Becoming a non-profit corporation involves two major steps: forming a corporation in a particular state, and getting non-profit status for that corporation with the IRS.
Incorporation is a mere formality (or rather, a long long series of mere formalities). You can become a corporation in a matter of months, even weeks. Then you get to pay corporate taxes. Yay!
The process of getting non-profit status for your corporation is somehow both very vague and painfully rule-bound. The entire process can easily take more than a year.
- Do not become a non-profit to pay the rent next month. The non-profit option is only suited to very long-term stability and growth.
- Non-profits are public charities, so they have to get a major portion of their budget from small donations. You should probably only consider non-profit staus if you are already receiving a significant amount of money from people in your community.
- Non-profit corporations can make a profit (it must be fed back into the corporation), and you can sell goods and services for a reasonable price. In fact, it's a good idea to only consider non-profit status if you already have a steady income stream of some kind.
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PDF: What you need to know before starting a nonprofit - 2.5 Mb