelance web designer: Hire a freelancer or someone with web design experience.
Web design agency: Full-service design with an average cost of $100-$149/hour.
It is essential to plan for these expenses upfront. Your exact costs will depend on your nonprofit’s size and strategy.
While many software options charge monthly or yearly fees (often with nonprofit discounts), Zeffy is a standout option. It’s 100% free and offers all-in-one tools to maximize your impact.
Let's help you bring down the total cost to start a nonprofit organization as you look at your initial budget and determine what fees are ahead.
1. Skip the legal fees & incorporate for free
Traditional nonprofit filing services often charge upwards of $2,000, in addition to mandatory government filing fees. With Zeffy, nonprofits can avoid these hefty costs. From organizing documents to guiding you through the application process, Zeffy simplifies the path to official nonprofit status so you can focus on making an impact.
With a proven track record of working with over 50,000 nonprofits across North America, Zeffy provides expert guidance every step of the way. Their team helps you craft and review your paperwork, ensuring everything aligns with your organization’s goals before submission.
Zeffy even handles communications with the state, streamlining the process so most organizations achieve nonprofit status within four weeks.
Many online platforms provide discounted or free tools for nonprofit organizations. For example, TechSoup connects organizations with discounted software and services from Microsoft, Intuit, and Adobe to avoid costly outsourcing for tech and operational needs.
You can cut costs by sourcing office supplies and furniture from businesses that donate surplus items or shop second-hand. You can also seek in-kind donations from corporate partners.
Retaining a new donor can be more costly than retaining your existing supporters. Build relationships by sharing updates, impact stories, and branded merchandise. These efforts foster loyalty and make your supporters feel valued beyond their financial contributions.
Virtual fundraisers or events with a hybrid component are a cost-effective way to eliminate expenses like venue rentals, catering, and on-site logistics. Digital platforms often include built-in marketing and engagement tools, reducing the need for additional resources.
Plus, virtual events break down geographic barriers, allowing you to reach a global audience without significant cost increases.
Cost savings success story: Si Se Puede Foundation saves $7,031 with Zeffy
Whether you’re starting your nonprofit or looking to save on the costs of running it effectively, Zeffy has your back. Si Se Puede was faced with the financial decision of choosing between entering into robotics competitions to provide students with hands-on STEM experience or paying their rent.
A switch to Zeffy’s 100% free fundraising software to cut back on the costly fees of their previous provider and see more of their donations go to the programs that matter. They were able to raise $140,622 and see a $7,031 savings without having to worry about paying transaction fees (which really adds up!).
While hiring a lawyer to start a nonprofit is not mandatory, legal assistance can help meet all legal requirements. Legal fees can range from $500 to $5000, depending on the complexity of your organization and other costs associated with paying IRS fees. State fees typically vary. Zeffy helps you skip those additional fees as a free legal partner.
A nonprofit founder can receive a fair salary for their work to run the organization. They must be careful while compensating because IRS fees exist if the organization overpays. The basic guidelines for compensating both executives and employees are:
Meet all federal, local, and state guidelines for the minimum wage.
Be fair, reasonable, and not excessive.
Remain compliant with payroll taxes.
Include all benefits as part of the total compensation package.
Contrary to popular belief, nonprofits are allowed to make a profit. The only difference is that unlike for-profit businesses, nonprofits cannot distribute their earnings to private individuals. This prohibition is because tax-exempt charitable organizations are formed to benefit the public and not private interests.
