How to start a nonprofit in California

Short answer: To start a nonprofit in California, you incorporate by filing Articles of Incorporation — Form ARTS-PB-501(c)(3) with the California Secretary of State ($30 as of 2026), get a free EIN from the IRS, adopt bylaws, and seat a board. Then comes the part people miss: a nonprofit is not automatically tax-exempt, so you file IRS Form 1023 (or 1023-EZ) to become a 501(c)(3). On the California side, you file the Statement of Information (Form SI-100), register with the Attorney General’s Registry of Charities and Fundraisers (Form CT-1) before you fundraise, and claim state tax exemption from the Franchise Tax Board (Form 3500A if you already hold the federal letter). Skip the FTB step and your nonprofit owes California’s $800 minimum franchise tax. And one honest warning most guides bury: California generally does not exempt nonprofit purchases from sales tax.

The federal core — EIN, bylaws, board, and the 501(c)(3) application — is the same in every state. For the full national walkthrough, read how to start a nonprofit; this page focuses on the California layer stacked on top of it, where the state-specific forms, fees, and agencies actually live.

The formation steps that are the same anywhere

Forming a nonprofit in California follows the standard checklist, and most of it is federal rather than state-specific:

1. Incorporate as a nonprofit public benefit corporation (the California-specific part — covered in detail below).
2. Get an EIN — a free federal tax ID from the IRS, applied for directly at irs.gov. Never pay a third party for one; the EIN is always free.
3. Adopt bylaws — the organization’s internal rulebook for decisions, leadership, and money. Start from a proven document rather than a blank page; see nonprofit bylaws for what to include.
4. Seat a board of directors who govern the organization, set policy, and hold it accountable.
5. Apply for 501(c)(3) with Form 1023 — this is the step that turns a nonprofit corporation into a tax-exempt charity. Unlike a church, an ordinary nonprofit is not automatically exempt; you must file IRS Form 1023 (or the streamlined Form 1023-EZ if you qualify) and receive a determination letter (IRS, applying for 501(c)(3) status). The full path is in how to start a 501(c)(3).
6. Open a bank account in the nonprofit’s legal name using the EIN and formation documents.
7. Set up the books on fund accounting from day one, before the first grant or donation arrives.

Each of these is walked step by step in the national formation guide linked above. The rest of this page is the California layer on top.

Incorporating a nonprofit in California

California creates the nonprofit as a legal entity when you file Articles of Incorporation of a Nonprofit Public Benefit Corporation — Form ARTS-PB-501(c)(3) with the California Secretary of State. The filing fee is $30 by mail as of 2026 (in-person drop-off adds a $15 service fee); confirm the current amount with the California Secretary of State, since fees change. You can file by mail to Sacramento or online through the state’s bizfile portal.

Form ARTS-PB-501(c)(3) asks for the nonprofit’s name, its agent for service of process in California, and its statement of purpose. The Secretary of State’s pre-printed template already includes the two clauses the IRS will look for, and you should keep them in rather than stripping them out:

• A 501(c)(3) purpose clause stating the organization is formed exclusively for charitable, religious, educational, or other exempt purposes.
• A dissolution clause stating that if the nonprofit closes, its assets pass to another 501(c)(3) organization, not to any individual.

Getting that language right at formation saves an amendment later. The full breakdown of what these documents need is in articles of incorporation. California law sets a low bar on board size — a public benefit corporation may have as few as one director under Corporations Code section 5151 — but three unrelated directors is the practical standard, and the IRS treats a one-person board as a red flag on the 1023.

One follow-up the state requires of every new corporation: within 90 days of filing your Articles, you must submit the Statement of Information (Form SI-100) to the Secretary of State, which carries a $20 fee and then repeats biennially (every two years). The SI-100 keeps your officers, address, and agent for service of process current on the public record; miss it and the state can suspend the corporation.

Registering with the California Attorney General

Here is the step that trips up nonprofits coming from a church background, where it usually does not apply: California requires most charities to register with the Attorney General’s Registry of Charities and Fundraisers before — or very soon after — they start holding charitable assets or soliciting donations. A church taking offerings can often skip this; a general nonprofit asking the public for money cannot.

You register first with Form CT-1, the Initial Registration Form. The initial registration fee is $50 as of 2026, paid by credit card or ACH, and registration must be completed within 30 days of first receiving charitable assets — donations, grants, property, or any contribution of value (California Attorney General, initial registration). Once you submit Form CT-1 with your founding documents and fee, the Registry assigns a State Charity Registration Number.

Registration is not one-and-done. Every year afterward you file Form RRF-1, the Annual Registration Renewal Fee Report, alongside your IRS Form 990 (or the state’s Form CT-TR-1 for smaller organizations). The RRF-1 fee is not flat — it scales with your total revenue, roughly $25 to $1,200 depending on the year (California Attorney General, charity forms). Confirm the current fee tiers with the Attorney General before filing, since the schedule has been revised.

Getting California tax-exempt status (FTB)

A federal 501(c)(3) determination letter exempts your nonprofit from federal income tax, but it does not automatically exempt you from California’s franchise and income tax. That exemption is a separate application to the Franchise Tax Board (FTB), and skipping it is expensive.

Most new nonprofits use Form 3500A, Submission of Exemption Request — the short, two-page form available to organizations that already hold a federal determination letter under IRC 501(c)(3) (and a handful of other subsections). You attach a copy of the IRS letter, and once the FTB acknowledges it, the organization is exempt from California franchise and income tax (FTB, 2025 Form 3500A instructions). Nonprofits that do not yet have the federal letter, or that want California exemption first, file the longer Form 3500, Exemption Application instead.

Why this matters: every California corporation that is not tax-exempt owes the $800 minimum franchise tax each year, whether it is active, inactive, or operating at a loss. A nonprofit that incorporates but never files for FTB exemption is, in the state’s eyes, just a corporation that owes $800 a year. The exemption is what makes the nonprofit actually exempt at the state level, so treat the FTB filing as a required step, not a nicety.

Sales tax and your California nonprofit

Now the honest answer most state guides skip: California generally does not give nonprofits a blanket sales tax exemption. There is no broad sales-and-use-tax break for charitable organizations the way there is for income tax. Under California law, all sales of tangible personal property are taxable unless a specific exemption applies — and that rule treats a nonprofit the same as a for-profit business (CDTFA, Tax Guide for Nonprofit Organizations).

So a typical California nonprofit pays sales tax on the equipment, supplies, and goods it buys, and may owe sales tax on items it sells. The exceptions are narrow and specific — certain qualifying sales by particular kinds of organizations (some thrift-store and welfare-exemption situations, certain sales of food or to specific groups) — and each must be analyzed on its own facts through the California Department of Tax and Fee Administration (CDTFA), not assumed. Budget as if your purchases are taxable, then check whether any narrow exemption actually fits your activities before you rely on it.

California filing at a glance

The table below maps each step to its agency, form, and cost. Treat the fees as accurate as of 2026 and confirm with the listed agency, since California fees change.

What you’re doing	Agency	Form	Fee (as of 2026)
Incorporate the nonprofit	California Secretary of State	Articles — Form ARTS-PB-501(c)(3)	$30 by mail (confirm)
File Statement of Information	California Secretary of State	Form SI-100 (within 90 days, then biennial)	$20
Get a federal tax ID	IRS	EIN application (online)	Free
Apply for 501(c)(3) status	IRS	Form 1023 or 1023-EZ	$600 / $275 user fee
Register to fundraise	CA Attorney General	Form CT-1 (initial), RRF-1 (annual)	$50 initial
Claim state tax exemption	Franchise Tax Board	Form 3500A (or 3500)	No fee
Sales tax on purchases	CDTFA	—	Generally taxable (no blanket exemption)

Setting up the books once the nonprofit exists in California

Once the entity is formed and the exemptions are filed, the work shifts from one-time paperwork to the monthly routine — and that routine is where nonprofits either hold together or quietly fall apart. A nonprofit holds money in trust for the people and purposes it serves, much of it restricted by donors or grant terms, so it tracks money by fund rather than as a single bottom line. Set the books on fund accounting before the first grant lands, keep giving records donors need, and document that the board reviews the finances; the discipline is covered in nonprofit accounting. The California angle to keep on your calendar is the RRF-1 — that annual renewal to the Attorney General is what keeps your charitable registration current, and letting it lapse can put the registration into delinquent status.

FAQ

How much does it cost to start a nonprofit in California? The required state cost is modest. Filing Articles of Incorporation (Form ARTS-PB-501(c)(3)) costs $30 by mail as of 2026, the Statement of Information (SI-100) is $20, and the Attorney General’s initial registration (Form CT-1) is $50 — so the California paperwork runs about $100 plus your time. The bigger line item is federal: the IRS charges a $275 user fee for Form 1023-EZ or $600 for the full Form 1023, which is what actually makes you a 501(c)(3). The FTB state-tax-exemption form (3500A) has no fee. Realistically, a small California nonprofit can be stood up properly for a few hundred dollars once you include the federal exemption application.

Do you have to register a nonprofit with the California Attorney General? Yes, in most cases. California requires charities holding charitable assets or soliciting donations to register with the Attorney General’s Registry of Charities and Fundraisers using Form CT-1, generally within 30 days of first receiving charitable assets, and to renew every year with Form RRF-1 (California Attorney General, initial registration). This is separate from incorporating with the Secretary of State and separate from your IRS 501(c)(3) application — it is the fundraising registration, and skipping it can put your organization out of compliance before you have raised a dollar.

How long does it take to start a nonprofit in California? The California incorporation itself is relatively quick — Secretary of State processing for Articles often runs around two weeks by mail, with paid expedite options for faster turnaround. The slow part is federal: the IRS can take anywhere from about a month (Form 1023-EZ) to many months (full Form 1023) to issue the 501(c)(3) determination letter, and you usually want that letter before filing the FTB’s Form 3500A. Plan for the state entity to exist within a few weeks but the full tax-exempt status to take several months end to end.

Can one person start a nonprofit in California? Legally, California allows a nonprofit public benefit corporation to form with as few as one director under Corporations Code section 5151. In practice, a one-person board is a poor idea: the IRS scrutinizes single-director nonprofits on the Form 1023, and a board of at least three mostly-unrelated directors signals real governance and smooths the 501(c)(3) application. So one person can begin the process, but you will want to recruit a board before applying for tax-exempt status.

If you are specifically starting a religious congregation rather than a general charity, the rules differ in a few meaningful ways — see starting a church in California for that path, which skips some of the steps above.

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Vestrybooks sets up a new California nonprofit’s books on fund accounting from day one — funds, reconciliation, and the board reports — so the financial side is right before the first grant arrives. See how it works.

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