Fiscal Sponsorship: What is it & How Does it Help?

A fiscal sponsorship is an arrangement in which a 501(c)(3) nonprofit organization provides financial and legal oversight to projects and groups doing work related to the sponsoring nonprofit's mission.
Some key things to know about fiscal sponsorships for nonprofits:
Allows new projects/groups to operate under an existing nonprofit's legal and tax-exempt status. This avoids the need to incorporate separately and apply for 501(c)(3) status.
The fiscal sponsor handles all legal compliance, manages funds, and provides oversight on spending and activities.
The sponsored project/group can receive grants and tax-deductible donations through the fiscal sponsor. Donors write checks to the fiscal sponsor and earmark funds for the specific project.
The fiscal sponsor typically charges an admin fee to the sponsored group (5-15% of funds managed) for providing oversight and management.
Allows new projects to get up and running quickly while building a track record needed to eventually spin off into their own standalone nonprofit if desired.
Provides credibility to funders since an established nonprofit is providing oversight versus a new standalone organization.
Common for arts/culture, advocacy, health/science projects wanting nonprofit status faster and with less startup costs.
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[@Naampetra]

Hi! I really appreciate the thoughtful and detailed video. I launched a nonprofit in 2020 with fellow film students, it’s taking us four years just to get everything running and prove that we serve our mission in order to receive funding. It’s really amazing to now have the ability to fiscal sponsor student projects that might not be sponsored by a bigger nonprofit. It is a lot of paperwork and a full-time job. But I highly recommend if someone is on the fence, and start small. Meanwhile, you can seek out the fiscal sponsorship and learn the process through that so when your nonprofit is ready, you won’t be scratching your head and begging for advice.
Thank you again for the awesome video. I’m so excited to help students in support of their projects and share the knowledge of creative funding for those who are truly starting from nothing.

[@Wholewhale]

Sounds like a great way to help others focus on the impact work rather than the paper work

[@peaceromano4438]

Thank you , this is great information.

[@Wholewhale]

Glad it was helpful! I think fiscal sponsorships could save people a lot of work...