Starting a Nonprofit in Virginia: A Step-by-Step Guide on How to Start a Nonprofit in Virginia Successfully

In theory, starting a nonprofit in Virginia requires extensive planning and adherence to a special set of legal requirements applicable to nonprofit entities. Just as with any new for-profit enterprise, you need to create a business plan. A nonprofit though will also need to be able to provide a more comprehensive description of how it plans to function in terms of charitable, social, or public benefit imperatives.

A nonprofit corporation is a special legal entity designed to achieve a mission, not to generate profits. Unlike for-profit businesses, nonprofits reinvest their revenues in their mission and, in return, may receive benefits, such as exemptions from federal income taxes. These benefits take a great amount of time, money, and planning to achieve.

One valuable resource to ease the management of your nonprofit is the Paybee nonprofit fundraising platform. Paybee offers tools that simplify fundraising, donor management, and event organization, allowing you to focus on your mission while ensuring financial sustainability. Additionally, the Paybee blog provides expert tips and insights to help your nonprofit thrive in today’s competitive environment.

The guide below outlines the steps to form and incorporate your nonprofit in Virginia. We also suggest you book a free demo with our experts to experience the comprehensive resources available to meet your nonprofit's needs.

How Long Does It Take to Start a Nonprofit in Virginia? 

Starting a nonprofit can take time. Much of it depends upon how quickly you can get organized, put together a board of directors, incorporate your nonprofit, and get everything ready to go that you need to apply for tax-exempt status. For most new nonprofits, this stage can take a few months. When ready, you'll file for tax-exempt status on Form 1023. The IRS generally takes 3 to 12 months to respond with a determination.

If you think your nonprofit will generate less than $50,000 in annual revenues, then you can use the expedited version called Form 1023-EZ, which takes 2 to 4 weeks to process. Don't worry; we'll cover how to apply for tax-exempt status later in the article. Besides that, you will have to deal with a few different legal nuances. In all, you can expect to be waiting from several months up to a year before you can begin operating your nonprofit.

A Step-by-Step Guide on How to Start a Nonprofit in Virginia Successfully

Define Your Nonprofit's Purpose and Mission

Name the community or demographic your organization will serve and support your mission with population data highlighting your needs. Clearly defined, the purpose of your nonprofit not only guides your efforts but is also a legal requirement and a funding necessity.

The IRS requires every nonprofit organization to have a statement of purpose. The following purposes may enable an organization to qualify for tax-exempt status:

• Charitable
• Religious
• Educational
• Scientific
• Literary
• Testing for public safety
• To encourage national or international amateur sports competitions
• Prevention of cruelty to children or animals
  
  

Your mission statement supports this purpose, guides your nonprofit's efforts, and will help your team make key decisions. Make a mission statement that:

1. Clearly explains what your organization does and what causes it advances
2. Is brief and easy to understand
3. Can evolve with your organization's goals.
   
   

A clearly defined purpose and mission will be beneficial in applying for grants and will determine whether you qualify for federal and state tax exemptions.Naming Your Virginia Nonprofit CorporationNaming your nonprofit organization is the first big step in building it. The name will create a unique, memorable, and catchy brand. We recommend you search for name options on the Internet before confirming the final one. Moreover, checking whether your name is available as a website domain and a social media handle would be very helpful.The name of your nonprofit corporation must be distinctive and different from the name designated, registered, or reserved for use by any other business entity authorized to conduct activities in Virginia and the names shown on all filings of record in the Virginia State Corporation Commission.You also need to follow the guidelines and requirements set by the Commonwealth of Virginia:

• The name may not imply that the organization conducts any business other than what it's authorized to or that it is a limited liability company or partnership.
• It shouldn't contain any words or phrases prohibited under the law or include the word "redevelopment" unless it is an urban redevelopment corporation.
• It mustn't be the same as any registered corporation or organization already in Virginia. The list of registered businesses is on the State Corporation Commission Clerk's Information System.
• You don't have to include legal designations, such as "Inc.", "LLC," "LTD," or "Company."
• You may want to check the IRS guidelines to see if your name contains special characters or symbols.

You can use the Virginia business name database to search available names to see if a name might be available. You can fill out an Application for Reservation or Renewal of a Corporate Name with the Virginia State Corporation Commission to reserve a name for 120 days. Filings can be submitted online or by mail; the filing fee is $10. For more information on nonprofit name restrictions, see Virginia Code §13.1-829.Appoint a Registered AgentEvery Virginia nonprofit corporation must have a registered agent to accept any legal documents served upon the organization. The registered agent may be either an individual or a corporation, such as a registered agent service, that the corporation designates to accept service of process if the corporation is sued.The agent must have a physical street address (not a post office box) in Virginia and maintain an office that is open during regular business hours. Most small nonprofit corporations appoint a director or officer as the initial agent, but you can act as your agent or elect someone within your organization. This agent must accept this appointment, and no more than one person or entity may hold this role.Naming Incorporators and Directors for Your NonprofitBy law, you must recruit a Board of Directors of incorporators, initial directors, and officers before registering your nonprofit:IncorporatorsThe incorporator has the temporary responsibility of signing the Articles of Incorporation and forwarding those Articles to the Commission for filing. You may have only one incorporator, but the law allows you to have more than one incorporator. The incorporator is not required to be a resident of Virginia nor a member of the nonprofit.DirectorsThe directors are the individuals that make up your board of directors—those that help govern the organization and bring experience, insight, and networks. Virginia only requires one director. However, to obtain tax-exempt status with the IRS, you must have at least three unrelated individuals older than 18. Directors usually serve for one year or until a successor is nominated and elected. The directors may elect officers: president, secretary, and treasurer.No one person can hold more than two offices, but each board committee should have at least two directors. When you choose your board, you should elect people from all walks of life with different backgrounds that can help you with your programs, fund raising needs, and standing within the community. By choosing individuals with different perspectives, your nonprofit will be a flourishing success.OfficersTo file your 501(c)(3) with the IRS, you will need to identify your board officers by name, title, and contact information. Most states require at least three officers on the board: a president, secretary, and treasurer. Preferably, they're not to be related by blood or business. Public charities are required to have a board where the majority of members are unrelated. Paid staff cannot be on the board unless they recuse themselves from voting. Key ConsiderationsYour board must have at least three directors, which may also be officers, including the president, secretary, and treasurer.

• Your board must include at least three directors, who can also serve as officers (e.g., president, secretary, and treasurer).
• Directors do not need to be residents of the state or members of the nonprofit.
• The board should have a majority of unrelated members to meet IRS requirements.
• Together, the incorporators, directors, and officers form your nonprofit’s Board of Directors.

Filing Virginia Articles of IncorporationFiling the Virginia Articles of Incorporation legally creates your nonprofit. In Virginia, nonprofits are usually organized as "nonstock corporations." First, you must draft and file Articles of Incorporation with the Virginia State Corporation Commission. Once filed, the SCC will issue a certificate of incorporation; this marks the legal commencement of your nonprofit.What to Include in the Articles of IncorporationYour Articles of Incorporation should include the following, at a minimum:

• Name of your nonprofit
• The mission or purpose of your nonprofit, which must meet IRS regulations, including:                                     

1. A statement of purpose meeting the IRS standards 
2. Statements prohibiting certain political or legislative activities       
3. A dissolution provision allocating assets upon dissolution to another 501(c)(3) organization              

• Whether the nonprofit will have members
• How directors are to be elected
• The name and street address of the registered agent for the corporation
• Names and addresses of the first directors
• Name and signature of the incorporators
• Limitations and restrictions on activities and asset distribution upon dissolution

Filing ProcessYou may prepare and file the Articles of Incorporation using the SCC's fillable template for nonstock, nonprofit corporations (SCC819NP). Filings may be made online or by mail:

• Online filing: Usually processed in 3 to 7 business days.
• Mail-in filing: Processing time is about 7 business days.
• Expedited service: $100.00 for next-day processing, $200.00 for same-day service.

The filing fee is $75.Additional IRS RequirementsTo obtain 501(c)(3) federal tax-exempt status, your Articles must contain specific IRS-required language. This language can be added to:

• Article II (Purpose Clause): This should include a statement of purpose for your nonprofit.
• Article VII (Limitations and Restrictions): Include clauses prohibiting certain political activities.
• Article VIII (Dissolution Clause): How will the assets be distributed in case of dissolution?

Sample IRS-approved language is available in the Instructions for IRS Form 1023-EZ.Next StepsOnce your Articles of Incorporation are approved, you will be assigned a Personal Identification Number (PIN). You must also apply for federal tax-exempt status with the IRS using Form 1023 or Form 1023-EZ. Ensure any information and phrases in your Articles are identical to what is contained in your application to the IRS. Filing the Articles of Incorporation is a milestone for any nonprofit to become a formally recognized organization with tax-exempt status under 501(c)(3).Applying for an Employer Identification Number (EIN)An Employer Identification Number (EIN), or Federal Tax Identification Number, is a unique nine-digit number assigned to your organization by the IRS for identification purposes. You will need an EIN to file taxes, apply for tax-exempt status, and to open a bank account. All incorporated organizations must obtain an EIN regardless of whether or not they have employees.How to ApplyYou can apply for an EIN online, by fax, or by mail. You will need to complete Form SS-4, and there is no fee for this service.Online ApplicationAs the application should be completed within one session only, you'll need to make sure all the documents and the information you supply are prepared at the time of your application. If you have applied online, you will obtain your EIN instantly. You must print your EIN before closing out of the session.Fax ApplicationYou will be assigned an EIN in about four business days.Mail ApplicationProcessing takes four to five weeks. An EIN works for nonprofit organizations like a Social Security Number, allowing them to open bank accounts, file taxes, and apply for tax-exempt status. Holding an Organizational Meeting and Adopting Nonprofit BylawsThe first board of directors meeting is a required step in forming a nonprofit and a precursor to filing for federal tax exemption. It's an important opportunity to elect directors and officers, draft and adopt your nonprofit's bylaws, and establish a conflict-of-interest policy.Organizational MeetingAt the meeting, appoint one person to prepare an agenda and take minutes of your first meeting. Retain these records in a minute book along with your legal documents. Unless otherwise stated in the ARTICLES OF INCORPORATION, the incorporator(s) must appoint the first Board of Directors.Drafting and Adopting BylawsBylaws are the major governing document of the nonprofit, guiding the board of directors and ensuring accountability and transparency. In other words, bylaws are the internal rules and decision-making tools that describe the role and responsibilities of the board members, how elections are to be conducted, the requirements of meetings, and the financial controls. The bylaws should comply with the State of Virginia and include the following:

• Qualifications and powers of membership
• Term length for board members, duties of, and responsibilities of positions
• Election and voting procedures
• Meeting attendance expectations and quorum requirements
• Processes for removal or handling unexpected board vacancies
• Restrictions on financial transactions without board approval
• Dissolution provisions
• Any other governance rules as needed
  
  

Bylaws must be written in advance, reviewed, and ratified during the first meeting. They are also required for the 501(c )( 3) IRS application.Conflict-of-Interest PolicyThis policy describes procedures to deal with situations where key individuals may experience real or perceived conflicts of interest. The board and leadership must act in the best interest of the nonprofit. This document protects the board and leadership from questions about their motives and possible conflicts of interest.Record KeepingAlthough neither the bylaws nor the conflict of interest policy is filed with the state, they are kept by the nonprofit in its internal management book. Interestingly, each of these documents serves to ensure good governance and compliance with Virginia law.Applying for Virginia State Tax Identification Numbers and AccountsOnce you have filed your nonprofit with the State Corporation Commission and applied for your EIN, you must register your organization with Virginia Tax. This will establish your state tax accounts, which will get you back in compliance with the Virginia state tax laws.Registration RequirementsTo register, you will need the following:

• Business name and address
• Entity type
• Your EIN
• NAICS code
• Tax types you are registering for

Virginia offers a combined tax registration application for new businesses which helps in simplifying the process.Filing MethodsYou can file online or by filling out Form R-1: Virginia Department of Taxation Business Registration Form. Filing online will instantly give you account numbers for each tax type, online business services, and documents for tax returns and deadlines. Applications filed by mail or fax are free but take a little longer to process.Additional Considerations: If hiring employees, you can register with the Virginia Employment Commission (VEC) simultaneously. For more information and guidance through the process, you may want to refer to Virginia Tax's checklist or visit their website at Virginia Department of Taxation. Application for 501(c) Federal Tax ExemptionNext would be IRS registration for your nonprofit to get a 501 tax exemption. Indeed, tax exemption has its benefits: it saves money by exempting an organization from federal income taxation. It potentially also increases the chances of getting certain grants or sponsorships.Forms Types and EligibilityThe form that's right for you depends on your nonprofit type and eligibility:Form 1023-EZ:Use if your organization expects to raise less than $50,000 annually for the next three years.You must be able to answer "no" to all questions on the eligibility worksheet (page 13 of the IRS instructions).

• Filing Fee: $275.
• Method of filing: Online.
• Turnaround: About a month.

Form 1023:For organizations that don't qualify for Form 1023-EZ but seek 501(c)(3) status.

• Filing fee: $600.
• Filing method: Mail.
• Turnaround: 3 to 6 months.

Form 1024:For other 501(c) designations, such as 501(c)(4) or 501(c)(6).Application Procedure

1. Review IRS guidance, including IRS Publication 557: Tax-Exempt Status for Your Organization, to see if you must file.
2. Fill out and submit the appropriate form.
3. Upon approval, the IRS will send out a Determination Letter, which officially recognizes tax-exempt status.

Benefits

• Exemption from federal income tax.
• Access to grants and increased fundraising opportunities.

For more details and instructions, consult the IRS Instructions for Form 1023, Form 1023-EZ, or Form 1024 visit the IRS website for additional resources.Applying for Virginia State Tax ExemptionAfter you receive your IRS Determination Letter confirming federal tax-exempt status, your organization will automatically be exempt from the Virginia corporation income tax - no application or notification is needed.Sales and Use Tax ExemptionTo qualify for an exemption from Virginia's retail sales and use tax, you must file Form NP-1: Exemption Application for Nonprofit Organizations. You should submit this form with the following:

• A copy of your IRS Determination Letter.
• Your nonprofit's mission statement or statement of purpose.
• Proof of registration under the Virginia Solicitation of Contributions Law.
• Most recent federal tax filing (Form 990, 990EZ, 990PF, 990N e-Postcard, or a substitute form).
• Independent Certified Public Accountant financial review if your AGR exceeds $750,000.
• A summary of your total taxable purchases made in Virginia.
• The signature of an authorized representative on the form.

Filing Information

• Filing Agency: Virginia Department of Taxation.
• Form: Form NP-1: Application for Exemption for Nonprofit Organizations.
• Fee: $0.
• Instructions and More Details: Virginia Department of Taxation Forms.

If approved, your nonprofit will receive a certificate of exemption for sales and use tax purposes. If required, file a periodic renewal.Register with Charitable FundraisingSuppose your organization plans to solicit charitable contributions in Virginia or to have funds solicited on its behalf. In that case, you need to register with the Office of Charitable and Regulatory Programs in the Division of Consumer Protection, Virginia Department of Agriculture and Consumer Services.Initial Registration RequirementsYou must complete Form 102 and send it via post to the department. First-time registrations should present the following:

• Cost: There is a one-time registration fee of US$100 for first-time registrants. The organization may also be required to pay an annual fee if a financial history for that organization can be established.
• Turnaround Time: Roughly four to six months.
• Required Documentation:

1. Certificate of incorporation, if incorporated.
2. Articles of incorporation, if incorporated.

• Organization bylaws.
• IRS determination letter.

Exemption OptionIf your organization qualifies for an exemption under the Code of Virginia, you may file a one-time exemption application using Form 100. There is a $10 filing fee for this application.Simplify Fundraising with PaybeeOnce your organization is registered and qualified to receive charitable donations, Paybee will help improve your fundraising strategy. You can use Paybee for:

• Branding of donation forms by customizing how your brand should look by choosing campaign colors, donation amount, and description.
• Embed donation forms in your website or use widgets for easy access.
• Support more varied payment modes to make it easy for your supporters.

Paybee has designed its tools to make managing charitable contributions as simple and efficient as possible, so you can focus on your mission.Submit an Annual ReportAll Virginia nonprofit corporations have to file annual reports. You need to file a yearly report with the office of the clerk by the last day of the 12th month following the year your nonprofit corporation was incorporated, and this will have to follow each year from the first submission date. Annual reports must be filed online using SCC eFile.Frequently Asked Questions: Starting a Nonprofit in VirginiaWhat is the overall cost for me to start a nonprofit in Virginia?The overall cost for you to start a nonprofit in Virginia will be between $360 and $1,100. This depends on your eligibility and charitable contributions. Will I get paid a salary if I start a nonprofit?Nonprofit salaries are operating expenses for nonprofit organizations. You'll need to fundraise by holding events or applying for and receiving grants to help manage your nonprofit. Your nonprofit can also engage in other business ventures or devise income generators like auctions of donated items, renting property, selling donated merchandise, or making investments, among others.How long will it take to start my nonprofit in Virginia?Much of your timeline for starting your nonprofit is up to you and your board. However, you can count on several critical forms taking days to months to arrive- though filing online will speed things up. All in all, it can take from a few months up to a year to get your nonprofit up and running in Virginia.Does My Virginia 501(c)(3) Nonprofit Need a Business License?Your nonprofit does not need a general business license from Virginia. However, you may need local licenses or permits depending on the location of your organization and the scope of your operations. Cities and counties oversee licensing and permits, so you will need to contact your county clerk to see what your organization needs.Do nonprofits pay taxes?According to section 501(C) of the IRS, nonprofits are not required to pay any amount as federal income tax. However, there are certain cases where they have to make some payments. For instance, if your nonprofit earns any unrelated business income, it must pay income taxes on that same amount. Similarly, every nonprofit that hires employees is liable to pay employee taxes, including Social Security and Medicare.Final Words: Starting a Nonprofit in VirginiaStarting a nonprofit is a big step, but it’s also an incredibly rewarding one. Now that you’ve read through our detailed guide, you’re well on your way to making a real difference. The first thing to focus on is defining your nonprofit’s purpose and mission. What do you want to achieve? Who will you help? Once you’ve got that figured out, everything else will start to fall into place.Yes, every state has its own rules and requirements for nonprofits, and Virginia is no exception. While there are differences, the good news is that most states follow similar frameworks. Still, it’s important to stay informed about the specifics so your nonprofit starts off on the right foot.One thing to keep in mind is that funding will always be a top priority. Running a nonprofit doesn’t just require passion—it requires resources. Fundraising platforms like Paybee can be game-changers by making it simple to set up online donation campaigns, organize virtual or in-person events, and keeping your donors engaged. A platform like this helps you spend less time worrying about logistics and more time focusing on your mission.Remember, it’s not just about raising money—it’s about building relationships. Donors and supporters want to feel connected to your cause; whether it’s through heartfelt thank-you emails, regular updates, or an engaging event- every interaction matters. Using a tool like Paybee can help streamline those efforts, so you never miss an opportunity to connect.Starting a nonprofit isn’t easy, but it’s most definitely worth it. You’ll face challenges along the way, yes— but every nonprofit does. When you have a clear purpose, the right tools, and a dedicated team, you’ll have everything you need to succeed. You’re not just starting an organization; you’re creating a lasting impact.