Fiscal Sponsorship

Many individuals and organizations that are in their initial phases don't have the understanding or the tax exempt status needed to obtain the necessary funds to carry out their visions. Specifically, without tax exemption, many great ideas are unable to gain the support needed from donors and grant making institutions desiring to make philanthropic expenditures that are tax deductible. Under this program, we will provide the necessary support and guidance to a variety of individuals, organizations and initiatives conducting exempt activities through fiscal sponsorship.

Fiscal Sponsorship - An Alternative To Creating A Nonprofit

Fiscal sponsorship is an agreement between an established 501(c)3 charity and a group who might be a new organization that is not incorporated and lacks their own tax exempt status but is interested in soliciting donations from others as well as seeking grants from foundations. Under this agreement arrangement a tax-deductible contribution can be given using the sponsoring agent's exempt status. The fiscal agent for an organization then agrees to accept and be responsible for monies on your behalf.

One such organization interested in forming a sponsorship relationship with nonprofits is the Edward Charles Foundation for Nonprofits. To receive additional information concerning fiscal sponsorship opportunities click here.

Under the law the sponsoring agent and the new start up nonprofit are considered one legal entity and likewise both can be held responsible for each others actions.

To learn more you may want to visit fiscalsponsordirectory.org a website created by the San Francisco Study Center to be used as a tool to help connect community projects with fiscal sponsors; it is also a forum for fostering understanding of that relationship and its impact on the nonprofit sector.

The following is a video presentation given by Rachel Epps Spears, Executive Director, Pro Bono Partnership of Atlanta in Atlanta, GA on July 22, 2009 titled: What You Need to Know About Fiscal Sponsorships. This presentation shares the pros and cons of having a fiscal sponsor and what organizations can do to avoid potential problems when entering into a fiscal sponsorship agreement.

We would also recommend you taking the time to review the Foundation Center's website: What is fiscal sponsorship? How do I find a fiscal sponsor?

Tutorials - Guide to Fiscal Sponsorship and Affiliation http://foundationcenter.org/getstarted/tutorials/fiscal/index.html

The following below are samples of fiscal sponsorship agreements provided by Adler & Colvin a group of attorneys that specialize in the nonprofit law and nonprofit organizations. Also, it is worth noting that Gregory L. Colvin a partner with this firm authored a book titled: Fiscal Sponsorship:6 Ways to Do it Right.

Fiscal Sponsorship Agreement (Model A)

Fiscal Sponsorship Grant Agreement (Model C), short form

Fiscal Sponsorship (Model C) Letter to Funders

Fiscal Sponsorship (Model C) Letter to Vendors

Request for Technical Advice (IRS Lobbying Exception)

The following is a list of frequently asked questions that was found on CompassPoint the Nonprofit Genie on the topic of fiscal sponsorship. These questions and answers were provided on January 2006 by David Barlow:

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DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.