If you’ve got a team or club or you want to start a team or club, you may consider setting it up as an unincorporated nonprofit association. This guide makes it easy and enables your team or club to have a life of its own, open a bank account and enter into contracts.
First, what is an unincorporated nonprofit association? According to the IRS, an association is:
...a group of persons banded together for a specific purpose. To qualify under section 501(a) of the Code, the association must have a written document, such as articles of association, showing its creation. At least two persons must sign the document, which must be dated.
Being an unincorporated association formalizes your organizations status and allows you to open a bank account and enter contracts in the association's name.
To create your association you'll want to take the following steps:
- Write and sign bylaws showing your association's creation
- Get an EIN from the IRS
- Optionally: open a bank account in the associations name
Create Bylaws (using our easy template)
Bylaws is a fancy word for “rules” of how your association is governed. It’s your association’s constitution.
The main requirement for your association is to have a written document showing it’s creation that’s signed by at least two people and dated.
You don’t need to be a lawyer to write them and we’ve created a bylaws template as an example. Everything is written in plain english, but you’ll see some special language in there that is recommended by the IRS in order to qualify as nonprofit.
Get an EIN (in less than five minutes)
You’ll also want to get an EIN which is a federal tax identification number for your association. You can get one online from the IRS in five minutes and you’ll need it to open a bank account and do other business for your organization.
To get started, go to the IRS EIN Assistant website.
You’ll want to choose “View additional Types, Including Tax-Exempt and Governmental Organizations”.
You can then choose your organization type, such as a youth sports organization as shown below.
Continue with the steps and at the end you’ll have the option of receiving a PDF of your EIN verification letter. Be sure to keep this as you’ll need it to open a bank account and perform other official business for your association.
Open a bank account (online in minutes)
Next, you’ll want to open a bank account for your organization. You can read our full guide, or head over to our website and open up an online bank account in minutes that gives you everything you need to manage your team or club’s money, including budgeting tools and online payments to collect dues.