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Fiscal sponsorship

Fiscal sponsorship is a fee-based agreement where a 501(c)(3) not for profit organization sponsors a project created by an individual or by another organization that usually haven’t a tax-exempt status. The fiscal sponsor or agent shares its tax-exempt status with the sponsored organization or individual; as a consequence, they may seek grants and solicit tax-deductible donations under their sponsor’s exempt status.

As a general rule, a sponsor-seeking organization should look for a not for profit organization that has a similar or consistent mission, likewise an individual who wants develop a community or an artistic project. The fiscal sponsorship applicant should consider that there are some organizations whose missions are to serve as fiscal sponsors or incubators for some specific programs.

Any organization that is tax exempt under Section 501(c )(3) may be a fiscal sponsor that undertakes legal and financial responsibility for the project of the sponsored organization or individual. In fact, the fiscal sponsor manages all funds, assets and other resources under its direct control with the highest degree of responsibility, integrity, transparency and accountability.

Consequently, the sponsored subject will pay to its sponsor some fees that vary from organization to organization: usually they correspond to 6% of the contribution but, in some cases, they may equal 10% of the contribution.

http://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdf

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