How to start a nonprofit in Illinois

Short answer: To start a nonprofit in Illinois, you incorporate by filing Articles of Incorporation — Form NFP 102.10 with the Illinois Secretary of State ($50 as of 2026), get a free EIN from the IRS, adopt bylaws, and seat a board of at least three directors. 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 Illinois side, you register with the Attorney General’s Charitable Trust Bureau using Form CO-1 before you solicit donations, then renew each year with Form AG990-IL. And state sales tax exemption is its own application: you ask the Illinois Department of Revenue for a sales tax exemption number (an “E-number”) on Form STAX-1, and only after IDOR issues it can the nonprofit buy free of 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 Illinois 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 Illinois follows the standard checklist, and most of it is federal rather than state-specific:

1. Incorporate as a not-for-profit corporation (the Illinois-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 Illinois layer on top.

Incorporating a nonprofit in Illinois

Illinois creates the nonprofit as a legal entity when you file Articles of Incorporation — Form NFP 102.10 with the Illinois Secretary of State, Department of Business Services. The filing fee is $50 as of 2026; confirm the current amount with the Illinois Secretary of State, since fees change. You can file by mail to Springfield, in person at the Chicago or Springfield office, or online through the state’s not-for-profit incorporation portal.

Form NFP 102.10 asks for the corporation’s name, its registered agent and registered office in Illinois, the names and addresses of the initial directors, and a statement of purpose. Illinois wants that purpose written narrowly and specifically rather than as a vague catch-all. Two pieces of language matter for the IRS later, and you should build them in at formation rather than amending afterward:

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

Illinois sets a real floor on board size: under the General Not For Profit Corporation Act, 805 ILCS 105/108.10, the board “shall consist of three or more directors.” Name those three initial directors on the Articles. A board of three unrelated people is also what the IRS wants to see on the Form 1023, so the state minimum and the federal expectation point the same direction.

The full breakdown of what these documents need is in articles of incorporation. Getting the purpose and dissolution language right at the start is what keeps the IRS from bouncing your 501(c)(3) application back for a fix.

Registering with the Illinois Attorney General

Here is the step that trips up nonprofits coming from a church background, where it often does not apply: Illinois requires charitable organizations to register with the Attorney General’s Charitable Trust Bureau before soliciting contributions from the public. A church taking offerings from its own congregation can frequently skip this; a general nonprofit asking the public for money cannot.

You register with Form CO-1, the Registration Statement for Charitable Organizations, filed alongside Form CO-2 (a financial information form) and copies of your founding documents. The registration fee is $15 as of 2026, paid to the “Illinois Charity Bureau Fund” (Illinois Attorney General, charity registration). Confirm the current forms and fee with the Charitable Trust Bureau before filing, since the office is moving registration to an online filing system.

Registration is not one-and-done. Every year afterward you file Form AG990-IL, the Charitable Organization Annual Report, which keeps your registration in good standing and carries its own $15 annual filing fee, with a late penalty if you miss the deadline (Illinois Attorney General, charity registration). The AG990-IL is filed with the IRS Form 990 attached, so it tracks your federal return. Treat this annual filing as the thing that keeps you legally allowed to fundraise in Illinois.

Getting the Illinois sales tax exemption (E-number)

A federal 501(c)(3) determination letter exempts your nonprofit from federal income tax, but it does nothing about Illinois sales tax. That break is a separate application, and it does not happen automatically — you have to ask for it.

Qualifying charitable, religious, and educational organizations apply to the Illinois Department of Revenue (IDOR) on Form STAX-1, Application for Sales Tax Exemption, or through MyTax Illinois. There is no fee to apply. With the form you attach your Articles of Incorporation, your bylaws, a narrative describing what the organization does, your IRS exemption letter if you have it, and a recent financial statement (Illinois Department of Revenue, PIO-37). If IDOR approves, it issues a sales tax exemption identification number — an “E-number” in the format E99XX-XXXX — and the application can take up to 90 days to process.

The E-number is the part that actually saves money. Once it is issued, the nonprofit gives that number to a seller and buys qualifying goods free of Illinois sales tax; without it, the organization pays sales tax like anyone else, since the exemption is not retroactive to the application date. So Illinois does exempt a qualifying charitable nonprofit’s purchases — but only after IDOR has issued the E-number, not the moment you incorporate.

Illinois 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 Illinois fees change.

What you’re doing	Agency	Form	Fee (as of 2026)
Incorporate the nonprofit	Illinois Secretary of State	Articles — Form NFP 102.10	$50 (confirm)
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 solicit donations	IL Attorney General	Form CO-1 + CO-2 (initial), AG990-IL (annual)	$15 initial
Apply for sales tax exemption	IL Department of Revenue	Form STAX-1 (issues E-number)	No fee

Setting up the books once the nonprofit exists in Illinois

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 the giving records donors need at tax time, and document that the board reviews the finances; the discipline is covered in nonprofit accounting. The Illinois date to keep on your calendar is the AG990-IL — that annual report to the Attorney General is what keeps your charitable registration current, and letting it lapse can stop you from legally soliciting.

FAQ

How much does it cost to start a nonprofit in Illinois? The required state cost is modest. Filing Articles of Incorporation (Form NFP 102.10) costs $50 as of 2026, and the Attorney General’s charitable registration (Form CO-1) is $15 — so the Illinois paperwork runs about $65 plus your time, and the sales tax exemption application (STAX-1) has no fee. 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). Realistically, a small Illinois 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 Illinois Attorney General? Yes, in most cases. Illinois requires charitable organizations to register with the Attorney General’s Charitable Trust Bureau using Form CO-1 before soliciting contributions, and to file Form AG990-IL each year afterward (Illinois Attorney General, charity 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 Illinois? The Illinois incorporation itself is relatively quick — the Secretary of State processes Articles in a couple of weeks by mail, faster online. The slow parts are federal and the state exemption: the IRS can take from about a month (Form 1023-EZ) to many months (full Form 1023) to issue the 501(c)(3) determination letter, and the Department of Revenue says the sales tax E-number application can take up to 90 days. Plan for the state entity to exist within a few weeks but the full tax-exempt picture to take several months end to end.

Can one person start a nonprofit in Illinois? Not as a complete board. Illinois law requires a not-for-profit board to consist of three or more directors under 805 ILCS 105/108.10, and you must name initial directors on the Articles. One person can drive the formation and serve as a director, but you need at least two more to meet the statutory minimum — and a board of three mostly-unrelated people is also what smooths the IRS Form 1023. So one founder can begin, but recruit a board of at least three before you file.

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Vestrybooks sets up a new Illinois 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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