You are correct, the length of time it takes to start a nonprofit DOES depend on many factors. However, if you have a clear, defined idea that provides services to the community in a unique and/or underserved area, things can move along fairly quickly. There are two main parts to the process of starting a nonprofit:
1.) Incorporation with the Minnesota Secretary of State's Office
The nonprofit needs Articles of Incorporation and Bylaws. The Articles of Incorporation are like the organization's Declaration of Independence (setting out the purpose(s), requirements, prohibitions, etc.) and the Bylaws are like the organization's Constitution (setting out how the organization functions - members, Directors, Officers, rules, etc.). The Articles of Incorporation get filed with the MN Secretary of State's Office, and the Bylaws are an internal document. Once the organization has filed its Articles with the Secretary of State, it becomes incorporated. In general, incorporation limits the liability of the individuals that operate the organization. The organization will need at least three (3) people to serve as the initial Board of Directors, and will need at least the following two (2) officers: President and Treasurer.
2.) Tax exempt status with the IRS
Once the entity is formed, the organization will need to file for tax exempt status with the IRS. This application is called the Form 1023 (if the organization qualifies to become a 501(c)(3)) or the Form 1024 (if the organization is a different type of 501(c) organization).
The filing fee with the State of Minnesota to incorporate is $70. The filing fee with the IRS is either $400 or $850 (depending on whether the organization’s gross income over the first three (3) years is above or below $10,000 each year).
Generally, it takes a couple of weeks to get incorporated, and then another few weeks to complete the IRS application to apply for 501(c) status. Once the IRS receives the application, it generally takes 6-9 months for the IRS to review the application. The process may be shorter depending on the uniqueness of the organization's mission and if the organization has a potential donation that is contingent on receiving the tax-exempt status by a certain date.
My firm, Urban Law Group, PLLC, helps nonprofit organizations get started, incorporate, and file for tax-exempt status everyday. Please visit http://www.urban-law-group.com for more information. Call (612) 284-6441 for an appointment.
The prior answer summarized the steps very well. One point to keep in mind is that once you incorporate you can begin acting. You do not have to wait to get a tax exemption from the IRS to operate. Not having the exemption may limit your ability to raise funds or bring in revenue, but it does not preclude you from starting to operate.