Fiscal sponsorship is a practice that has evolved as an effective and efficient means of starting new charitable initiatives, delivering public services, and seeding social movements. Fiscal sponsors are nonprofits that enable the movement of resources from funders and donors to projects, activities, ideas, and organizations that share the fiscal sponsor’s mission.
One way to find a fiscal sponsor is through your current affiliations, such as theaters, libraries, community organizations, or professional societies that are familiar with your work. In addition, several websites have information on finding a fiscal sponsor, along with examples of policies, procedures, and guidelines for fiscal sponsorship agreements. Here are some reccomended resources:
- Guide to Fiscal Sponsorship from the Foundation Center
- Fiscal Sponsorship Resources from the Tides Center
- Guide to Fiscal Sponsorship from Community Technical Assistance Center (CTAC)
- Fiscalsponsordirectory.org is a tool created by the San Francisco Study Center 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.
- Finally, below are tips for finding Fiscal Sponsorship from Kim Klein of Grassroots Fundraising:
I belong to a small “Women in Black” group that has been considering doing minimal fundraising for our organization for banners and signs, buttons, fliers, etc. for use at our vigils. We are all volunteer, we have no office and we use a PO Box. We are truly “grassroots.” Is there a way that we could find an organization that would be our “sponsor” so that we could do this kind of minimal fundraising without becoming a “non-profit corporation” ourselves? Are we too political for anyone to take us on?
~Seeking small money and smaller hassle
The relationship you are looking for is called “fiscal sponsorship” and it should be relatively easy to find someone to do that for you. The fiscal sponsor handles donations and assumes fiduciary responsibility for you. They charge a fee, usually a percentage of the money you raise, for doing that work. Donors make their checks out to the name of the fiscal sponsor, which sometimes confuses people, but that is a minor problem. I don’t think you should have trouble finding a fiscal sponsor because Women in Black, if memory serves, does not engage in electoral politics, and mostly uses the witness of a silent vigil to do your important peacemaking work. To find a fiscal sponsor, you should contact your local community foundation or Volunteer Center. If you have a number of peace and justice groups in your area, ask them for leads to fiscal sponsors. Here in California, we are blessed to have the Agape Foundation which sponsors small peace groups, and probably is aware of other similar organizations in the rest of the United States. (www.agapefn.org)
I don’t know all the reasons you want access to nonprofit status, but if it is so that you can allow donors to get a tax deduction for their donations to your organization, you may want to consider this: 70% of Americans file a short form and do not receive any tax benefits for their charitable giving. You could also set up a checking account as a “DBA” (Doing Business As) and not have formal tax status at all. Someone in your organization will need to provide the bank with her social security number and that person will be responsible for managing the finances and keeping track of income and expenses. You may need to file some forms with the city where you live, following the same laws as a small business. However, if you are simply raising small amounts of money, mostly in cash, from a broad cross section of donors, most of whom are not going to use their gift to you as a tax deduction, even having a fiscal sponsor may be more trouble than it’s worth. If you go this latter route, I would seek the advice of a small business accountant or even someone at your bank about how best to do it. I definitely do not recommend seeking your own nonprofit status.