Gregory Colvin is the author of Fiscal Sponsorship: 6 Ways To Do It Right now in its 3rd edition, co-authored by Stephanie Petit
NEWS FROM THE WORLD OF FISCAL SPONSORSHIP
501(c)(4)s — a “growing phenomenon”
By Greg Colvin — February 24, 2023
Recently, I participated in an email discussion about the operation of some fiscal sponsors under a Section 501(c)(4) tax exemption, rather than a 501(c)(3) charitable exempt status. The discussion was kicked off by Geoff Link, Study Center executive director and head of Study Center Press, our publisher, and I then asked my former law partners from Adler & Colvin, Stephanie Petit and Rosemary Fei, to weigh in on the topic. We thought you might be interested. MORE
NOT JUST A BLOG — A RESOURCE FOR FISCAL SPONSORS
Last year, our country faced overwhelming problems — a surging pandemic, joblessness and homelessness, racial inequities, interrupted educations, unprecedented natural disasters and so much more. Some of these have begun to resolve, but not all.
I restarted this blog, launched in 2005, at year’s end, and I’m convinced that for solutions to our ongoing challenges, we need to look beyond the for-profit business model, existing government bureaucracies, and traditional tax-exempt nonprofit philanthropy, and opt instead for grassroots innovations like fiscal sponsorship — done right.
There’s never been a time with a greater need for people to rise up, organize themselves, imagine a better future, and assemble the resources to secure that future. One resource for new public interest projects is using the umbrella of dedicated, professional 501(c)(3) fiscal sponsors.
Projects can quickly qualify for tax-deductible donations and grants, sometimes even get started in a matter of days, not the months required to apply to and receive formal IRS approval on their own.
This site is here to help fiscal sponsors and projects considering fiscal sponsorship. It has useful tips, timely resources, alerts, news you can use from the field, archives of past posts and guest contributors.
Some posts are informed by the enormous, real-world progress of diverse, inspiring projects and sponsors. Other site contents are drawn from Study Center Press’ third edition of Fiscal Sponsorship: 6 Ways To Do It Right, which my Adler & Colvin colleague Stephanie Petit and I co-authored in 2019, completely revising and updating the 2005 second edition.
We’re gratified by the growing interest in the third edition and hope you find this blog a useful addition.
Useful Information & Tips
Here are a few key fundamentals for those new to fiscal sponsorship and, perhaps, a refresher for more experienced practitioners.
Synopsis: The Basics of Fiscal Sponsorship A summary of the evolution of “fiscal sponsorship” in 246 words by Gregory L. Colvin and Stephanie L. Petit
Fiscal Agency V. Fiscal Sponsorship Why “fiscal agency” sends the wrong message — to the public and the IRS
Summary and Chart of the Models Model progression moves from the project with the least financial independence from the sponsor to the model with the most financial independence
How Should a Model C Project Apply to a Foundation for a Grant Via Its Fiscal Sponsor? Tips for projects and funders about proper documentation
Deciding Whether to Form a New Nonprofit or Use a Fiscal SponsorThe pros and cons of setting up a new tax-exempt entity versus using Model A fiscal sponsorship
Project Intake Checklist At a minimum: What a fiscal sponsor needs to know about an applicant for fiscal sponsorship
Transfers In and Out Guidelines for projects transferring in from another sponsor, leaving to go to another sponsor, or leaving to form its own 501(c)(3)
Fiscal Sponsorship (Model C) Letter to Vendors Letter clarifies sponsor-project relationship regarding payment responsibility
Fiscal Sponsor Directory Looking for a fiscal sponsor? This growing central repository of useful data on practicing sponsors nationwide was created and is maintained by San Francisco Study Center, publisher of Fiscal Sponsorship: 6 Ways To Do It Right. The site also includes a chronology of pertinent legal rulings and important events and developments in fiscal sponsorship, and news from the field.
Foundation Center Online and GuideStar merged in 2019 under Candid, a search engine for finding information about foundations and the grants they make, nonprofit profiles and related topics.
Adler & Colvin blog Written by the attorneys and paralegals of Adler & Colvin, this blog discusses legal issues in the nonprofit and tax-exempt organizations world.
Use of Fiscal Agents: A Trap for the Unwary, John A. Edie, Counsel on Foundations, 1989