What is 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
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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 Booth Ferris Foundation, the Howard Gilman Foundation, the Rockefeller Brothers Fund, and the New York Community Trust.