The first step is setting up a nonprofit corporation—the legal entity you will use to operate your business. The next step is to set up a dedicated bank account for your nonprofit. You will need to file articles of incorporation with the state in which you are incorporating your nonprofit. You should also apply for tax-exempt status with the IRS and Franchise Tax Board, which can take up to six months or more before approval is granted. Once that is done, similar to an S or C corp, you can pay your officers or shareholders dividends from net profits.