Free Resources to Start and Manage Your 501(c)(3) or Private Foundation

Form 1023-EZ typically takes 2–8 weeks from IRS submission. Full Form 1023 often takes 3–6 months. The clock starts when your application is submitted and acknowledged by the IRS, not when you begin drafting documents.

Public charities receive broad support from the general public and must meet IRS public support tests. Private foundations are usually funded by a single family, individual, or company, and are subject to stricter rules on self-dealing, investments, and minimum annual distributions.

Not in every case. Many straightforward 501(c)(3) formations can be handled with experienced administrative and compliance support. You may need an attorney for complex governance structures, major transactions, or unusual programs.

Many families spend $15,000–$50,000 per year in operating costs. This can include administration ($15,000–$33,000), 990-PF preparation ($2,000–$5,000), audits when required ($5,000–$15,000), insurance ($1,000–$3,000), and other compliance costs.

Yes, you can pay reasonable compensation for actual services rendered. Board members can be compensated if it is properly documented and reasonable. In private foundations, compensation to disqualified persons requires extra care to avoid self-dealing—documentation and comparability data are critical.

Private foundations must distribute roughly 5% of their average net investment assets each year for charitable purposes. Qualifying distributions include grants, certain program expenses, and reasonable administrative costs directly tied to charitable activities.

Form 1023-EZ is generally available if you expect under $50,000 in annual receipts for the first 3 years, have under $250,000 in total assets, are less than 3 years old, and are not a hospital, school, HMO, or supporting organization. If you do not meet all criteria or have complexity, you likely need the full Form 1023.