These services can strengthen the capacity of a developing nonprofit that may want to focus on its mission rather than administrative and operational logistics. To begin this process, the project will write a grant request to the intended sponsor, outlining the requirements needed for the project. Potential Benefits of Having a Fiscal Sponsor. Once you have an idea of how similar organizations are operating and who their fiscal sponsors might be, it’s time to research fiscal sponsor directories. In a time of active experimentation in terms of programs and organizational form, and in a context of some turbulence, the ability to test ideas without setting up formal organizations to hold them becomes increasingly important.”, “Not everyone is quick to believe that formal nonprofits are the right choice. The fiscal sponsor is not just an administrator who receives money, issues receipts and checks, and handles paperwork. Many fiscal sponsor organizations exist with specific visions in mind and their advice can greatly increase the success of certain projects. In addition, fiscal sponsors highly value those who have purpose-driven solutions that apply social innovation. A fiscal sponsor is a unique type of nonprofit organization that shares its 501 (c) (3) status with unincorporated nonprofit projects. Please check your entries and try again. This still falls within the IRS nonprofit requirements for tax exemption because fiscal sponsors have a legal responsibility to manage the donor contributions. This allows projects to receive grants and tax-exempt donations from government, foundations, and individuals. Heluna Health is one of the nation’s largest and most well-established fiscal sponsors that provides an array of services ranging from fiscal sponsorship, client support, and grant management services. Stay up to date on news from Community Initiatives and learn about the incredible work of our 90+ projects. For example, Heluna Health supports clients with a team of contract managers, accountants, and human resource specialists to help them execute population health projects. What Are the Different Types of Fiscal Sponsorships? When the time comes, fiscal sponsors can also be a big help in achieving grant renewals. taking on the responsibility of receiving and administering charitable contributions on behalf of the sponsored organization Community Initiatives is a member of the National Network of Fiscal Sponsors. Lawyers providing counsel to would-be founders of nonprofits who appear inadequately prepared to set up a sustainable organization should inform their clients of the fiscal sponsorship alternative.”, “Why might conversation about fiscal sponsorship be particularly important right now? Instead of starting your own nonprofit, you can work with an existing 501 (c) (3) public charity under a formal arrangement known as fiscal sponsorship.

Finding a fiscal sponsor that matches your project needs and aligns with your mission can be extremely helpful. Donations made to a direct project are controlled by the sponsor. To 501(c)(3) or Not to 501(c)(3): Is That the Question? It may allow an individual artist to fund the creation of a mural, a group to hold a crowdfunding campaign for pediatric cancer research, or a manufacturer to create and distribute products to regions devastated by a recent natural disaster.”, “It is likely that a great majority of individuals and groups interested in forming a nonprofit have never considered, nor even heard of, fiscal sponsorship. COVID-19 CORONAVIRUS REGIONAL RESPONSE FUND. If a project is trying to hit the ground running, a fiscal sponsorship can help them do precisely that. Fiscal sponsors can offer economies of scale for many services. The fiscal sponsor receives contributions for the project, and then the receipt for these donations will later be reported when the sponsor files its taxes with the IRS. It can also be challenging for the project to separate themselves from the sponsor depending on the type of fiscal sponsorship chosen. This is because the project is not completely managed by the fiscal sponsor. In the grant model, the project is still responsible for its own tax compliance.
If you are the one managing the project, it’s important to know that the sponsor will be charging a fee for their administrative services. Fiscal sponsors can help not only with contract development and negotiation but also make sure that grant compliance and reporting are streamlined. This allows projects to receive grants and tax-exempt donations from government, foundations, and individuals. Grantmakers also tend to give to organizations rather than an individual, which can lead to more funding opportunities for a budding project or program.

What is a fiscal sponsorship arrangement, and how does it work? In addition, some developing nonprofit organizations find that the fiscal sponsorship model works for their cause in the long-term, or that the benefits of having the fiscal sponsor performing administrative duties work well for their program. In addition to the basics, having a fiscal sponsor can be extremely helpful, if not essential, in navigating the complex world of grants and contracts management.

As long as you educate yourself on the impacts and identify the main reasons a project would benefit from this sponsorship, you can make the best decision on whether or not the arrangement is a fit for your project or program. It is important to get a feel for the industry or field you are working in before making a decision. Visit Heluna Health’s website to see if Heluna Health may be the right fiscal sponsor for your population health project. A fiscal sponsorship is an excellent solution for many social impact projects; however, it is still important to know the facts before engaging in this type of partnership. For someone trying to start their own nonprofit, fiscal sponsorship allows them to seek grants and tax-deductible donations through their sponsor’s tax exempt status.

If the sponsor has this responsibility, they will practice greater control over the allocation of the funds, ensuring that grants and donations are distributed properly. Financial management is taken care of by a team of professionals, increasing the confidence of funders. This means that the fiscal sponsor must manage and distribute the funds appropriately when managing donations for the project. The two most common forms of fiscal sponsorships include the grant model and the direct model. 1000 Broadway, Suite #480 • Oakland, California 94607 • (415) 230-7700. At this point, the sponsor has to approve the project before moving forward. “Fiscal sponsorship is a formal arrangement in which a 501 (c) (3) public charity sponsors a project that may lack exempt status. Social impact projects can succeed and thrive due to the support, oversight, and administrative services that a fiscal sponsor can provide. For someone trying to start their own nonprofit, fiscal sponsorship allows them to seek grants and tax-deductible donations through their sponsor’s tax exempt status. View our, services provided at Community Initiatives, Fiscal Sponsorship: A Hidden Resource for Nonprofit Entrepreneurs, Alternatives to Forming a Charitable Nonprofit, Fiscal Sponsorship: A Response to the Overinstitutionalization of the Civil Sector. The key elements of a fiscal sponsorship proposal should include: It always helps to show that a nonprofit cause is organized and well-prepared. Since the activities will be carried out by employees, the core relationship is the one between employer and employee. All of the technical support aside, the true value that comes with finding a suitable fiscal sponsor for a project is the fact that the sponsorship aligns with what the project or program’s mission and unique needs. View our Privacy Policy here. In essence, this, Why Organizations Choose to Have a Fiscal Sponsor. The most common benefit the fiscal sponsor provides is to accept, manage, and allocate donations or funds for the project. A more detailed fiscal sponsorship definition is this: Fiscal sponsors are existing nonprofit organizations that provide fiduciary oversight, financial management, and other administrative services to help build the capacity of charitable projects. A fiscal sponsor serves as the administrative “home” for your cause. Projects that are either time-sensitive or short-term are great candidates for a fiscal sponsorship. ’s website to see if Heluna Health may be the right fiscal sponsor for your population health project. Projects can launch quickly, without having to file for 501(c)(3) status. This partnership is more of an employer-employee relationship, while the volunteers and staff become part of the team of the employees for the fiscal sponsor. Finding a fiscal sponsor with a similar mission to one’s own cause can be a fruitful endeavor on many levels. Community Initiatives is registered as a tax-exempt 501(c)(3) nonprofit organization. Unlike the grant model, a project that leverages the direct model of fiscal sponsorship actually becomes part of the fiscal sponsor’s organization.

How to Find a Fiscal Sponsor That’s Right for Your Cause, What to Include in a Fiscal Sponsorship Proposal, How the sponsorship furthers the nonprofit mission, Added benefits of associating with this project.

To protect themselves against legal complications, the sponsor may closely monitor the performance, activities, and operations of the project. In return for their service and investments in infrastructure, a fiscal sponsor will charge a fee for their administrative services.

By working with Heluna Health, your team can further its mission to improve the health and well-being of your community. There are plenty of resources and support services online that can help in your search, especially if you already have an idea of the type of fiscal sponsor you are looking for. Fiscal Sponsorship can end there, but at Community Initiatives we provide comprehensive back office services in support of projects for a flat fee. Newly founded projects have time to incubate without having to invest in infrastructure. Some fiscal sponsors take on an even larger role and perform administrative duties or capacity building functions. The fiscal sponsor may be fiscally and legally responsible for the decisions and actions of the project. Instead, the sponsor and the project retain a grantor-grantee relationship throughout the duration of the partnership.