VOCAL CO-OP

A Guide to Finding Fiscal Sponsors

What is a fiscal sponsor?

If your group is thinking of applying for grant funding, you will usually need either legal 501c3 nonprofit status or a fiscal sponsor. Getting 501c3 status takes money, time and energy. As an alternative, people who have a new project, or an idea for one, sometimes turn to a Fiscal Sponsor to get it off the ground. Fiscal sponsors will allow your group to apply for funding, even if you are not a 501c3 nonprofit. Fiscal sponsors are also sometimes called “fiscal agents.”

Fiscal sponsors can be helpful in other ways - you can get affordable health insurance, assistance with bookkeeping and financial management and other benefits. There are also potential down sides - a fiscal sponsor will be legally responsible for your program and how your money gets spent. You may wish to meet with your sponsor ahead of time, discuss this issue, and make agreements about who will be in control of decision making for your program. We suggest trying to find a fiscal sponsor who supports the vision of a peer-run program.

You can learn more about fiscal sponsor-ship at the Community Technical Assistance Center Website: http://www.ctaconline.org/fiscal.asp 

How do fiscal sponsors work?

A fiscal sponsor will make it possible for your program to apply for grant funding. Some fiscal sponsors will offer a lot of other help for your program. Others offer little or no additional support. Arrangements vary widely. Types of support you may find from a fiscal sponsor:

• Fiscal Sponsorship - legal infrastructure of a 501(c)(3), with incorporation, IRS exemption, and charitable registration.
• Financial Services - oversight of revenues and expenditures, monthly financial reports, budgetary tracking, payment of invoices, audit and governmental reporting, and tax returns.
• Employee Benefits - vacation & sick pay compensation, health, dental, life and disability, and retirement plans. (your program may be able to save significant money by getting on your sponsor’s group health insurance plan)
• Administrative Support - liability insurance, grant management, etc.
• Human Resources Policies & Training - assistance in personnel matters and training in human resources.

How much do fiscal sponsors cost?

Many fiscal sponsors will charge a fee, often a percentage of your program’s income. Fees vary, and are often between 5% and 15% of your program's income - some do not charge anything. If health insurance is offered, there will be an additional cost for this. Some fiscal sponsors will require that you purchase health insurance for full-time employees.

Where can we find a fiscal sponsor?

Many programs start out by approaching a nonprofit organization they already have a connection to. If you or your group has a relationship with another nonprofit, you may try contacting this organization and asking if they would like to help support your group by serving as a fiscal sponsor.

When approaching organizations, you may wish to keep in mind that serving as a fiscal sponsor can be a lot of extra work for the sponsoring organization, and they may need to have certain kinds of bookkeeping systems in place - not all organizations will be able to do this. VOCAL does not serve as a fiscal sponsor for other groups - but some other nonprofits can offer this service.

If you don't have a relationship with another organization, you can look around for other organizations that may be interested in supporting your mission. One place to look for other nonprofits is www.guidestar.org

Some groups seek fiscal sponsorship from a local CSB, Clubhouse, or other tradi-tional mental health program. For some groups, this is a generous offer of support and a convenient and helpful match. However, we have also heard from peer groups that have run into conflicts with this kind of arrangement. One of the big issues for consumer-run programs is de-termining whether peers have control over the group, and who makes decisions about hiring, finances, and policies. This is especially an issue for groups that are located inside a CSB or other program. If you decide to go this route, you may wish to discuss these issues you’re your spon-sor and come to mutual agreements.

There are also some organizations that have special fiscal sponsors programs al-ready in place. Below I have put together a little list of programs that offer this ser-vice. These organizations serve as fiscal sponsors for dozens of other groups, and are all set up to do it! Applications for fiscal sponsorship vary from group to group - most have a written application process that is about 5 pages long. Ap-plying may take time, so plan ahead.

VOCAL has worked in the past with the Virginia Organizing Project and had very good experiences with this group. They serve as a fiscal sponsor to many groups, and may be a good place to start out contacting. We have not had contact with the other groups on this list, so you can help us gather information. If you contact any of these groups and find you and are successful (or unsuccessful) in getting fiscal sponsorship, please let us know. We will pass the word on to other programs looking for sponsors.

Organizations offering fiscal sponsorship to grassroots & social justice groups:

The Virginia Organizing Project
www.virginia-organizing.org/

Agape Foundation
www.agapefn.org/

AJ Muste Memorial Institute
www.ajmuste.org/

International Humanities Center - Nonprofit Incubator
www.ihcenter.org/

Peace Development Fund
www.peacefund.org/

Tides Center
www.tidescenter.org

Social and Environmental Entrepreneurs

www.saveourplanet.org

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 ~ Guide to Fiscal Sponsors, a VOCAL CO-OP Resource List by Cassandra Nudel, cassandra@vocalvirginia.org