What is Fiscal Sponsorship?
Fiscal sponsorship is a common means by which an organization can accept tax-deductible donations without having its own 501(c)(3) tax-exempt status. It can be a great short- or long-term alternative structure while you are considering or preparing to launch as a 501(c)(3).
Fiscal sponsorship describes a relationship between an established 501(c)(3) organization (the sponsor) and a project without 501(c)(3) status whose charitable purpose aligns with the sponsor’s mission and vision. Typically, a group has come together with an idea for a project or program that will positively impact the community and they are ready to start testing it out. If the project wants to receive tax-deductible donations from grantmakers or individuals, under fiscal sponsorship they can solicit these tax-deductible donations to be given to the sponsor for the project’s purposes.
Propel exclusively offers a “Model C” type of fiscal sponsorship. In this model, sponsored projects are a separate legal entity from Propel. The project runs its own programs and operations, and can solicit grants and other tax-deductible donations to be given to Propel for the charitable purpose of the project. Propel then “re-grants” those funds to the project to be used toward meeting your mission.
Credit: Adler & Colvin, https://fiscalsponsorship.com/the-models-summary/
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Benefits to Projects Sponsored by Propel
There can be many barriers to launching a new nonprofit. We know it isn’t always easy. Propel is here to walk along the path to becoming a nonprofit with you.
Our dedicated fiscal sponsorship program supports infrastructure building through consulting and resources so that emerging organizations are ready to launch independently. We are your strategy sounding board and can provide startup guidance and insights, organizational development consulting, a platform for raising donations, feedback on grant applications, financial systems and board governance templates and trainings, and a bridge to helpful relationships.
To learn more about our clients’ experiences with fiscal sponsorship, see our Fiscal Sponsorship Case Study report.
When Should I Consider Fiscal Sponsorship?
Are you an individual or group wanting to establish a strong foundation before making a long-term investment and starting a 501(c)(3)? Have you applied for your 501(c)(3) status but want to start raising funds for your cause now? Are you a collaboration looking for a neutral host? A time-defined project? Then fiscal sponsorship might be the perfect fit as you realize your charitable objectives.
Propel Nonprofits is a member of the National Network of Fiscal Sponsors and follows its best practice guidelines.