What I'm learning about Fiscal Sponsorship for Nonprofits
I'm going to this workshop this afternoon at the Foundation Center about Fiscal Sponsorship. It seems like I have been spending the last couple of months thinking about Fiscal Sponsorship not only from the perspective of a nonprofit that provides Fiscal Sponsorship, but also looking at start-up nonprofits and what fiscal sponsorship means to them. Here's what I've learned so far.
First, I learned that fiscal sponsorship is not something that nonprofits should just jump into quickly. When I came into Aspiration, we had a fiscal sponsorship agreement in place, however after working with my Attorney and reading the book, "Fiscal Sponsorship--6 Ways to Do It Right" by Gregory Colvin. I realized that we needed to have a stronger agreement with the new organizations we were sponsoring. We are what the book defines as Model C--"A Preapproved Grant Relationship" with the new organizations we sponsor. It took us a while to get all this figured out and we are still working to do this the right way.
Second, I learned that it would be helpful if new organizations who are looking for a fiscal sponsor do a little research before they jump into a fiscal sponsorship relationship. This really helps during the contract negotiation. Since the IRS is really particular about how fiscal sponsor relationships are set up there are a lot of rules about ownership of funds, for example in most cases the new organization doesn't have any control over the money that the donors give to the fiscal sponsor. So, it is challenging when new organizations add clauses in the contract to try to control their funds. It would be helpful if new organizations not only learn about the benefits of being fiscally sponsored but also the limitations to being fiscally sponsored.
Last, I'd really like to be able to direct people to where they can find a fiscal sponsor. Since I have learned more about fiscal sponsorship, I have come into contact with many organizations who are looking for fiscal sponsor and don't know where to find one. It would be nice if there was a comprehensive list of nonprofits that provide fiscal sponsorship.