Updated: Sep 19, 2019
Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack exempt status. This alternative to starting your own nonprofit allows you to seek grants and solicit tax-deductible donations under your sponsor's exempt status.
When I provide our grants writing workshop I make sure to explain what fiscal sponsorship is, do you need one and how to obtain one. On Grantspace.org you'll find a lot of guidance on fiscal sponsorship. In layman terms, because most creative arts grants are awarded to individuals and organizations doing non-profit work, most grant applications will request that if you do not hold a 501 c (3) certificate then you are eligible to apply using a fiscal sponsor.
Before we obtained our certification we used Fractured Atlas as our fiscal sponsor, we signed up for their monthly membership which ranges between $10-$20 and when we applied for a grant we sent them the completed application weeks before submission for their approval. As a fiscal sponsor Fractured Atlas required the application in its entirety to confirm that the work being proposed aligned with their guidelines. Upon review and approval they provide a letter of support stating that they will become fiscally responsible for our project. This letter was then uploaded onto the grant application upon submission.
What does fiscally sponsored mean? It means that the tax-exempt organization loaning you their non-profit status will become responsible for the funds if and when awarded. To take it further you will need to request these funds from your fiscal sponsor.
Fiscal sponsorship is the term used to describe the relationship between an individual or group of individuals who have initiated a charitable project (the Project) and an existing tax-exempt organization that has agreed to support the Project (the Sponsor). Typically, the Sponsor confers upon the Project the benefit of the Sponsor's tax-exempt status and certain administrative services. However, the precise nature of the relationship, the support provided by the Sponsor, and the rights of the Project's initiators (the Project Initiators) may vary widely depending on the agreement between the parties. A well-drafted fiscal sponsorship agreement is therefore imperative. -American Bar Association
Where do I find a fiscal Sponsor?
I always suggest to folks that if you already have a relationship with a non profit and then you should consider asking them to fiscally sponsor you. Now sometimes we love certain organizations but we have no idea how they are ran administratively, and this can affect you greatly. Imagine trusting someone with your money and finding out they want you to jump through hoops to get or just simply never wants to give it to you. Crazy right? In this case you have a few options:
Fiscal Sponsor Directory: allows you to search by state, service category, or keyword for nonprofit fiscal sponsors. Profiles include eligibility requirements, fees, services, and types of projects supported. The site also provides statistics and resources on fiscal sponsorship.
New York Foundation of the Arts: Open to all artists with a U.S. Tax Identification Number (TIN). Applications are accepted for Artist Projects or Emerging Organizations with a minimum budget of $15,000 (this money does not need to be committed before applying). Projects must be arts-related, have a public benefit, and not be commercial in nature. Emerging Organizations must be incorporated, or in the process of incorporating, as a nonprofit at the state level.
The organizations listed above provide a lot more than just fiscal sponsorship, visit their website and navigate you might find their other services very useful.
Questions: email email@example.com, we might be interested in fiscally sponsoring your project.