A relatively small number of foundations award grants directly to
individuals; the vast majority limiting their funding to
nonprofit organizations only. However, if you are seeking support for a
project but are not affiliated with a nonprofit organization, you may be
able to use an organization to serve as your fiscal sponsor. What
this means is that the nonprofit organization would apply on your behalf
for funding and, if received administer the funds and complete any
required reporting. Contact us today for more information on obtaining Fiscal Sponsorship from Foster & Banks Walk in Faith Foundation.
What is a Fiscal Sponsor?
An arrangement made between an individual or organization that is
doing a program or project and wants to get support/funding from a
foundation government agency or any tax-deductible donation from an
individual or corporation with a tax-exempt organization. Fiscal sponsorships enable organizations or individuals access to funds that may not otherwise be available to them. Fiscal sponsorship is often temporary. Fiscal sponsors are very selective in determining what projects to take on for fiscal agent relationships.
Who can be a Fiscal Sponsor? Any organization that is tax
exempt under Section 501(c )(3) – (which means they have received a
letter from the IRS approving the organization’s application for tax
exempt status) may be a fiscal sponsor. If you are seeking a fiscal
sponsorship it is always a good idea to find one whose mission will be
enhanced or advanced by the project or program that you are proposing.
Pre-approved grant relationship Fiscal Sponsorship There are several types of Fiscal Sponsorship, Foster & Banks Walk in Faith Foundation uses the following model:
In a Pre-approved grant relationship Sponsorship Relationship, the
fiscally sponsored project does not become a program belonging to the
sponsor (as is the case with Comprehensive Sponsorship), but is a
separate entity responsible for managing its own tax reporting and
liability issues. In addition, the sponsor does not necessarily maintain
ownership of any part of the results of the project’s work, ownership
rights should be addressed in the fiscal sponsor agreement and could
potentially result in some type of joint ownership. The sponsor simply
assures itself that the project will use the grant funds received to
accomplish the ends described in the grant proposal.
Example of a Pre-Approved Grant Relationship: An artist not affiliated with any nonprofit organization wants to do an outreach program in the schools and she goes to the local Arts Consortium to share her idea. The Arts Consortium thinks it’s a valid cause however does not want full liability or ownership of the project. The consortium agrees to fund project assuming all of the funds are raised. A grant agreement is drawn up and the artist and the consortium go to the local City Foundation and request restricted funds for the outreach program. Funds are obtained and the sponsor distributes these to project-based expenses that follows an agreed upon payment plan. This will be considered taxable income for the artist and not the sponsor.