What is Fiscal Sponsorship?
‘Fiscal sponsorship’ is a term known within philanthropic and nonprofit worlds describing a relationship between an established 501(c)(3) organization and a project that does not have that status, but whose activities align with the 501(c)(3)’s mission and vision.
Propel Nonprofits is a member of the National Network of Fiscal Sponsors and follows its best practice guidelines. 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 ‘test drive’ a new charitable concept before making a long-term investment? A project that is applying for 501(c)(3) status but wants to start your charitable work now? A collaboration looking for a neutral host or a time-defined project? Or an ongoing project who wants to stay lean and focus your energies on mission and program? Then fiscal sponsorship is a resource you can use to realize your charitable objectives.
Benefits to Sponsored Projects
We jokingly call [Propel Nonprofits] our “nonprofit fairy godmother,” but honestly, it’s not much of a joke.
Jamie Millard, Executive Director of Pollen
Fiscally sponsored projects can accept tax-deductible donations from individuals and grantmakers while focusing on program work and fundraising. We provide financial infrastructure, regulatory oversight, and grants and donor management. Shared administrative costs across multiple projects and discounts on training lead to overall cost savings and experienced Propel Nonprofits staff are always available for advice and encouragement.
Fiscal Sponsorship Criteria
- Located in Minnesota, North Dakota, South Dakota, Iowa or Wisconsin, although programming can occur outside of those states
- Will apply funds raised toward nonprofit purposes with a clear charitable mission
- Statement of Intent aligns with Propel Nonprofits mission, vision, and values
- Willing to incorporate or have an unincorporated association agreement and secure an EIN
- Has a plan to achieve financial viability and programmatic success
Projects engaged in the following activities are ineligible for sponsorship
- Designed primarily to benefit an individual or business (non-charitable)
- International activities involving financial transactions
- Raising funds through charitable gambling
- Mental health care, medical services, personal care, or childcare as a core service
- Those that require exceptional governmental oversight and licensing
Fiscal Sponsorship Fees
Application fee: A non-refundable fee of $100 is due at the time of application.
Setup Fees: Upon acceptance, a project pays a $500 one-time setup fee. The purpose of the set-up fee is to offset costs of the onboarding process.
Ongoing Fees: Our administrative fee is 7% of funds received by the project or 9% if the project is utilizing payroll. As part of this fund management fee, all projects receive monthly financial reports, grant and donor management, accounts receivable, and regulatory compliance. Depending on the model of service you use, you may also receive enhanced accounting services, including accounts payable and vendor 1099s.
If you have questions about the inquiry application, contact our Fiscal Sponsorship Associate.