How To Start A Nonprofit Organization in South Dakota In 12 Steps

Answer these questions to shape your nonprofit's purpose:

• What specific problem in South Dakota will your organization address?
• Who is your target population or beneficiary group?
• What programs, services, or activities will you provide?
• How will you measure meaningful impact within the first 6–12 months?

If your plans include fundraising, map out your budget and funding approach early. South Dakota is home to several strong community funding resources, including the South Dakota Community Foundation, which supports mission-driven organizations across the state.

Your mission statement guides your Articles, your bylaws, and IRS Form 1023. Aim for 15–20 words—action-oriented, specific, and compelling.

South Dakota Entity Types

Your name becomes official when you file your Articles of Incorporation with the South Dakota Secretary of State. Confirm availability through the entity search before submitting.

Fictitious Business Names (DBAs)

If your nonprofit operates under a name other than its legal corporate name, South Dakota calls this a "Fictitious Business Name." Incorporated nonprofits file their Fictitious Business Name online through the SD SOS Enterprise portal. The filing fee is $10 per name, and registration is valid for five years.

Important: A Fictitious Business Name cannot be used to form, create, or register a nonprofit corporation. Your organization must be properly incorporated through the Secretary of State's office first.

South Dakota Officer Requirements

Minimum officers are typically a president, secretary, and treasurer, as defined in your bylaws. Terms are set by the bylaws within the constraints of state law. One individual may hold more than one office.

Key Steps:

• Recruit: Identify 3 or more directors with mission alignment and complementary expertise (finance, legal, community relations).
• Organizational Meeting (after filing Articles): Adopt bylaws, appoint officers, authorize EIN and bank account, and establish a conflict of interest policy.
• Document: Keep thorough meeting minutes—these are required for IRS Form 1023 compliance.

Strongly consider Directors and Officers (D&O) liability insurance, even in the early stages. South Dakota does provide volunteer immunity protections under SDCL § 47-23-29, but D&O coverage fills gaps that statutory immunity does not.

Carefully drafted bylaws reduce internal disputes, support sound decision-making, and signal to the IRS that your nonprofit operates with integrity and accountability.

Your Options

1. Use Your Own Registered Agent: Appoint a director, officer, or South Dakota resident using their physical address—note this becomes public record.
2. Hire a Professional Registered Agent Service: Professional services provide privacy, compliance tracking, and consistent availability for an annual fee. The Secretary of State maintains a list of approved commercial registered agents at sdsos.gov.

Filing Details: Appoint your registered agent during formation when filing your Articles of Incorporation with the SD SOS Enterprise portal.

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Why Your Nonprofit Needs an EIN

Your EIN is required to:

• Open a dedicated nonprofit bank account
• Hire staff or run payroll
• File federal tax returns and annual information reports
• Apply for grants or other funding opportunities
• Accept and process charitable contributions

Information Required for Application

Have the following ready:

• Legal name, address, and stated purpose from your Articles of Incorporation
• Responsible party details (a principal officer or director with a valid SSN or ITIN who manages the organization's finances)
• Entity type: Select "Other Nonprofit/Tax-Exempt Organization"

After You Get Your EIN

Use it immediately for banking, Form 1023, and state applications. Save your IRS confirmation letter in your organizational records—IRS systems may take up to 2 weeks to fully update.

Common 501(c) Paths

• 501(c)(3): For charitable, educational, religious, and scientific organizations. Apply using Form 1023 or Form 1023-EZ.
• 501(c)(4): For social welfare and advocacy groups. Apply using Form 1024-A.
• Others: Professional associations and similar entities. Apply using Form 1024.

Key Points:

• Form 1023-EZ: The faster route for qualifying smaller organizations. File via Pay.gov; requires completing an eligibility pre-check.
• Form 1023: The full application for larger or more complex organizations. Submit through Pay.gov after your EIN has been issued.

What You Will Typically Prepare

• Filed Articles of Incorporation with 501(c)(3) mission language and asset dissolution clause
• Adopted bylaws, conflict of interest policy, document retention policy, and whistleblower policy
• Projected financial statements or budget
• Evidence of a minimum of 3 independent board members

Determination Letter

Your IRS Determination Letter is official confirmation of your tax-exempt status. It is essential for accessing grant funding, accepting tax-deductible contributions, and qualifying for any applicable South Dakota state tax benefits. Current IRS processing times average 1–3 months for Form 1023-EZ and 6–12+ months for the full Form 1023.

Steps To Open a Nonprofit Bank Account

Complete these steps after your Articles of Incorporation, EIN, and bylaws are in place:

• Hold an initial board meeting and pass a resolution naming authorized signatories.
• Gather required documents: filed Articles of Incorporation, IRS EIN confirmation letter, adopted bylaws, board resolution, and government-issued IDs for each authorized signer.
• Choose a nonprofit-friendly checking account with low or no monthly fees.

Maintain Federal Compliance

File an annual Form 990 (or the appropriate variant: 990-N, 990-EZ, or full 990) to report your nonprofit's activities and preserve your 501(c)(3) status. Failure to file for three consecutive years results in automatic IRS revocation of your tax-exempt status—with no warning beyond the initial notice.

File Your South Dakota Annual Report

South Dakota nonprofits are required to file an Annual Report with the South Dakota Secretary of State each year. Filing is done through the SD SOS Enterprise portal.

• Due Date: The first day of your anniversary month each year. For example, if your Articles were approved on June 14, your Annual Report is due by June 1 each subsequent year.
• Filing Window: The Secretary of State opens the window 30 days before the due date.
• Fee: $10 online / $25 by paper (base $10 fee plus the $15 paper processing surcharge).
• Late Fee: Nonprofit corporations are exempt from the late fee penalty that applies to for-profit entities, but repeated failure to file can result in administrative dissolution.

Ongoing Compliance

Keep your registered agent information current, hold regular board meetings and record minutes, and maintain any applicable state tax exemption status. Consistent filings protect your exempt status and reinforce confidence among donors and grantmakers.

Corporate Income Tax Exemption

No application required. South Dakota has no corporate income tax whatsoever, per the South Dakota Department of Revenue. There is no state income tax for which a nonprofit would need to seek exemption. Your IRS Determination Letter does not trigger any South Dakota filing because there is nothing to apply for.

Sales Tax Exemption

South Dakota does have a state sales tax (4.2% statewide, with municipal additions), but the exemption is narrow and does not apply to all 501(c)(3) organizations.

What You Must Know

Qualifying organizations receive a permit number with the letters "RA" and must provide an exemption certificate to vendors at the time of purchase. Only organizations whose exclusive mission is serving the poor, distressed, or underprivileged qualify.

Membership organizations, churches, advocacy nonprofits, educational organizations, and most other 501(c)(3)s do not qualify for this exemption under South Dakota law.

If you do not meet the "relief agency" definition under SDCL § 10-45-5.6, do not apply—you will not be approved, and your purchases will remain subject to state sales tax.

If you are a 501(c)(3) incorporated in South Dakota and you want to solicit donations from South Dakotans, you can do so without registering with any state agency.

South Dakota is one of approximately ten states nationally that impose no charitable registration requirement on charitable organizations themselves. In most other states, this would be a multi-step, fee-based process requiring renewal each year.

The One Exception: Paid Telephone Solicitors

If your nonprofit hires a third-party professional to conduct telephone solicitation campaigns on your behalf, that paid solicitor must register and post a bond with the South Dakota Attorney General's Office, Division of Consumer Protection, under SDCL Chapter 37-30. The solicitor is also required to file solicitation campaign notices and financial reports with Consumer Protection. This obligation falls on the solicitor—not on your organization—but you should confirm your paid fundraiser is registered before any campaign begins.

Raffle and Gaming Rules

South Dakota permits charitable raffles and bingo without a state-level license. The rules under SDCL §§ 22-25-23 through 22-25-25 are straightforward:

• Raffles must be conducted by a nonprofit or charitable organization.
• Your organization must provide written notice to the governing body of the municipality or county where the drawing is held at least 30 days before selling any tickets.
• If tickets are sold statewide, written notice must also be provided to the South Dakota Secretary of State.
• Online raffle ticket sales are permitted in South Dakota.
• No surety bond is required of the charitable organization.