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WHAT IS A FISCAL SPONSOR
Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack
exempt status. Fiscal sponsorship refers to the practice of non-profit organizations offering their legal and tax-exempt
status to groups engaged in activities related to the organization's missions. It typically involves a fee-based contractual
arrangement between a project and an established non-profit
Social and Environmental Entrepreneurs is a 501(c)(3) nonprofit organization. The projects under our sponsorship are
not separate organizations, they are extensions of SEE's mission.
One difference in being a sponsored project versus your own separate 501(c)(3) organization is that the fiscal sponsor
is legally and financially responsible for all your activities. In upholding this responsibility, the sponsor absorbs all of
the administrative duties of the project pertaining to processing and disbursing funds in exchange for a small fiscal
fee. The fee varies with the size of the sponsor but the average range is 5-14%. SEE's current fiscal fee is at a low of
6.5%.
There are various benefits that come with opting for sponsorship instead of pursuing your own 501(c)(3) status:
- Start-up guidance to provide necessary resources and contacts to begin the fundraising process
- Existing systems in place to teach project directors the responsibilities and limitations of non-profits
- Avoiding the time-consuming and costly process of filing to the IRS directly for status
- Using the time with a sponsor to determine if your project can eventually grow to a sustainable level
SEE’s fiscal sponsorship encompasses the following:
- Inclusion in the corporate, legal structure of Social and Environmental Entrepreneurs
- Federal and state tax exemption for income and property tax purposes
- Contributions typically tax-deductible for donors
- Grants from private foundations
- Board of Directors that governs the overall direction of SEE's projects
The partnership between project directors and a sponsor's staff exists when the combined effort of administrative,
financial, fundraising and educational awareness come together to work towards progressive change.
