Frequently Asked Questions

Is fiscal sponsorship only for start-up nonprofits or temporary projects?

No. Comprehensive fiscal sponsorship can be a solution for sharing back office staff and systems among established nonprofits, without having to give up your nonprofit, board, mission or vision. For start-ups or projects without an entity or tax exemption, a fiscal sponsor can be either a temporary support solution or a “forever” home for your work.

Is fiscal sponsorship only for organizations that need a 501(c)(3) to receive contributions?

No. Other forms of fiscal sponsorship, notably comprehensive fiscal sponsorship, offer more robust wrap-around support: staff for finance, HR, legal, fundraising, and marketing, as well as insurances, regulatory/tax compliance, and key management technologies.

Is fiscal sponsorship more expensive than managing on my own?

In most cases, no. In fact it allows you to save costs while adding capacity. A recent study by Social Impact Commons examined 475 arts organizations in Southeastern PA operating below $2M in budget and found that they spent between 17% and 27% of their income on the same back office supports a fiscal sponsor can offer for between 9% and 15%—a savings of about 10% of income!

Is fiscal sponsorship only for projects and organizations with small budgets?

No. The above economic and value of integrated support holds true for projects and organizations up to about $10M in budget!

Will I lose control of my mission, vision, or decisions that I care about?

No. Fiscal sponsors are co-managers with you for everything behind the curtain. Your public face remains independent: your brand, donor/funder relationships and decisions about vision, mission, and organizational development remain with you (and your board, if you have one). Fiscal sponsors are like shopping malls and projects like the individual storefront businesses. The individual businesses share lots of common resources provided by the mall (parking, common space, wayfinding, security, etc.), but retain their independent brands, customer relationships, and secure space for their assets.

Will working through a sponsor impede my ability to pay for things and operate?

Not so. Quality fiscal sponsors help keep you out of financial trouble and make sure the financial house is in order, but should not stand in your way of maintaining smooth operations.

Will sharing infrastructure place my assets at risk?

No. Comprehensive fiscal sponsors manage all of your revenue and expenses, though only with your authorized instruction and through fully restricted fund accounting. Staff and systems may be shared, but there is no borrowing or sharing financial assets among sponsored organizations.

Is fiscal sponsorship an exotic or untested nonprofit model?

No. The “models” that have been identified are just ways to describe tried and true nonprofit structures. Fiscal sponsorship is actually just multi-program management—like a theatre managing multiple productions, a hospital with many different clinics, or a university with multiple schools and departments. Only with fiscal sponsorship, your brand, mission, vision, and core relationships remain independently yours.

Are funders and donors hesitant to work with fiscal sponsors?

This is increasingly not the case as the funding community is embracing fiscal sponsorship as a means of promoting greater sustainability in the nonprofit sector. Where we have encountered hesitancy, it’s almost always an issue of understanding of or familiarity with fiscal sponsorship, not hard or considered policy. A bit of clarification and education from the sponsor usually sets things right.