Dreaming of starting your own nonprofit? While you can indeed do it solo, there are important legal requirements you need to know first. Keep reading to find out if a sole member nonprofit is the right fit for your organization.
If you’re thinking about starting a nonprofit, there are a few different ways you can structure it.
One option is a sole member nonprofit, where a single person has significant control over decisions and board appointments, giving founders the power to guide their organization’s mission for the long term.
In this post, we’ll walk you through how to set up a sole member nonprofit legally, plus the pros and cons, so you can determine if it’s the right option for you.
Yes, you can start a nonprofit organization by yourself, but there are some legal requirements to keep in mind.
Even though the IRS doesn’t see anyone as “owning” a nonprofit, one person can still have significant control over how it runs. That’s called a sole member nonprofit. As the sole member, you get to make major decisions and even appoint or remove the board members yourself.
This setup works really well if you want to keep a close eye on everything happening in your organization.
That said, there are some state rules and IRS requirements that come with it, which we’ll get into later in this post.
One thing to note: “sole member” isn’t the same as “sole board member.” Most states still require nonprofits to have a board of directors, even if you’re the only member.
While one person can run a nonprofit, a single member nonprofit works a little differently from a traditional nonprofit.
Many nonprofits used to be structured a lot like corporations, where members of the nonprofit vote to appoint, remove, or replace board members.
Today, more and more nonprofits have shifted to a self-sustaining structure, where the board itself decides when to remove old directors and bring in new ones.
But outside of these two common structures, there’s a third option: the sole member nonprofit. In this structure, a single person or entity holds the top-level authority.
While every nonprofit still needs a board of directors, the sole member can recruit, appoint, and unilaterally remove board members, often taking a seat on the board themselves.
The board governs the day-to-day operations and ensures the organization follows nonprofit rules, but the board can never remove the sole member; they always remain in that role.
This type of structure is especially common in faith-based organizations – like churches with voting members – and private foundations, where a single person or family wants to protect their vision and guarantee the nonprofit stays true to its original mission.
Overall, it provides an extra layer of protection and control for the founder, while still meeting legal governance requirements.
Like every nonprofit structure, there are some pros and cons of sole member nonprofits to consider before pulling the trigger.
Being classified as a sole member nonprofit can make running your organization simpler and more efficient, but it also comes with some important legal requirements.
Federal tax laws determine your nonprofit status, but state-specific laws shape how your single member nonprofit can operate.
A sole member nonprofit in California may look different than one in Minnesota, so it’s important to know the specifics for your state.
Here’s a breakdown of what you need to know:
Sole member nonprofit bylaws are your organization’s rulebooks. They need to clearly spell out the sole member’s rights and responsibilities so there’s no confusion later.
And while bylaws guide your everyday operation, Articles of Incorporation establish your nonprofit legally with the state. You file this document through your Secretary of State.
As we mentioned, even if you’re the sole member, most states still require nonprofits to have a board to oversee legal and financial compliance.
The board handles day-to-day operations and makes sure your nonprofit follows the law, giving your organization an extra layer of accountability.
State laws vary, and some have specific rules for sole member nonprofits. These rules may limit your control in certain areas or require additional financial oversight.
In fact, some states don’t allow sole member nonprofits at all. In those places, you’ll need to form a traditional multi-member structure instead.
Here are some examples of states that require more than one member:
Many states allow nonprofits to claim property tax exemptions if their activities align with their tax-exempt mission. Make sure your nonprofit meets the state’s requirements and keeps the records needed to file a claim.
Most states also ask nonprofits to file annual reports showing finances, board members, and any staff changes. These reports keep your organization transparent and in good standing with the state.
Some states limit how much authority a sole member can exercise. These rules are meant to protect the public interest and ensure that the nonprofit remains mission-driven rather than controlled entirely by one person.
Remember, laws differ a lot from state to state, so it’s always a good idea to check your specific state’s regulations to stay compliant and maintain your sole member nonprofit’s tax-exempt status.
Once you have your mission and the name for your nonprofit, it’s time to make it official!
Here are some quick next steps to bring your vision to life:
Establishing a sole member nonprofit can be a solid choice if you want to maintain strong, long-term control over your organization’s mission.
Just be sure to avoid “founder’s syndrome,” follow your state’s laws, and create clear sole member nonprofit bylaws that openly explain your organization’s structure.
No matter which setup you choose, Donorbox offers tools to help you run your nonprofit smoothly and stay focused on your mission.
From customizable donation pages and embedded forms to membership management and donor tracking, there’s plenty to help you save time and raise more funds.
Start for free today and discover how Donorbox can make managing your nonprofit a whole lot easier.
Yes, you can start a nonprofit on your own, but you’ll need to follow laws specific to your state and IRS requirements. Even as a sole member, most states still require a board of directors to oversee governance.
Yes, some states allow sole member nonprofits, but rules vary widely. States like Florida, Texas, and New York require multiple members, so a sole member structure isn’t permitted there.
Starting a 501(c)(3) on your own gives you more control over decision-making and board appointments. It also allows you to protect your vision and maintain continuity while still enjoying tax-exempt benefits.
With a background in professional writing, Lydia has over five years in nonprofit communications under her belt. Lydia’s passion for supporting nonprofits sparked during her college internships with global mission organizations, where she gained valuable insights into fundraising marketing strategies. These experiences have continued to fuel her dedication to empowering nonprofits through her writing.
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Lydia Wohlgemuth