The field of fiscal sponsorship is growing by leaps and bounds, driven by the diversity of urgent overlapping problems and opportunities for reinvention that we face today: social justice, climate change, income inequality, and many others—not to mention the global COVID-19 pandemic. Adding to these broader forces are the changing dynamics of the nonprofit sector writ large. Fiscal sponsorship is finding itself at the center of the conversation around nonprofit resource sharing, consolidation, and general “repositioning”. And new generations of social entrepreneurs and changemakers are finding fiscal sponsorship an attractive and flexible alternative to forming standalone nonprofits. We are sorely overdue for current and more comprehensive data on this dynamic and impactful field.

The subject of strategic growth and scale has become a central question for the fiscal sponsorship community. The forces of growing social, racial, and economic inequity in our country, compounded by the pandemic, have fueled both a rush of beleaguered organizations seeking refuge and safety in numbers, as well as accelerated growth in grassroots, social justice organizations seeking fiscal sponsors to accelerate their missions. Most fiscal sponsors are reporting tremendous growth in the demand for their support, and many individual projects are experiencing rapid and significant influxes of support and parallel increases in demand for their services. Questions about how to think about scale, whether to scale, and how big is big enough are top of mind.

Central to our ongoing reckoning with racial, social, and economic justice and equity is the question of how power and authority is shifted and shared within and among nonprofits and the communities they support. The latter notion of power sharing is the focus of this post, in particular as it pertains to fiscal sponsorship and the sponsor-sponsee relationship.

Fiscal sponsors, in particular “Model A” practitioners, are essentially managers of cooperatized or commonized resources: management staff, corporate formation, tax status, technology, systems, etc., shared among multiple “projects”. Hence our coinage of management commons as an alternative term for fiscal sponsorship. Though many sponsors likely do not think of themselves in this way, we see a number of benefits to thinking of fiscal sponsorship as commons management.

In the fiscal sponsorship community, we often hear about the tremendous impact that grassroots, all-volunteer projects have on their communities, thanks in part to the support of the sponsor. But if that impact is predicated on volunteer (uncompensated) effort, is that really a success? Moreover, is it sustainable? Likely no, in both cases. Of course, volunteerism and zillions of dollars worth of sweat equity will remain a mainstay of our sector, as we wrote in our last post. This is both how we carry on in such adverse funding and economic conditions. But it also means we need to push all the more toward fair and individually sustainable compensation.

Undercapitalization has been a topic of conversation in the funding sector for several decades, with little progress in addressing the problem at scale. Fiscal sponsors offer a potential pathway to providing capital--both loan or grant funds--at scale by raising capital that effectively capitalizes all of their projects through one loan-to-grant fund: collective capitalization. This can make for a compelling argument to funders: in providing a fiscal sponsor (or group of sponsors) with capital to lend and grant, they are capitalizing tens or hundreds of organizations at once, instead of one at a time.