According to CharityLawyer's Ellis Carter, an Arizona lawyer specializing in nonprofit law:
The corporation should be incorporated somewhere that is connected to its activities. Consider where the board members reside, where funds are raised, and where events are held.
If there is no clear connection to any particular state, the second criteria I would consider is a state that does not over-regulate nonprofits. California and New York are examples of states that subject nonprofits to incredible regulation. In my experience, Delaware, Nevada, Arizona and Wisconsin impose fewer regulations on nonprofits. There are surely other jurisdictions that fall into this category, but my response is based on states where we have experience. (Source: Joanne Fritz, About.com)
To quickly find each state's requirements for nonprofit incorporation and other startup resources, see our Nonprofit Startup Resources by State web area. Staff-selected websites below also may help.
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