What is Fiscal Sponsorship?
Fiscal Sponsorship
While many entities choose to incorporate, Fiscal Sponsorship is another option in which a 501(c)3 organization provides formal support to the entity. Instead of going through the administrative burden of incorporating as a nonprofit, individuals and corporations can work with this nonprofit in a formal arrangement called “Fiscal Sponsorship.” Fiscal Sponsors enable non tax-exempt organizations/programs to accept tax-exempt donations and grants intended only for nonprofit organizations, in addition to other benefits received by nonprofits. Fiscal Sponsorship began as a stepping stone for artists to eventually incorporate as their own 501(c)3. Over the years, more and more artists have shifted this view, viewing Fiscal Sponsorship as a viable business model.
Fiscal Sponsorship models
In order to qualify for sponsorship, artists/companies/projects must be engaged in activities related to the sponsoring organization’s mission. There are varying models of fiscal sponsorship and fees involved, which represent administrative cost as well as a percentage of the income the sponsoring organization receives. Those in search of Fiscal Sponsorship should do thorough research to find a sponsoring organization that best fits their needs. While Fiscal Sponsorship is the beginnings of a financial relationship, in practice it has the potential to provide so much more! Comprehensive fiscal sponsorship programs can offer everything from payroll processing, vendor payments, bookkeeping, and insurance. With extra layers of administrative support provided by the sponsor, the sponsored entity can focus on the programming of their organization.
nextSteps | 11.23.20
Related Blog Posts
Checklist for Processing 1099’s and W2s
Checklist for Processing 1099’s and W2’sEnd of Year Payroll Tax Forms: W2, 1099 Some of the most important payroll tax forms -- W2 and 1099 forms -- must be mailed out to your employees and contractors shortly after the calendar year ends. Any contractors who were...
5 Ways That You Can Benefit From Fiscal Sponsorship
5 Ways That You Can Benefit From Fiscal SponsorshipFiscal Sponsorship Has Both Financial and Administrative Benefits Fiscal Sponsorship has many financial and administrative benefits. Fiscal sponsorship refers to the practice of non-profit organizations...
Paycheck Protection Flexibility Act Adds Key Features to Existing Payroll Protection Program (PPP)
Paycheck Protection Flexibility Act Adds Key Features to Existing Payroll Protection Program (PPP) New Law Improves Provisions for PPP Loan Forgiveness PPP Applications Accepted until June 30 The Paycheck Protection Program (PPP), provides short term loans to small...
Additional Funding Available for the Payroll Protection Program (PPP)
Now that Congress has supplemented the first round of funding, those who haven’t yet applied for PPP funds should do so soon, in order to get in line for the loans.
SBA Economic Injury Disaster Loan
SBA Economic Injury Disaster LoanCARES Act Expands Economic Injury Disaster Loan Program Pentacle remains dedicated to continuing to provide a high level of support to artists during these extraordinary circumstances. Alongside many other key and respected...
Investing during COVID-19 FAQ
Investing during COVID-19 FAQ Tips for Maintaing Good Financial Health as an Artist A market downturn might feel like a strange time to be thinking about your investments, but there are critical steps you can take to maintaining good financial health as an artist with...
Pentacle’s nextSteps is supported, in part, by public funds from the National Endowment for the Arts, the New York State Council on the Arts with the support of Governor Andrew M. Cuomo and the New York State Legislature, and the New York City Department of Cultural Affairs in partnership with the City Council. Pentacle receives private support for nextSteps from the Rockefeller Brothers Fund and The Howard Gilman Foundation.