Nonprofit status and tax-exempt status are two different legal statuses granted by two different sovereigns, and confusing them is the first and most expensive mistake founders make. This UpLaw guide walks the entire life cycle of a charitable organization, beginning with incorporation under state nonprofit corporation law and the purpose and dissolution clauses that satisfy the IRS organizational test, then turning to the operational test and the exempt purposes of Section 501(c)(3). It explains why public charity status matters enormously, how the Section 170(b)(1)(A)(vi) and Section 509(a)(2) public support tests are computed, and how the "tipping" problem can convert a thriving charity into a private foundation overnight. It covers the absolute prohibition on private inurement, the broader private benefit doctrine, the Section 4958 intermediate-sanctions regime and its automatic excess benefit trap, executive compensation and the rebuttable presumption of reasonableness under Treas. Reg. Section 53.4958-6, the substantial-part test and the Section 501(h) expenditure election, and the absolute ban on political campaign intervention. It then works through unrelated business income tax with its fragmentation and siloing rules, the Chapter 42 excise taxes that constrain private foundation life, state charitable solicitation registration and the attorney general's parens patriae role, the fiduciary duties of nonprofit directors, the employment and volunteer problems unique to mission-driven workplaces, and the Form 990 that makes all of it public. Because nonprofit corporate law, fiduciary duty, insurance, and charitable solicitation are state law, the guide teaches the majority and uniform-act framework rather than a nationwide rule, and names Delaware explicitly where corporate doctrine is the reference point. A running hypothetical, the Rivermouth Literacy Project, is carried from articles of incorporation through its first Form 990, with worked computations of the public support fraction, the Section 501(h) lobbying caps, an excess benefit transaction, and the UBIT silos.