Fiscal Sponsors & Resources
NGO Start-up Tools are you interested in starting a non-profit organization and don’t know where to begin? Here is a great resource provided by the team at Candid.org, which provides valuable insight on all the various elements involved in getting your non-profit off the ground.
Community First Responder Training we support communities taking the initiative to protect and empower their neighbourhoods. Anti-police-terror project, a charity with a mission to end police brutality, has designed a training program to support groups interested in starting a community first responder training program.
One of the advantages of setting up a non-profit organisation under the 501(c)(3) tax exempt status, is that it allows donors to receive tax deductions for their donations. However, if you have a project idea and you either are not prepared to establish an organization or have not completed your registration process, you can partner with a charitable organization with an aligned vision to fiscally “sponsor” your project, by managing grant funding, and providing administrative and oversight functions on you or your organisations behalf.
Forms of Fiscal Sponsorship
According to Gregory L. Colvin, Fiscal Sponsorship: 6 Ways To Do It Right, there are various models broken down in the following way:
Model A. This is also called “Comprehensive” or “direct” fiscal sponsorship in which the sponsor becomes the “owner” of the project and undertakes full responsibility and authority to runs the project, while the org or individual presenting the project becomes an employee of the sponsor.
Model C. In this model, also called “indirect” fiscal sponsorship, the sponsor becomes a grantee of the sponsor. In this model, the sponsor receives donations for the project’s purposes, however, must retain discretion and control over the funds, grants them for project purposes, and requires reports to confirm that funds were spent properly.
Model F. With this model, also referred to as “technical assistance”, the sponsor's duties are administrative in nature, where the sponsor’s ability to receive deductible contributions isn’t necessary. In order words, the sponsor lacks any discretion or control over the spending of funds. Under this model, for instance, a nonprofit sponsor could keep track of a bank account belonging to a 501(c)(3) charity recognized by the IRS, makes payments on instruction of the charity, and handle back office work.
Models D and E. These two models, though sometimes called “fiscal sponsorship,” also have a separate legal definition. These are group exemptions and supporting organizations and are generally entities who do not see themselves as fiscal sponsors. In both models, the tax status of one entity depends on another’s. Though they are similar to Models A and C in that deductibility depends on tax status of the sponsor, the administration that is a part of Models A, C, and F is unnecessary to group exemptions or supporting organizations.
For more information about the various models or forms of fiscal sponsorship, it is advisable to discuss with potential fiscal sponsors or an attorney with experience in the field to determine which form of sponsorship is best suited for your project or organization.