To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.

Forming a new non-profit is a process that involves two distinct steps. Generally, interested parties that are not yet a 501(c)3 will need to file articles of incorporation with the appropriate agency in their state (usually the state's secretary of state). Next, they will also need to secure federal income tax exemption by filing the appropriate forms with the Internal Revenue Service (IRS).