An arrangement in which an established nonprofit extends its tax-exempt status to a project that lacks its own.
Fiscal sponsorship is a formal arrangement in which an existing tax-exempt organization (the fiscal sponsor) provides its legal and tax-exempt status to a project, group, or emerging organization that does not have its own 501(c)(3) status.
Under this arrangement, donations to the sponsored project flow through the sponsor, which accepts the funds, ensures they are used for charitable purposes, and typically charges an administrative fee. This lets new initiatives begin raising tax-deductible donations and applying for grants without first building their own legal entity.
Fiscal sponsorship comes in several models with different levels of control and liability, and the legal and tax implications can be significant, so both sponsors and projects should work from a written agreement reviewed by qualified counsel.
See it in Kindly
A common federal tax-exempt status for U.S. charitable organizations, named for the section of the tax code.
Funding awarded to a nonprofit by a foundation, government, or corporation for a specific purpose.
The annual information return most tax-exempt organizations file with the IRS to report finances and operations.
Donations that a donor has designated for a specific purpose or program rather than general use.
Manage donors, volunteers, members, and events together in one nonprofit platform, for one predictable subscription with no cut taken from donations.
