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Fiscal sponsor
A fiscal sponsor is a 501(c)(3) nonprofit organization that provides financial and administrative support to nonprofits or charitable programs.[1]
Partnership structure
Fiscal sponsors are registered 501(c)(3) nonprofit organizations. These entities partner with other nonprofits, fledgling projects or organizations that have lost their nonprofit status in order to provide financial and administrative support.[1] Fiscal sponsors may operate solely as sponsorship organizations or may provide sponsorship services in addition to independent nonprofit programming.[2]
A fiscal sponsor partnership allows new projects that do not have 501(c)(3) status to receive tax-exempt donations. The fiscal sponsor processes grants and financial donations, often for a small administrative fee, and forwards the funds to the project. This partnership allows growing programs to accept tax-deductible donations that they would otherwise not be able to collect. New projects may also choose to remain under the umbrella of a fiscal sponsor in perpetuity rather than obtain their own tax-exempt status.[1]
Though many start-up projects that partner with a fiscal sponsor are working toward nonprofit status, established nonprofits may also choose fiscal sponsorship. Many nonprofits find that working with a fiscal sponsor allows them to outsource administrative and fundraising tasks and allow them to focus on program implementation. [1]
Similar to traditional nonprofits, fiscal sponsors may choose to restrict their services to specific causes.[2]
See also
External links
- Fiscal Sponsor Directory
- National Network of Fiscal Sponsors
- Section 501 of the IRS code
- IRS Overview of Public Charities and the IRS
- IRS Overview of Private Foundations and the IRS
Footnotes
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