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
Preparing for Tax Day
Preparing for Tax DayAn interview with Davalois Fearon In preparation for Tax Day, we talked with Davalois Fearon about her experience working with Pentacle, and how it has helped her with her taxes and gain overall financial health, especially through Fiscal...
Planning A Fundraising Event
Planning A Fundraising EventEvent fundraising can be a great way to raise funds There are a number of ways to fundraise money for an organization or cause. One of the most collaborative ways to fundraise is by hosting an event. There are many steps to consider when...
Understanding A Cash Flow Statement
Understanding A Cash Flow Statement What is a Cash Flow Statement? A Cash Flow Statement is a financial statement that tracks the movement of a company’s cash over a selected period of time. This is an all-inclusive statement because it includes the inflow and outflow...
Understanding A Balance Sheet
Understanding a Balance SheetWhat is a Balance Sheet? A Balance Sheet is a financial statement that summarizes the company’s assets, liabilities, and equity at a specific point in time. The Balance Sheet is an essential tool used by organizational leaders, Board of...
How to create your own bookkeeping system for arts businesses
How to create your own bookkeeping system for arts businessesManaging your organization’s finances can tend to be overwhelming. Who gave us funds for what? Who is getting paid for their services? How do I show a final report to stay compliant with the grant I...
What is an Independent Contractor?
What is an Independent Contractor?What types of professions work as Independent Contractors? In the professional services world, we know that lawyers, doctors, accountants, and others often provide their services to the general public as independent contractors....
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.
