white paper on comprehensive fiscal sponsorship
TRANSCRIPT
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7/29/2019 White Paper on Comprehensive Fiscal Sponsorship
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By Joshua Sattely, Esq.
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2
The purpose o this paper is to provide readers
with a thorough understanding o the emerging feld
o Comprehensive Fiscal Sponsorship (CFS).
It is intended or use by:
Individualsandgroupsconsideringusingascal
sponsor to acilitate their mission-related work
Organizationsconsideringoeringscal
sponsorship services
Nonprot,foundationandlegalpractitionerswho
wish to inorm themselves about this topic
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table o f Contents
Executive Summary 2
I. Introduction 5
II. Mission Alignment 6
III. Te Memorandum o Understanding and Advisory Boards 7
IV. Ease o Entry 8
V. Ongoing Compliance 9
VI. Nurturing Support 10
VII. Addressing Misconceptions 12
A. Donor Advised Fund vs. Fiscal Sponsorship 12
B. Comprehensive Fiscal Sponsorship for the 501(c)(3) 13
C. Incubator Only? 16
VIII. Intangible Benets o Comprehensive Fiscal Sponsorship 16
IX. Ease o Exit 18
X. Conclusion 19
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exeCutive summary
Tis white paper examines the contours and constructs o Comprehensive Fiscal
Sponsorship (CFS), a sub-practice o the broader field o fiscal sponsorship. ypically
fiscal sponsorship describes a relationship in which an unincorporated group wishing
to conduct charitable activities afiliates with an existing 501(c)(3) nonprofit with a
compatible mission. With Comprehensive Fiscal Sponsorship, the parent organiza-tion, in accepting the group as one o its programs, provides legal and financial
oversight as well as accounting, human resources and other back-ofice support.
Fiscal sponsorship has been practiced in varying degrees since at least 1959 when the
Massachusetts Health Research Institute, now Tird Sector New England (SNE),
incorporated and began sponsoring research and community-based public health
activities. In 2004, a group o fiscal sponsors rom around the country created the
National Network o Fiscal Sponsors (NNFS) to share and promote eective,
responsible practices in the field.
Fiscal sponsors receive grants and other tax deductible contributions that are allo-
cated in support o project activities. Such payments are usually disbursed in theorm o payments to project sta, vendors, contractors and grantees.
Fiscal sponsors provide this support only to groups whose activities urther the
sponsors mission and tax-exempt purpose. Te level o engagement between sponsor
and project varies, but at a minimum all fiscal sponsors:
Retaincontrolanddiscretionastotheuseofthefunds
Maintainrecordsestablishingthatthefundswereusedforsection
501(c)(3) purposes
Limitdistributionstospecificprojectsthatareinfurtheranceoftheirown
exempt purposes.
A Uni qU e An d Vi tAl Ro le
Comprehensive fiscal sponsorship contemplates a more integral, connected role
or the sponsor than other models. Te nature o CFS means that sponsors must
exercise great care in screening potential new projects. When, ater careul consider-
ation, a fiscal sponsor accepts a new project, the project becomes a program o the
sponsor, part o the same legal entity. Te sponsor, thereore, has a vested interest in
its success. Because o the total assumption o legal and nancial liability, such
relationships should not be equated with so-called scal agency, conduit or
pass-through arrangements. In act, a CFS relationship is the converse o an agency
arrangement, in which a principal is in control and directs an agent to carry outactivities on its behal. In CFS, the sponsor and the project are both part o the same
legal entity, governed by the sponsors board o directors.
CFS urnishes projects with comprehensive personnel policies, liability insurance,
financial and administrative expertise, and keeps projects abreast o and trained on
new government regulations as they arise. Having these reliable operational mecha-
nisms in place aords project leaders peace o mind, eliminating many o the stresses
that can derail an operation.
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impRoVing pRogRAms
Te intangible benet o CFS to projects and their leaders is critical. A leaders time
and attention will not be sidetracked by the plethora o issues inherent in managing
back ofice operations. Project sta work towards mission ulfillment knowing that all
administrative and compliance issues are being eficiently addressed. CFS keeps the
engines o their projects humming, allowing passionate, mission-driven project leaders
and sta to ocus on the activities that are core to the projects existence.
Even large projects may find that the quality service and support oered by CFS are
advantageous and cost eective. Te large size and unified inrastructure o most
CFS organizations create economies o scale otherwise unavailable to stand-alone
smaller entities, maximizing administrative eficiencies while minimizing the costs o
back ofice support and overhead. Tis is one reason why existing 501(c)(3)
nonprofits are increasingly seeking out established comprehensive sponsors as
long-term solutions to meet their needs o lower costs and increased proficiency.
Despite the growth and widespread acceptance o fiscal sponsorship, certain miscon-
ceptions linger. One concern voiced occasionally by oundations is that fiscal sponsors
are actually sponsoring organizations that manage donor advised unds. However, itis clear rom a careul analysis that, with rare exceptions, these two constructs are not
at all similar. Te three-pronged denition o donor-advised unds contained in the
Internal Revenue Code is dierent in key respects rom the practice o scal spon-
sorship. Such misconceptions are ully addressed in this White Paper.
Oten an aterthought, ease o exit is a significant advantage o CFS. When a
stand-alone nonprofit organization winds up its operations, it must do so in compli-
ance with time-consuming and oten complex IRS and state requirements. When a
CFS project terminates its operations, all assets previously maintained by the project
willsimplybespentoutonmission-relatedpurposes.Likewise,ifaprojectremains
viable but wishes to become independent or find a new sponsor, a well-drated fiscalsponsorship agreement should provide that all project specific assets and liabilities be
transerred to the new entity upon termination o the agreement.
Sponsorship with a reputable CFS practitioner conveys several messages to ounda-
tions, other unders and the public. It says: (1) this project has been through a
thorough evaluation process that determined it has the capacity to achieve its
underlying objectives; (2) all back-ofice operations o the project are managed by
competent, experienced proessionals ensuring maximum transparency; (3) project
sta receive proper compensation and good benefits, increasing retention and
minimizing burnout; and (4) the project will be able to ocus on the mission and
not be distracted by administrative burdens and complex compliance issues.
Whether oundation, charitable initiative or fiscal sponsor, due diligence coupled
with an open mind to creative solutions like comprehensive fiscal sponsorship can
contribute substantially to advancing the purposes or which the social sector exists.
CFS stretches charitable dollars urther and more eectively than most stand-alone
small to midsized and even many large nonprofits could ever on their own. CFS also
oers a realistic, honest approach to not only survive, but excel in the challenges o
our day and those that lie ahead.
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The term fiscal
sponsorship actually
reers to several diferent,
oten overlapping
arrangements. Fiscal
sponsors receive tax
deductible contributions
that are then allocated in
support o projects.
1 r. rul. 68-489, 1968-2 C.B. 210
2 Chronology o Fiscal Sponsorship, T Fcal soo
Dctoy at tt://www.caloodctoy.og/
coology.
3 Brie History, Td scto nw eglad at
tt://www.t.og/about/o
4 natoal ntwok o Fcal soo at
tt://www.td.og/couty/twok-at/
/
what is fisCal sp onsorship?
Te term fiscal sponsorship actually reers to several dierent, oten overlapping
arrangements. Te common denominator is generally that a group wishing to
conduct a charitable program without incorporating or obtaining Internal Revenue
Service (IRS) recognition finds an existing 501(c)(3) nonprofit to serve as its fiscal
sponsor. Many groups, though charitable in nature, lack the legal status they needto receive grants rom oundations, individual donors and government agencies. In
recent years, existing tax exempt charities have also turned to comprehensive
sponsors, realizing benefits that extend beyond tax-exempt status such as enhanced
back ofice eficiencies, cost savings and other value inherent in comprehensive
fiscal sponsorship.
Fiscal sponsors receive tax deductible contributions that are then allocated in
support o projects. Such unds are usually disbursed in the orm o payments to
project sta, vendors, contractors and grantees.
A fiscal sponsor is able to oer this support only to groups whose activities urther
the sponsors mission and tax-exempt purpose. Te level o engagement betweensponsor and project varies greatly, but at a minimum all fiscal sponsors must:
Retaincontrolanddiscretionastotheuseofthefunds
Maintainrecordsestablishingthatthefundswereusedforsection501(c)(3)
purposes
Limitdistributionstospecificprojectsthatareinfurtheranceoftheirown
exempt purposes.1
501(c)(3) organizations acting as fiscal sponsors that ail to conorm to these
requirements jeopardize their own exempt status.
Fiscal sponsorship has been practiced in varying degrees since at least 1959 whenthe Massachusetts Health Research Institute, now Tird Sector New England
(SNE), incorporated and began sponsoring community-based public health
projects and research laboratories.2 SNE has since expanded and now oers
Comprehensive Fiscal Sponsorship (CFS) to groups o people involved in many
types o civic engagement activities in their communities.3 Over the years, SNE,
along with other like-minded organizations throughout the country, independently
developed a unique brand o fiscal sponsorship known as CFS.
In 2004 these groups came together and created the National Network o Fiscal
Sponsors (National Network) to share and promote eective, responsible practices
in the field as well as gain a deeper understanding o the current practice o fiscal
sponsorship around the country. Founders o the National Network includedCommunity Partners, Colorado Nonprot Development Center, Earth Island
Institute, PHFE Management Solutions, CIF o the San Francisco Foundation
(now Community Initiatives), SNE, and ides Center.4
http://www.fiscalsponsordirectory.org/chronology.phphttp://www.fiscalsponsordirectory.org/chronology.phphttp://www.tides.org/community/networks-partners/nnfshttp://www.tides.org/community/networks-partners/nnfshttp://www.tides.org/community/networks-partners/nnfshttp://www.fiscalsponsordirectory.org/chronology.php -
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A core tenet and legal
requirement o any fiscal
sponsorship relationship is
that the purposes o a
potential project must be
consistent with the
sponsors own mission.
5 Col, Ggoy. Fiscal Sponsorship; 6 Ways To Do It Right,
study Ct p, 2005.
6 See r. rul. 68-489, 1968-2 C.B. 210
Most members o the Network practice a type o fiscal sponsorship commonly
reerred to as Model A sponsorship. Under a Model A relationship, the project
becomes a part o the sponsor; the sponsor takes the project in-house. Te project
has no separate legal existence.5 All employees o the project become employees
o the sponsor. Te sponsors payroll tax withholding, workers compensation
insurance, unemployment benefits, and health and retirement plans oered all are
applied to the project sta in the same manner as the organizations otheremployees. Te sponsor will be liable or the actions o project employees within
the scope o their employment as well as any other liabilities the project accrues.
Additionally, all tax reporting is done by the sponsoring organization.
Although the Model A direct project is the most commonly practiced orm o
fiscal sponsorship, other maniestations occur throughout the charitable commu-
nity and their use as legitimate, creative models should not be discounted. Gregory
Colvins Fiscal Sponsorship; Six Ways To Do It Rightprovides the most thorough
treatment o the various incarnations o fiscal sponsorship to date.
CFS can best be characterized as a subset o fiscal sponsorship, typically patterned
ater the Model A relationship, where the sponsor plays a deeper, more nurturingrole than contemplated by any other model. In addition to serving as the legal
employer o project employees, oering insurance, and seeing to state and ederal
compliance matters, sponsors provide a comprehensive suite o services designed to
enhance the capacity and eectiveness o projects. Most o these oerings all into
our broad categories: financial management, human resources management,
inormation systems support, and capacity building.
Comprehensive sponsors run the essential back ofice operations o their projects
in a highly competent, cost-eective manner, allowing agents o change to ocus
their passions and energies on activities central to project purposes. Tese sponsors
also engage the projects in a wide array o capacity building endeavors, andbeyond that, a host o intangible benefits begin to accrue the moment a project
finds a home with a credible comprehensive sponsor.
Te end result o CFS is that progressive movements are able to minimize
administrative burdens and maximize project impact and societys corresponding
return on investment. Below, the parameters o CFS are thoroughly explored.
mission alignment
A core tenet and legal requirement o any fiscal sponsorship relationship is that the
purposes o a potential project must be consistent with the sponsors own mission.6
Tis threshold requirement is the first standard articulated in Guidelines for
Comprehensive Fiscal Sponsorship (Guidelines), a must-read set o guidelines and
recommended best practices or any nonprofit organization contemplating a role
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Advisory boards are
responsible or providing
assistance in the areas
o project policy
development, undraising
and organizational
development.
7 Gudl 1. Guidelines or Comprehensive Fiscal
Sponsorship at tt://www.td.og/lad/u/
nnFs/nnFs-Fcal-soo-Gudl-o-Co-
.d
8 id.
9 Gudl 7, Guidelines, Id.
as comprehensive fiscal sponsor or or any group seeking a responsible sponsor. 7
Tese guidelines, created through the collaborative eort o the members o the
National Network, will be reerenced throughout this paper.
Beore a project can be taken under the supportive umbrella o a fiscal sponsor, it
should be careully scrutinized to establish that its goals and vision are both
compatible and consistent with the sponsors own mission.8
Tis initial step isnecessary because 501(c)(3) exempt organizations must operate in urtherance o a
specific charitable purpose ound in their organizing documents and orms filed
with the Internal Revenue Service (IRS).
Te activities o all nonprofits, not just those practicing fiscal sponsorship, must
operate in accordance with a stated tax-exempt purpose. I a projects mission is not
compatible with that o its sponsor, that sponsor is not serving its exempt status,
and its 501(c)(3) classification could be jeopardized. Although the vetting processes
used by organizations engaged in comprehensive fiscal sponsorship vary, all must be
thorough, ensuring mission compatibility. Review and approval o the project by
the fiscal sponsors board o directors is an essential step in the process.
the memorandum of unders tanding
and advisory boards
Te union between project and Model A sponsor is typically described in a memo-
randum o understanding between the fiscal sponsor and the unincorporated
organization.9 Tis agreement establishes the project as a legal part o the sponsor.
Te parameters o employment and project management, delegations o authority,
the use and roles o advisory boards, property rights, and the duration and terms o
project closure are typically addressed in this document.
Te fiscal sponsor must be cautious in selecting projects because it assumes totallegal responsibility or the project, and all current and uture project employees
become direct employees o the fiscal sponsor. Tis is a serious matter, as any
previous legal issue attached to a project is generally absorbed by the sponsor.
Likewise,thesponsorbecomesliableforallsubsequentlegalissuesthatarisein
connection with the project. Until this arrangement concludes, the project is not a
legally separate entity. Te sponsors assumption o liability is a necessary compo-
nent o a CFS relationship. All nonprofits practicing CFS have established sets o
criteria used to evaluate prospective projects. Tis total assumption o legal and
financial liability dierentiates fiscally-sponsored relationships rom so-called
conduit or pass-through arrangements, where control and responsibility remainwith other parties.
http://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdfhttp://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdfhttp://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdfhttp://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdfhttp://www.tides.org/fileadmin/user/NNFS/NNFS-Fiscal-Sponsorship-Guidelines-for-Comprehensive.pdf -
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Ease o entry into
community engagement
is a key benefit o fiscal
sponsorship.
10 Gudl 6, Guidelines, Id.
11 Liecycle o a Public Charityat tt://www..go/
cat/catabl/atcl/0,,d=122670,00.tl
Ater a project joins the fiscal sponsor, project and sponsor maintain regular contact
in order to properly manage all risks. CFS practitioners recommend and sometimes
require that projects establish advisory boards that unction similarly to a tradition-
al board o directors.10 Although these advisory boards have no legal or governing
authority, they provide an important mechanism o accountability and support or
many projects.
Advisory boards are responsible or providing assistance in the areas o project
policy development, undraising and organizational development. Tey also
monitor and evaluate the perormance o project directors and provide the fiscal
sponsor with advice and recommendations regarding personnel, financial and
administrative matters as well as other issues related to their projects.
Likewise,whenanexisting501(c)(3)nonprofittransitionsintoacomprehensive
sponsorship relationship, the organizations board o directors oten assumes the
role o project advisory board. Te activities o the new advisory board remain
substantially similar to those o the previous board except that fiduciary duties and
legal liability are now vested in the sponsors board o directors, which must
exercise final decision-making authority to ensure that the project is in compliancewith all state and ederal laws.
ease of entry
Ease o entry into community engagement is a key benefit o fiscal sponsorship.
Te prospect o obtaining 501(c)(3) status and orever-ater complying with
complex requirements can be daunting to many would-be social entrepreneurs.
Organizing under state law, attaining an employment identification number, and
filing the lengthy Form 1023 along with other required documents and accompa-
nying ees are the first steps an organization must take to become tax-exempt under
IRC 501(c)(3).11
Ater all necessary filings have taken place, it can take many months to hear back
rom the IRS, which may respond with ollow-up inquiries. Although the date o
exemption is usually retroactive to the filing date or the date the organization was
created, oundations and other donors are understandably hesitant to extend
monetary support to groups that have yet to receive an afirmative determination
rom the IRS. Tis arduous undertaking siphons time, money and energy rom a
project, oten leaving it dead in the water. Costly legal assistance is oten neces-
sary and always recommended.
Many projects, such as small grassroots movements, may lack the resources to even
begin this process. For others organized with a short-term charitable goal in mind,
the process o obtaining an afirmative determination letter rom the IRS may take
more time than its worth. Speed is o the essence or many important nonprofit
http://www.irs.gov/charities/charitable/article/0,,id=122670,00.htmlhttp://www.irs.gov/charities/charitable/article/0,,id=122670,00.htmlhttp://www.irs.gov/charities/charitable/article/0,,id=122670,00.htmlhttp://www.irs.gov/charities/charitable/article/0,,id=122670,00.html -
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Comprehensive FiscalSponsorship organizations
also have annual financial
audits that serve to
maintain the highest
standards o accountabilit
and transparency.
12 Gudl 5, Guidelines Id.
13 See Ogog Colac ad rqud Flg o a
ublc caty at tt://www..go/cat/
catabl/atcl/0,,d=122670,00.tl
14 Gudl 4, Guidelines, Id.
15 T natoal Ct o Catabl stattc at
tt://cc.uba.og/tattc/quckact.c
endeavors.Largenonprofitorganizationsandtheirsetagendasareoftentooslowto
respond to urgent, emerging issues. For these time-sensitive movements, indepen-
dent 501(c)(3) status is not a viable option. For many groups unwilling to drain
limited resources engaging with the IRS, fiscal sponsorship represents an attractive
alternative.
Under a properly constructed CFS relationship, the unincorporated projectbecomes a program o the fiscal sponsor and will not be burdened with navigating
IRS red tape. As the project is now part o a larger nonprofit, its activities become
part o the sponsors exempt activities. Te project can immediately solicit and
receive unding in the fiscal sponsors name.
In ulfillment o their fiduciary duties, CFS nonprofits careully monitor project
und-raising eorts and will sign o on grant applications, RFPs, and legally
binding project commitments.12 Under the legal control o a CFS organization that
also runs all back ofice operations, projects are aorded a great deal o autonomy
in both crating and achieving their goals so long as the activities continue to
urther the exempt purpose o the sponsor. For groups that need tax-deductible
donations to achieve a charitable purpose, fiscal sponsorship is the most straightor-ward and time-tested alternative to obtaining an afirmative determination letter
rom the IRS.
ongoing ComplianCe
Once an organization has received an afirmative determination letter rom the
IRS, it must meet a host o annual and semi-annual filing requirements under state
and ederal law.13 Tis process is costly and time consuming, but ailure to comply
properly can result in oreiture o the organizations exempt status. Once again,
these organizations are requently orced to seek the assistance o costly legal
counsel. With CFS, all required inormational reporting occurs in a streamlined,
consistent, and transparent ashion on the sponsors Form 990.
Te IRS also gains rom the organized inrastructure comprehensive sponsors
provide. For instance, a fiscal sponsor with 100 projects files one Form 990. Tis
single 990, assembled by experienced proessionals, presents all required inorma-
tion or the 100 projects that make up the organization. Te IRS thus has to review
a single return rather than 100 shorter returns oten prepared by nonproessionals.
CFS organizations also have annual financial audits that serve to maintain the
highest standards o accountability and transparency.14 With over 1.4 million
nonprofits operating in the United States15, fiscal sponsors serve to ease the burden
on the IRS, making eficient use o the corresponding tax dollars spent on the
Services operations.
http://www.irs.gov/charities/charitable/article/0,,id=122670,00.htmlhttp://www.irs.gov/charities/charitable/article/0,,id=122670,00.htmlhttp://www.irs.gov/charities/charitable/article/0,,id=122670,00.html -
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The back-ofice support
structure inherent in
Comprehensive FiscalSponsorship creates fluidity
and continuity in project
operations.
nurturing support
Some commentators have likened scal sponsorship to a pass-through arrangement
where the sponsor is used as a vehicle to steer deductible contributions to improper
parties and individuals. Tis description does not stand up to scrutiny. Indeed,
even a cursory review demonstrates that CFS is best described as a capacity
nurturing relationship.
When, ater careul consideration, comprehensive sponsors adopt a project, they
are not merely extending a mission-consistent program their tax-exempt status in
exchange or a ee. Te unincorporated project is transormed into a program o
the scal sponsor. Te sponsor and the project are now one and the same. Te
sponsor has a vested interest in project success, because success or ailure is a
reection o the scal sponsors abilities.
By eectively nurturing thousands o projects, CFS nonprots such as Colorado
Nonprot Development Center, Community Partners, Earth Island Institute,
ides Center and Tird Sector New England have built up outstanding
reputations or growing capacity and ostering positive societal transormations.In order to ulll their missions and protect and enhance hard-earned brand equity,
a scal sponsor must take all necessary steps to maximize the potential o the
projects it serves.
When a comprehensive sponsor adopts a project, the project benets immediately
rom its interactions with the sponsors experienced sta and well-designed systems.
Te sponsor handles all aspects o nance, administration, human resources,
governance, compliance and risk management, enabling project teams to ocus all
their talents on project advancement.
Tis expertise relieves project leaders o the need to invest precious resources in
creating inrastructure. It also rees up signicant time leaders might otherwisespend hiring, training, monitoring and retaining the sta necessary to perorm
these critical administrative unctions. Many scal sponsors see their role as helping
to build the internal capacity o projects and project sta. In those relationships,
training and institutional knowledge transer is part o the service package.
Te back-ofce support structure inherent in CFS creates uidity and continuity in
project operations. With typical small to midsized stand-alone organizations, one
to several individuals provide all o the above unctions oten while being tasked
with other duties. I key sta members become unavailable even or a brie period
other members o the organization, though not always trained or qualied, must
ll this void.As sta attempt to perorm job unctions they are not trained to handle, while
scrambling to ulll their own duties, the mission inevitably suers. Te level o
in-depth, consistent support that comprehensive scal sponsors provide ensures sta-
bility and eliminates inefciencies, resulting in optimal usage o project unds and
talent. Tis, o course, maximizes the societal return on investment.
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Capacity building is
also emerging as key
component o
Comprehensive Fiscal
Sponsorship, adding
more value to the
projects served.
TesupportiveroleCFSorganizationsprovidecostsmoney.Likeallnonprotsand
or-prot programs, eective CFS requires that unds be allocated to cover admin-
istrative and back ofce expenses. Some CFS organizations direct a portion o a
projects unds towards administrative expenses when the unds are spent by the
project. Others make the allocation as unds are received. Either way, CFS oers
high quality services most oten at a cost lower than possible or small to-medium
independent nonprots.
Even large projects may nd that the quality service and support oered by CFS
are advantageous and cost eective. Much o these savings are achieved through
economies o scale. Te large size and unied inrastructure o most CFS
organizations create economies o scale otherwise unavailable to stand-alone smaller
entities. Tis maximizes administrative efciencies while minimizing the costs
attributable to back ofce support and overhead.
Largecomprehensivesponsorsareabletoutilizetheirsizeandcorresponding
bargaining power to secure better coverage at avorable prices on health insurance
coverage and other ringe benets. Te substantial benets scal sponsors provide
all employees make CFS projects enticing employment options, attracting well-qualied, passionate job applicants.
Capacity building is also emerging as a key component o CFS, adding more value
to the projects served. Some sponsors oer training seminars and webinars to
complement their back ofce support. Trough these oerings, projects are
schooled by nonprot leaders on diverse topics such as undraising, strategic
planning, inormation technology, and diversity and inclusion. Some sponsors
urther build capacity by providing projects with periodic assessments, crating
solutions to the myriad o issues nonprots commonly ace.
Surprisingly, terminology such as client and ee that does not accurately
reect the true legal structure o CFS relationships persists both within and
outside the scal sponsorship community. Such terms add ambiguity and uel
skepticism among those not amiliar with this brand o scal sponsorship.
Widespread adoption o consistent language by the scal sponsorship sector will
serve to eliminate conusion rom project sta and prospective unders. Accurate
terminology such as project rather than client and project administrative
expense instead o client ee is gaining currency as a clearer understanding o the
parameters o CFS evolves.
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Cash and in-kind
donations that support
specific projects are
requently solicited by
sponsored project staf.
16 s Col, eq., Is a Fiscal Sponsorship Account
Maintained or a Project by a Public Charity Also a Donor-
Advised Fund?at tt://www.caloo.co/
DAF%20dto%20o%20cal%20oo%20
_00211211_.d
17 irC 4966(d)(2) alo Donor-Advised Funds
Guidesheetat tt://www..go/ub/-tg/
doo_add_gud_t_073108.d
18 Donor Advised Funds Guide SheetExplanation at
tt://www..go/ub/-tg/doo_add_
xlaato_073108.d
addressing misConCeptions
donoR AdVised FUnd Vs. FiscAl sponsoRship
Despite the success and growth o scal sponsorship, certain misconceptions
surrounding the practice o CFS linger. One concern occasionally voiced by
oundations is that scal sponsors are actually sponsoring organizations that
manage donor advised unds. Te Pension Protection Act o 2006 created newrules and restrictions governing donor advised unds, putting oundations on
heightened alert.
However, a brie examination o how a sponsoring organization maintaining donor
advised unds is dened and how this denition diers rom CFS makes it appar-
ent that, with rare exceptions16, they are not the same or even remotely similar.
Prior to the Pension Protection Act, the term donor-advised und was not dened
in the Code or Regulations. IRC 4966(d)(2) now denes the term as (1) a und or
account owned and controlled by a sponsoring organization, (2) which is separately
identied by reerence to contributions o the donor or donors, and (3) where the
donor (or a person appointed or designated by the donor) has or reasonably expects
to have advisory privileges over the distribution or investments o the assets.
All three elements o the denition must be met in order or a und or account to
be treated as a donor-advised und.17 Te practice o CFS does not qualiy under
this denition.
Starting with the second prong, a distinct und or account o a sponsoring organi-
zation must reer to contributions o a donor or donors, such as by naming the
und ater a donor, or by treating a und on the books o the sponsoring organiza-
tion as attributable to unds contributed by a specic donor or donors.18
Nonprots practicing CFS do not maintain accounts that identiy donors byreerence. Rather, unds donated to specic projects are typically held in accounts
reerencing the projects name or purpose such as Immigrant Support Services or
Save the Right Whales. No reerence is made to the actual donor, as that indi-
vidual or entity is irrelevant or purposes o administering project unds. Once a
donation is made, all control over those unds previously exercised by the donor
ceases.
Cash and in-kind donations that support specic projects are requently solicited
by sponsored project sta. In this respect, a donor can reasonably expect that the
contribution will go toward that particular project o the scal sponsor. However,
once the donation is made, the donor has no actual or implied inuence on the
scal sponsors use o the unds.
http://www.fiscalsponsorship.com/DAF%20definition%20for%20fiscal%20sponsor%20_00211211_.pdfhttp://www.fiscalsponsorship.com/DAF%20definition%20for%20fiscal%20sponsor%20_00211211_.pdfhttp://www.fiscalsponsorship.com/DAF%20definition%20for%20fiscal%20sponsor%20_00211211_.pdfhttp://www.fiscalsponsorship.com/DAF%20definition%20for%20fiscal%20sponsor%20_00211211_.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_guide_sheet_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_guide_sheet_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_guide_sheet_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_explanation_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_explanation_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_explanation_073108.pdfhttp://www.irs.gov/pub/irs-tege/donor_advised_guide_sheet_073108.pdfhttp://www.fiscalsponsorship.com/DAF%20definition%20for%20fiscal%20sponsor%20_00211211_.pdf -
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19 natoal Gogac socty, Doato FAQ ag at
tt://www.atoalgogac.co/doat/
quto.tl#cy
20 Id.
21 natoal Gogac maaalad egcy Fud
Doato ag at tt://doat.atoalgogac.
og/ssLpag.ax?d=608&cd=608
22 suot pBs at tt://www.b.og/aboutb/
aboutb_uot.tl
Allowing oundations and the general public to contribute to specic projects o
Model A sponsors is identical to the practices that large nonprots operating
multiple programs have successully engaged in or decades. For example, when a
donation is made to the National Geographic Society, donors can designate their
gits to one or more o the ve major areas o the National Geographic Societys
Mission Programs: education, research and exploration, conservation, cultures and
public outreach.19
Also oered are additional designation opportunities ranging rom purpose-speci-
ic unds to special initiatives.20 For example, donors may make charitable contri-
butionsthatwillgointoafunddedicatedtosavingtheAmboseliLions.21 I this
were not possible, a separate nonprot would have to be created to protect these
lions, a time-consuming undertaking that may not be set up until the lions are
urther endangered.
Without the ability to donate to this specic project o National Geographic,
individuals would not be able to oer direct nancial support to the project and
receive a tax deduction. Using the Public Broadcast Service as another example,
donations to PBS may be directed to local stations, which oten encourage donorsto designate support or specic programs.22
Donations to CFS projects and other nonprots operating several programs are,
properly maintained in accounts that reerence the project or campaign, never the
individual donor. Ater these donations are made, donors have no control o the
disposition o the unds. CFS practitioners do not maintain donor advised unds
and are, thereore, not sponsoring organizations.
nonpRoFits And the g ReAt Recession
Although typically utilized on behal o unincorporated projects, CFS is also an
option worth considering or existing 501(c)(3) public charities. In todays com-
petitive climate, even nancially healthy nonprots are seeking ways to reduce costs
and increase efciencies. Many other cash-strapped organizations are being pres-
sured to alter their mission and composition through merger. Although this trend
is in its early stages, a small but growing number o nonprots are embracing CFS
as a model enabling both short-term regrouping and long-term stability.
continUed need
Te Great Recession hit the independent sector beore it steamrolled Wall Street
and Main Street, and its devastating eects continued to aect nonprots even
ater the dust had settled elsewhere. Many believe the nonprot landscape has beenchanged permanently. Against this backdrop nonprots aced immense pressure to
Many believe the
nonprofit landscape has
been changed permanent
Against this backdrop
nonprofits aced immense
pressure to merge with
other organizations or old
altogether.
http://www.nationalgeographic.com/donate/questions.html#specifyhttp://www.nationalgeographic.com/donate/questions.html#specifyhttps://donate.nationalgeographic.org/SSLPage.aspx?pid=608&srcid=608https://donate.nationalgeographic.org/SSLPage.aspx?pid=608&srcid=608http://www.pbs.org/aboutpbs/aboutpbs_support.htmlhttp://www.pbs.org/aboutpbs/aboutpbs_support.htmlhttp://www.pbs.org/aboutpbs/aboutpbs_support.htmlhttps://donate.nationalgeographic.org/SSLPage.aspx?pid=608&srcid=608http://www.nationalgeographic.com/donate/questions.html#specify -
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Having more players in themarketplace o ideas
ensures that innovative
ideas are brought to the
oreront and old, worn-out
models all by the wayside
rather than becoming
institutionally entrenched.
23 natoal Ct o Catabl stattc
24 maaoka, Ja, Too Many Nonprofts? NoThere Arent
Enough Good Nonprofts, T Blu Aocado at tt://
www.bluaocado.og/cott/too-ay-oot-
o-t-at-oug-good-oot
merge with other organizations or old altogether. Much o this pressure is coming
rom oundations and government agencies that support nonprot endeavors.
Weve seen this dynamic beore in down cycles.
oo many nonprots! can be a popular but misguided mantra voiced by ounda-
tions during periods o economic crisis. And it is important to note that the
number o private oundations has ballooned by more than 85% over the past 15years twice the growth rate o the nonprots they serve.23
Te nonprot sector has indeed experienced substantial growth over the past
decade. However, this growth came about as the overall economy expanded,
government social service programs were dramatically cut or eliminated, and civil
liberties were being attacked. At the same time, income and wage disparities
between rich and poor grew to unprecedented levels, and the realities o climate
change were just beginning to be elt.
Tis is precisely the time that the need or charitable services would logically spike.
And this need remains as nonprots play a vital role in picking up the pieces and
creating a sustainable uture.Merger, though appropriate in certain circumstances, is a costly and immensely
complex option that will not always achieve an optimal or even positive outcome.
Multiple nonprots with overlapping, complementary services are not necessarily
indicative o inefciencies requiring remediation. Indeed, one commentator
suggests that there are actually too ew good nonprots. 24
Tere is no rule or law dictating that only one nonprot may oer a particular
service in a given area. Competition breeds innovation and drives efciencies.
Having more players in the marketplace o ideas ensures that innovative ideas are
brought to the oreront and old, outmoded models all by the wayside rather
than becoming institutionally entrenched.
Further, although it may oten appear that two nonprots are perorming identical
unctions, a closer examination will oten reveal that their operations are substan-
tially distinct or oered within a distinct geographic area.
compRehensiVe FiscAl s ponsoRship FoR the 501(c)(3)
Many nonprot inefciencies reside at administrative and not programmatic levels.
Comprehensive Fiscal Sponsorship addresses these issues by oering a sae haven
or merger-leery nonprots, preserving their missions while providing high-level
administrative support and the time and space to regroup. Unlike merger, there is
never any sense that one organization is being overtaken by another, undermin-
ing employee morale and service to constituents.
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Comprehensive Fiscal
Sponsorship ofers a
cheaper, aster, less
stressul alternative to
merger. Any nonprofit
eeling the pressure to
merge should careully
consider all available
options including
Comprehensive Fiscal
Sponsorship.
25 sack, Joata, Lets Slow Down the M&A Express,
Tsne eD Fou at tt://www.t.og/dou/
low_dow_g_x
Certainly, the consequences o merger can be devastating. Depending on the
bargaining power o the parties, a nonprot may nd that post merger its mission
is diluted or completely lost. Te real losers are the constituents and causes
squeezed through the cracks during these consolidations. So, the call or nonprot
merger must be careully weighed against its possible consequences.
Far rom being a hostile takeover or a predatory acquisition that benets oneparty only, a scal sponsorship transition, done properly, is a creative alternative
whose objective is to enable the development and nurturing o grassroots solutions
to community problems.25
Te organization retains its own brand identity and unique web presence with
CFS. Absent are time and asset-consuming negotiations over assets or program-
matic control or direction since the sponsored project will continue to control its
unding and programs. Tere is no potential board clash as boards may stay intact,
providing an extra layer o oversight in conjunction with the scal sponsor.
Nonprots transitioning into a CFS relationship go through a process similar to
that o unincorporated projects, with a ew minor variations. Tis transition ischeaper and ar less complex than a merger or acquisition. Outside consultants,
accountants and legal counsel are oten unnecessary. Mission compatibility remains
a threshold requirement.
Te employees o the nonprot become employees o the sponsor, gaining access to
attractive ringe benets administered by the sponsor. Operating unds o the
nonprot are typically transerred into an account held by the sponsor in the name
o the project. However, unds not needed to support project operations as well as
other assets, both real and intangible, may be retained by the nonprot in its own
separate accounts.
A memorandum o understanding specically tailored or nonprot projects shouldclearly dene the parameters o the relationship. I this option is exercised, meticu-
lous records must be maintained by both scal sponsor and the nonprot, encing
o assets subject to the sponsors control rom those that remain vested with the
independent 501(c)(3).
While the project is under the supportive umbrella o a CFS practitioner, its
corporate and 501(c)(3) designation will not be used in support o the CFS
projects purposes. I all sta and assets are transerred to the sponsor, the nonprot
essentially goes into hibernation until the project resumes independent operations.
When and i independent operations resume and the sponsored project is trans-
erred back to the 501(c)(3), the entire und balance and other assets residing with
the sponsor are directed back to the nonprot.
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The advantages oComprehensive Fiscal
Sponsorship are by no
means limited to small or
new organizations. The
flexibility, reduced burden
on project directors, greater
capacity, proessional
expertise, and cost savings
flow to fiscally sponsored
projects o all sizes.
26 Fo o oato sack, Joata, Fiscal
Sponsorship as a Nonproft Merger Alternative at tt://
www.t.og/dou/cal_oo_g_
altat
27 All b o t natoal ntwok o Fcal
soo actc CFs. tt://www.td.og/?d=212.
A atoal dctoy o cal oo ca b oud at
tt://www.caloodctoy.og/
28 See natoal Aocato o pooal eloy
Ogazato at tt://www.ao.og/
29 Fiscal Sponsorship Field Scan at tt://www.tdct.
og/lad/tc_d/Wp_FcalsooFldsca.d
Undoing a merger can be even more complex than creating one, i not impossible.
Te process or terminating a relationship with a scal sponsor, addressed in the
Ease o Exit section below is ar simpler. CFS oers a cheaper, aster, less stressul
alternative to merger. Any nonprot eeling the pressure to merge should careully
consider all available options including CFS.26Likewise,nanciallyhealthynon-
prots simply interested in increasing back ofce efciencies and renewing mission
ocus may wish to investigate what CFS has to oer. 27
incUb AtoR only?
Some observers mistakenly believe that scal sponsors are limited to serving as
incubators or uture independent nonprots. However, like proessional employer
organizations28 and other shared service models utilized by the private sector, scal
sponsors requently play a long-term role in the unctioning o charitable endeavors.
As ar as Comprehensive Fiscal Sponsorship practitioners are concerned, serving as
an incubator to uture nonprots is the exception rather than the rule. Results o
the most thorough survey o scal sponsors to date indicate that less than hal o
the projects o scal sponsors with over 50 projects have sought to be independent501(c)(3) nonprots.29 Te rate o retention is as high as 80 to 90% with some
organizations.
Although CFS practitioners generally adopt and oster the development o young,
experimental projects, ater these projects mature, they oten remain sponsored
programs. Te advantages o CFS are by no means limited to small or new organi-
zations. Te exibility, reduced burden on project directors, greater capacity,
proessional expertise and cost savings ow to scally sponsored projects o all sizes.
Tese advantages, both measurable and intangible, oten render leaving the nest
an unpalatable option or many, i not most, comprehensively sponsored projects.
the intangible benefits of
Comprehensive fisCal sponsorship
Every day, charitable organizations and their sta and volunteers add tremendous
value to our society. Tis value is oten impossible or prohibitively expensive to
quantiy. A group oering companionship to the elderly in their last days may not
add to our national GDP, yet has a proound eect on those served.
An organization that acilitates physical activity and teaches inner city children
healthy eating habits may be responsible or millions o dollars in medical cost
reductions years down the road or which it will never receive credit. An environ-mental nonprot that, through litigation, protects a water supply rom pollution
http://www.tsne.org/edforum/fiscal_sponsorship_merger_alternativehttp://www.tsne.org/edforum/fiscal_sponsorship_merger_alternativehttp://www.tsne.org/edforum/fiscal_sponsorship_merger_alternativehttp://www.tsne.org/edforum/fiscal_sponsorship_merger_alternativehttp://www.tides.org/?id=212.%20A%20national%20directory%20%20of%20fiscal%20sponsors%20can%20be%20found%20at%20http://www.fiscalsponsordirectory.org/http://www.tides.org/?id=212.%20A%20national%20directory%20%20of%20fiscal%20sponsors%20can%20be%20found%20at%20http://www.fiscalsponsordirectory.org/http://www.tides.org/?id=212.%20A%20national%20directory%20%20of%20fiscal%20sponsors%20can%20be%20found%20at%20http://www.fiscalsponsordirectory.org/http://www.tidescenter.org/fileadmin/tc_pdfs/WP_FiscalSponsorFieldScan.pdfhttp://www.tidescenter.org/fileadmin/tc_pdfs/WP_FiscalSponsorFieldScan.pdfhttp://www.tidescenter.org/fileadmin/tc_pdfs/WP_FiscalSponsorFieldScan.pdfhttp://www.tidescenter.org/fileadmin/tc_pdfs/WP_FiscalSponsorFieldScan.pdfhttp://www.tides.org/?id=212.%20A%20national%20directory%20%20of%20fiscal%20sponsors%20can%20be%20found%20at%20http://www.fiscalsponsordirectory.org/http://www.tsne.org/edforum/fiscal_sponsorship_merger_alternative -
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30 See T noot Ct ntwok at
tt://www.ootct.og
31 saca pf,A haven in a high-rent world,
T Boto Glob at tt://www.boto.co/w/
local/aacutt/atcl/2008/04/02/a_a_
_a_g_t_wold/
saves thousands o lives, though attributing a single saved lie to that organizations
actions can be elusive.
Likewise,ComprehensiveFiscalSponsorshipprovidesprojectsthatcreatesocietal
value and advance culture with a wealth o benets that are not readily identiable
and rarely mentioned. Nevertheless they are real. As soon as a project becomes
scally sponsored and these intangible benets begin to accrue, projects otenreevaluate their independent aspirations.
Because CFS sta work with a diverse group o projects, they gain valuable knowl-
edge that they can then pass on to individual projects. Examples include spotting
and agging potential nancial and human resource concerns beore they become
problems, understanding the intricacies o unders requirements, and thinking
strategically about project needs. CFS projects are, thereore, in a better position to
weather economic downturns, navigating potential human resource issues and
stretching donor dollars arther.
Beyond back ofce operations, several sponsors now provide their projects with
capacity building services designed to inuse the projects with the capabilities andbest practices that the sponsors themselves operate under.
Tese sponsors oster a culture o sharing with shared back-ofce operations
being only one component o an accessible network created through CFS. Fiscal
sponsors that have operated or decades oer their projects access to an extensive
list o contacts and relationships cultivated over many years. Individuals and groups
that have worked with comprehensive sponsors in the past realize the immense
value these organizations bring.
Tus, requently they are willing to make themselves available, extending their
expertise and contacts to sponsored projects. Individual projects themselves derive
great value rom sharing experiences, lessons and best practices with one other.
FocUs And innoVAtion
Several organizations are taking the culture o sharing to another level, operating
nonprot centers, buildings that oer both aordable and stable ofce space to
nonprots and scally sponsored projects.30 raditionally, nonprots have been
subject to the ebbs and ows o the real estate market. When rent rates balloon,
these groups are oten orced to relocate to the ringes o urban centers impeding
access to public transportation and the constituents they serve.
Nonprot centers provide a solution to this persistent problem. Tey may consis-
tent rents oten below market value and may also oer shared conerencespaces, I support, and even lunchtime seminars and yoga classes.31 Having
http://www.boston.com/news/local/massachusetts/articles/2008/04/02/a_haven_in_a_high_rent_world/http://www.boston.com/news/local/massachusetts/articles/2008/04/02/a_haven_in_a_high_rent_world/http://www.boston.com/news/local/massachusetts/articles/2008/04/02/a_haven_in_a_high_rent_world/http://www.boston.com/news/local/massachusetts/articles/2008/04/02/a_haven_in_a_high_rent_world/ -
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Sometimes a project
reaches a point in its
development where a
spinof rom its fiscal
sponsor is appropriate.
32 Termination o an Exempt Organization at
tt://www..go/cat/atcl/0,,d=156422,00.tl
signicant numbers o mission driven groups in one location promotes collabora-
tion and increases networking opportunities through both planned networking
events and on an inormal basis.
As noted, Comprehensive Fiscal Sponsorship urnishes projects with comprehen-
sive personnel policies, liability insurance, and nancial and administrative exper-
tise. It also keeps projects abreast o and trained on new government regulations asthey arise. Having these reliable operational mechanisms in place aords project
leaders peace o mind, eliminating many o the stresses that can derail an opera-
tion. Tis intangible quality cannot be underestimated.
A project leaders time and thoughts will not be sidetracked by the plethora o
issues inherent in managing the back ofce operations o any organization. Project
sta works towards mission ulllment knowing that administrative tasks and
compliance matters are being efciently addressed. CFS keeps the engines o their
projects humming, allowing passionate mission-driven project leaders and sta to
ocus on the activities that are core to the projects existence.
ease of exit
Sometimes a project reaches a point in its development where a spino rom its
scal sponsor is appropriate. It is imperative that the process and terms o any such
separation be anticipated and memorialized in the memorandum o understanding
or similar agreement. Otherwise, unnecessary complications may occur. Under the
typical memorandum o understanding, the project may retain the unds raised
and allocated or it along with any real and intangible property it has developed so
long as it attains its own 501(c)(3) tax-exempt statuses or locates another suitable
scal sponsor.
For a number o reasons, projects occasionally cease to operate without being spuno into new entities. Te project may have ullled its purpose or is no longer
nancially viable. Winding up a projects operations highlights the nal advantage
scally sponsored projects may realize: ease o exit.
When a nonprot organization winds up its operations, it must do so in compli-
ance with IRS requirements. Tis usually entails, at a minimum, completing
Schedule N on Form 990 and listing the disposition o organizational assets in
excruciating detail.32When a Comprehensive Fiscal Sponsorship project terminates
its operations, all assets previously maintained by the project will simply be spent
on purposes in urtherance o the sponsors mission.
Comprehensive Fiscal
Sponsorship keeps the
engines o their projects
humming, allowing
passionate mission-driven
project leaders and staf
to ocus on the activities
that are core to the
projects existence.
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Crisis breeds opportunityand organizations
practicing Comprehensive
Fiscal Sponsorship represe
a piece o a young but
rapidly maturing
movement in the social
sector that thrives on
the sharing o resources
and inormation.
33 Ud t law o agcy, a agt act o bal o
aot o o ogazato. Tat tty a t
ow to dct ad cotol t actt o t agt.
Ug t tology to dcb t lato
btw a 501(c)(3) ad a ojct l tat t
ojct xt cotol o t oot caty. To
coly wt irs dctat ad au accoutablty,
t oo ut walk a l ad lay t ol o
twad; allowg a gat dal o ojct autooy
wl xcg al autoty by oly gg of o
cotact ad ot cubac tat ut
t caty xt uo ad coly wt all
alcabl law.
Further, individual states have various regulations and procedures that must be
ollowed when a registered entity dissolves. None o these complicated ling
requirements are present when a scal sponsored project is terminated. Te
dissolution o the project is simply reected on the scal sponsors Form 990. Te
use o scal sponsorship eliminates considerable expenses (oten legal) associated
with complying with dissolution.
ConClusion
Savvy, orward-looking unders are taking notice o the numerous advantages that
comprehensive scal sponsors oer and are becoming more receptive to unding
programs that nd homes at credible sponsors. Tese scal sponsors increasingly
play the role o project authenticator, vouching or a projects credibility to
prospective unders. Becoming a program at a reputable Comprehensive Fiscal
Sponsorship practitioner conveys several messages to oundations, other unders
and the public. It says:
1) Tis project has been through a thorough evaluation process that determined ithas the capacity to achieve its underlying objectives.
2) All back-ofce operations o the project are managed by competent, experienced
proessionals ensuring maximum transparency.
3) Project sta members receive proper compensation and preerable benets,
increasing retention and minimizing burnout.
4) Te project will be able to ocus on the mission and not be derailed by adminis-
trative burdens and complex compliance issues.
A program utilizing Comprehensive Fiscal Sponsorship also communicates that
it has the wherewithal to recognize its strengths as a passionate, mission-driven
organization that properly addresses its need or efcient, seasoned backofce support.
new solUtions FoR new ReAlities
Fiscal sponsorship is still sometimes reerred to incorrectly as scal
agency.33 Fortunately, this outdated terminology is rapidly disappearing. Similarly,
old assumptions regarding nonprots and the social sector are being shed as new
realities demand innovative solutions.
For many years, a premium was placed on the independence o organizations
operating in the nonprot sector even as the private sector realized the advantages
oered through shared services, collaborative pricing and strategic outsourcing.Tis thinking is both illogical and counterintuitive. Crisis breeds opportunity and
organizations practicing Comprehensive Fiscal Sponsorship represent part o a
The use o fiscal
sponsorship eliminates
considerable expenses
(oten legal) associated
with complying with
dissolution.
-
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Comprehensive FiscalSponsorship ofers a
realistic, honest approach
to not only survive, but
excel in the challenges
o our day and those that
lie ahead.
young but rapidly maturing movement in the social sector that thrives on sharing
resources and inormation.
Creative solutions abound including the multitenant nonprot centers now ound
throughout the world and alliances o nonprots that turn over their back oce
operations to one supporting organization, such as the MACC Commonwealth
currently being pioneered in Minnesota.34
Likewise, innovative ventures like AnnArbors Nonprot Enterprise at Work (NEW), through their npServM system,
ofer nonprots shared I services that reduce hardware and sotware costs, increase
reliability, enhance data security and allow or easy remote access. 35
Tese orward-thinking organizations and alliances breathe long-term stability into
groups that, like themselves, are dedicated to strengthening the presence, voice and
efectiveness o civil society. Tough the methods employed vary, all o these groups
enable nonprots and progressive grassroots movements to ocus on mission-relat-
ed activities by assuming or sharing time-consuming and oten complex tasks that,
though essential, are not mission-related. By transerring jobs to organizations
better-positioned to perorm them eciently and efectively, precious time and
money are saved, maximizing the potential impact o the nonprot sector.
It is crucial to the uture success o Comprehensive Fiscal Sponsorship and the
charitable sector in general that oundations and individuals providing nancial
support to nonprots understand and embrace these solutions. Te bottom line is
that comprehensive scal sponsorship stretches charitable dollars urther and more
efectively than typical stand-alone small to midsized nonprots and even many
larger organizations can. Comprehensive scal sponsorship ofers a realistic, honest
approach to not only survive, but excel in the challenges o our day and those that
lie ahead.
34 maCC Coowt t
tt://cccoowt.og/
35 nooft et t Wok (neW) t
tt://www.w.og/wtwdo/tcoogy.t
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