Why pursue Fiscal Sponsorship?
Sometimes startup organizations may not have the time or infrastructure needed for complying with the administrative and legal requirements of being a 501(c)(3) public charity, and would benefit from the support of another organization. Fiscal Sponsorship may be a good option in these cases, as Fiscal Sponsors are able to provide oversight or administrative assistance for different projects or startup organizations. Additionally, certain international organizations may be interested in working with a Fiscal Sponsor in the US if they are interested in pursuing expanded funding in the US. If you are interested in pursuing Fiscal Sponsorship, reach out to an organization whose mission is compatible with your project, and discuss with them your desire to seek Fiscal Sponsorship.
We recommend you read more to develop a basic understanding of Fiscal Sponsorship, and consult with your legal counsel.
Any grant made to a Fiscal Sponsor will not be earmarked for a third-party grantee because a Fiscal Sponsor must retain full discretion over the use of the funds and implementation of the project.
What are the obligations of a Fiscal Sponsor?
Fiscal Sponsors cannot serve as pass-throughs or conduits for earmarking funds for a third party. Such an arrangement would be termed “Fiscal Agency.” Fiscal Sponsors must retain full discretion and responsibility over the use of the funds and provide oversight for the project. The Fiscal Sponsor may choose to work with another organization in order to implement the project. However, the Fiscal Sponsor is ultimately responsible for making sure that the project is carried, and may redirect funds to another organization if the sponsored organization is not able to complete the project.
What does a Fiscal Sponsorship agreement contain?
The Fiscal Sponsor and the sponsored organization typically have a mutual, written agreement detailing the responsibilities and expectations of both parties. Learn more about what a typical agreement includes.