Is your organization doing good work but without 501(c)(3) status? If so, you are eligible to receive grant funding through a fiscal sponsor. You can find out about this process from the National Network of Fiscal Sponsors and by reviewing the fiscal sponsorship guidelines on their website. You can also learn more from actual fiscal sponsors like CAF America.
The Relationship With a Fiscal Sponsor
The fiscal sponsor relationship requires ongoing active participation from both parties. Regular communication, attention to detail, and holding each other accountable are critical. A project under sponsorship is responsible for understanding and conducting ethical business practices consistent with IRS regulations, all applicable laws, funder restrictions, and fiscal sponsor policies and procedures. Sponsored projects typically carry out programmatic activities that contribute or relate to the mission of the fiscal sponsor. If a project’s mission changes, the new mission should also have a charitable purpose that remains compatible with that of the sponsor.
Pre-Approved Grant Relationship Fiscal Sponsorship
In a Pre-Approved Grant Relationship Fiscal Sponsorship, the fiscally-sponsored project does not become a program belonging to the sponsor, 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; however, ownership rights may be addressed in the fiscal sponsor agreement and could potentially result in some form of joint ownership. The sponsor simply assures that the project will use the grant funds received to accomplish the ends described in the grant proposal.