• Latest
  • Trending
  • All
  • Management
  • Give & Care
  • Marketing
Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

March 3, 2023
The Three Layers of A Person and Your Fundraising Story – Agitator

The Three Layers of A Person and Your Fundraising Story – Agitator

March 20, 2023
Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

March 18, 2023
Advertisement
The 5 Best Fundraising Ideas for Your School’s PTA

The 5 Best Fundraising Ideas for Your School’s PTA

March 18, 2023
Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

March 17, 2023
Are You Giving Your Donors the Trump Treatment? – Agitator

Iron Law of Megaprojects – Agitator

March 17, 2023
Hosting Engaging Virtual Events: How to Boost Participation

Hosting Engaging Virtual Events: How to Boost Participation

March 17, 2023
Workaholic and Caretaker: Two Patterns That Make Saying No Hard

Workaholic and Caretaker: Two Patterns That Make Saying No Hard

March 16, 2023
All Segmented Up and Nowhere to Go – Agitator

All Segmented Up and Nowhere to Go – Agitator

March 15, 2023
Understanding Nonprofit Membership Models: Quick Guide

Understanding Nonprofit Membership Models: Quick Guide

March 15, 2023
How to Make Your Social Media Updates (Among Other Things) More Relevant

How to Make Your Social Media Updates (Among Other Things) More Relevant

March 14, 2023
Tuesday, March 21, 2023
  • Home
  • Charity News
  • Give & Care
    The 5 Best Fundraising Ideas for Your School’s PTA

    The 5 Best Fundraising Ideas for Your School’s PTA

    Lenten Pastoral Notes For Better Engagement

    Lenten Pastoral Notes For Better Engagement

    Appuntamento Evaluation

    Top Fundraising Platforms for Catholic Organizations

    Top Fundraising Platforms for Catholic Organizations

    10 Unique Nonprofit Fundraising Ideas for a Productive 2023

    10 Unique Nonprofit Fundraising Ideas for a Productive 2023

    How to Create Successful Nonprofit Fundraising Videos

    How to Create Successful Nonprofit Fundraising Videos

    Taking Nonprofit Email Marketing a Step Further: 6 Tips

    Taking Nonprofit Email Marketing a Step Further: 6 Tips

    4 Fundraising Delusions That Nonprofits Go Through

    4 Fundraising Delusions That Nonprofits Go Through

    3 Ways You’re Holding Your Campaign Back Without Knowing It

    Transform Your Giving & Engagement With GCSmart Tools

    Transform Your Giving & Engagement With GCSmart Tools

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Management
    Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

    Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

    Nonprofit Law 201 for Journalists – Nonprofit Law Blog

    Nonprofit Law 201 for Journalists – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/3/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/3/23 – Nonprofit Law Blog

    Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

    Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

    Scholarships to NCPGC 30th Annual Planned Giving Conference – Nonprofit Law Blog

    Scholarships to NCPGC 30th Annual Planned Giving Conference – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/24/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/24/23 – Nonprofit Law Blog

    Highlights from the ABA Exempt Organizations Subcommittee Meetings 2/10/23 – Nonprofit Law Blog

    Highlights from the ABA Exempt Organizations Subcommittee Meetings 2/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/17/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/17/23 – Nonprofit Law Blog

    Trending Tags

    • Donald Trump
    • Future of News
    • Climate Change
    • Market Stories
    • Election Results
    • Flat Earth
  • Marketing
    Workaholic and Caretaker: Two Patterns That Make Saying No Hard

    Workaholic and Caretaker: Two Patterns That Make Saying No Hard

    How to Make Your Social Media Updates (Among Other Things) More Relevant

    How to Make Your Social Media Updates (Among Other Things) More Relevant

    Mixed Links: News and Tips for Nonprofit Marketers – March 10, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 10, 2023

    Unlocking the Power of AI for Nonprofit Communications

    Unlocking the Power of AI for Nonprofit Communications

    Why Saying No at Work is Hard for Nonprofit Communicators

    Why Saying No at Work is Hard for Nonprofit Communicators

    Social Media Demographics Nonprofit Communicators Need to Know in 2023

    Social Media Demographics Nonprofit Communicators Need to Know in 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 3, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 3, 2023

    Kivi and Farra Talking Trends

    Kivi and Farra Talking Trends

    Nonprofit Social Media and Newsletter Ideas for March 2023

    Nonprofit Social Media and Newsletter Ideas for March 2023

    Mixed Links: News and Tips for Nonprofit Marketers – February 24, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – February 24, 2023

    Trending Tags

    • Flat Earth
    • Sillicon Valley
    • Mr. Robot
    • MotoGP 2017
    • Golden Globes
    • Future of News
  • Organization & Strategy
  • Resources
No Result
View All Result
Charity Racers
Advertisement
  • Home
  • Charity News
  • Give & Care
    The 5 Best Fundraising Ideas for Your School’s PTA

    The 5 Best Fundraising Ideas for Your School’s PTA

    Lenten Pastoral Notes For Better Engagement

    Lenten Pastoral Notes For Better Engagement

    Appuntamento Evaluation

    Top Fundraising Platforms for Catholic Organizations

    Top Fundraising Platforms for Catholic Organizations

    10 Unique Nonprofit Fundraising Ideas for a Productive 2023

    10 Unique Nonprofit Fundraising Ideas for a Productive 2023

    How to Create Successful Nonprofit Fundraising Videos

    How to Create Successful Nonprofit Fundraising Videos

    Taking Nonprofit Email Marketing a Step Further: 6 Tips

    Taking Nonprofit Email Marketing a Step Further: 6 Tips

    4 Fundraising Delusions That Nonprofits Go Through

    4 Fundraising Delusions That Nonprofits Go Through

    3 Ways You’re Holding Your Campaign Back Without Knowing It

    Transform Your Giving & Engagement With GCSmart Tools

    Transform Your Giving & Engagement With GCSmart Tools

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Management
    Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

    Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/17/23 – Nonprofit Law Blog

    Nonprofit Law 201 for Journalists – Nonprofit Law Blog

    Nonprofit Law 201 for Journalists – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/3/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 3/3/23 – Nonprofit Law Blog

    Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

    Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

    Scholarships to NCPGC 30th Annual Planned Giving Conference – Nonprofit Law Blog

    Scholarships to NCPGC 30th Annual Planned Giving Conference – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/24/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/24/23 – Nonprofit Law Blog

    Highlights from the ABA Exempt Organizations Subcommittee Meetings 2/10/23 – Nonprofit Law Blog

    Highlights from the ABA Exempt Organizations Subcommittee Meetings 2/10/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/17/23 – Nonprofit Law Blog

    Nonprofit Tweets of the Week – 2/17/23 – Nonprofit Law Blog

    Trending Tags

    • Donald Trump
    • Future of News
    • Climate Change
    • Market Stories
    • Election Results
    • Flat Earth
  • Marketing
    Workaholic and Caretaker: Two Patterns That Make Saying No Hard

    Workaholic and Caretaker: Two Patterns That Make Saying No Hard

    How to Make Your Social Media Updates (Among Other Things) More Relevant

    How to Make Your Social Media Updates (Among Other Things) More Relevant

    Mixed Links: News and Tips for Nonprofit Marketers – March 10, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 10, 2023

    Unlocking the Power of AI for Nonprofit Communications

    Unlocking the Power of AI for Nonprofit Communications

    Why Saying No at Work is Hard for Nonprofit Communicators

    Why Saying No at Work is Hard for Nonprofit Communicators

    Social Media Demographics Nonprofit Communicators Need to Know in 2023

    Social Media Demographics Nonprofit Communicators Need to Know in 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 3, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – March 3, 2023

    Kivi and Farra Talking Trends

    Kivi and Farra Talking Trends

    Nonprofit Social Media and Newsletter Ideas for March 2023

    Nonprofit Social Media and Newsletter Ideas for March 2023

    Mixed Links: News and Tips for Nonprofit Marketers – February 24, 2023

    Mixed Links: News and Tips for Nonprofit Marketers – February 24, 2023

    Trending Tags

    • Flat Earth
    • Sillicon Valley
    • Mr. Robot
    • MotoGP 2017
    • Golden Globes
    • Future of News
  • Organization & Strategy
  • Resources
No Result
View All Result
Charity Racers
No Result
View All Result
Advertisement Advertisement Advertisement
Home Management

Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog

by brookridgearcadia
March 3, 2023
in Management
0
Is Fiscal Sponsorship a Service Provided for a Fee? Why it isn’t and why it matters. – Nonprofit Law Blog
491
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter
ADVERTISEMENT


"Sponsoring" on a laptop screen with the symbol for Sections against a white background

By Erin Bradrick and Josh Sattely

Fiscal sponsorship is a growing part of the nonprofit sector and, when done properly, is an important and impactful tool for furthering public benefitting work and activities. However, because fiscal sponsorship is not a relationship that is explicitly defined anywhere in the law or Internal Revenue Code and is instead most often defined in a written contract, we see fiscal sponsors using a wide range of words and phrases to refer to what are essentially the same things. For example, comprehensive (or Model A) fiscal sponsors might refer to the projects they sponsor as “affiliates”, “partners”, “allies”, “projects”, or “clients”. As the field of fiscal sponsorship continues to grow and to attract additional attention from charity regulators and other governmental agencies, we believe there’s a strong case for developing a common vocabulary of key fiscal sponsorship terms, starting with how we refer to the amounts that fiscal sponsors allocate to cover their operating expenses. We won’t provide an overview of the basics of fiscal sponsorship here, but you can find more information here, here, and here.

Regardless of the model of fiscal sponsorship offered, fiscal sponsors of course incur costs and expenses in offering fiscal sponsorship, including in the form of staff time, administrative support, bookkeeping and accounting, reporting and other compliance, insurance, and other areas of overhead. In order to cover such costs, many fiscal sponsors allocate a portion of the funds received for the purposes of a sponsored project (often a specified percentage) to support shared operations costs. While this amount is commonly referred to as a “fiscal sponsorship fee”, we would like to encourage fiscal sponsors to instead consider referring to it as a “cost sharing”. Hear us out.

We (Erin on behalf of the NEO Law Group and Josh for Social Impact Commons) had the privilege of attending the 2022 National Network of Fiscal Sponsors’ conference in sunny San Diego. In addition to great peer learning and networking, we had a chance to talk vocabulary and found that many fiscal sponsors are still referring – in their fiscal sponsorship agreements, on their websites, and in conversations – to the groups they sponsor as their “clients” that are charged a “fee for services”, while others had shifted to referring to “projects” and “cost allocations”. Fundamentally, what’s being provided by fiscal sponsors and how it is paid for is the same within the various models of fiscal sponsorship, so why the different language? You may think this a question of semantics only of interest to academics and overly caffeinated exempt law attorneys, but there are real implications and potential consequences for how these relationships and cost structures are characterized.

The language used to describe how a fiscal sponsor organization covers its indirect and overhead costs is important, and we encourage sponsors to move away from the “fee for service” characterization for three primary reasons:

  1. It’s not legally accurate. At a basic level, comprehensive (or Model A) fiscal sponsorship is simply a nonprofit carrying out charitable programs. It’s how the programs are carried out – namely by pushing as much managerial and strategic decision making as possible to the program level and having an agreement memorialize the relationship that generally gives a third-party the right to request a spin out of the project – that makes it fiscal sponsorship. Just as a nonprofit would not call an internal program a “client” and charge it a “fee”, neither is it appropriate to frame Model A relationships in that manner. Likewise, pre-approved grant relationship (or Model C) fiscal sponsorship is essentially a grantor-grantee relationship. You don’t see foundations referencing a “fee” they charge to engage in grantmaking and neither should fiscal sponsors. In either model, there’s rarely, if ever, a third-party paying the fiscal sponsor a “fee” for fiscal sponsorship services – rather, the fiscal sponsor is receiving purpose-restricted funds and using a portion to contribute towards covering its general administrative and operating expenses. 
  1. Language signals values and intentions. For fiscal sponsors striving to build deep relationships steeped in trust and reciprocity, referring to sponsored projects as “clients” and charging them a “fee” is not only inaccurate from a legal standpoint, it may send signals that counter the messages and intentions a fiscal sponsor is otherwise working so hard to cultivate. Given that fiscal sponsors exercise ultimate oversight responsibility over the activities and use of funds of the organization, including by sponsored projects, when a fiscal sponsor chooses to use “fees” and “services” language, it runs the risk of setting inaccurate expectations about the nature of fiscal sponsorship and the degree of control that the fiscal sponsor is required to maintain and exercise. In our experience, a lack of clear alignment and understanding between fiscal sponsors and projects about what fiscal sponsorship is and what it isn’t is often a significant contributing factor when problems arise in these relationships.
  1. Protecting fiscal sponsorship practitioners and the field calls for accurate messaging. As discussed, referring to sponsored projects paying “fees” implies that fiscal sponsors are providing services to third-parties, which is not accurate. Giving that impression to regulators or the general public perpetuates the inaccurate notion that fiscal sponsorship is a conduit or a “charity-for-hire” mechanism, rather than highlighting the central oversight and support functions that fiscal sponsors play in carrying out compliant and impactful charitable work. Appropriate characterization of the relationship and cost structure protects the organization and helps advance the field.

As the field continues to grow and evolve, consistent use of legally accurate and values-aligned framing will help funders, regulatory agencies, and groups seeking fiscal sponsorship better understand the true nature of these relationships. It may also give staff at fiscal sponsors a grounded understanding of how they contribute. 

For this post, we do not offer a single alternative term to express how administrative costs are shared withing fiscal sponsor organization, but examples we’ve seen include “administrative cost allocation”, “overhead cost share”, and “member contribution”. A future post led by our partners in the nonprofit finance and accountancy realm will go deeper into accounting considerations which may inform both what you call and how you report on how these funds flow. But for today, our takeaway message is, if you are a fiscal sponsor, please consider the implications of what language you use to describe your relationships and cost recovery structure. Happy sponsoring!

Related



Source link

Share196Tweet123Share49
brookridgearcadia

brookridgearcadia

  • Trending
  • Comments
  • Latest
New Members Elected to CalNonprofits Board

New Members Elected to CalNonprofits Board

Update on Sick Leave Relief for Nonprofits

Update on Sick Leave Relief for Nonprofits

Check out these upcoming events

Check out these upcoming events

The Three Layers of A Person and Your Fundraising Story – Agitator

The Three Layers of A Person and Your Fundraising Story – Agitator

March 20, 2023
Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

Engaging Millennials and Gen Z by ChatGPT – Nonprofit Law Blog

March 18, 2023
The 5 Best Fundraising Ideas for Your School’s PTA

The 5 Best Fundraising Ideas for Your School’s PTA

March 18, 2023

Advertisment

Charity Racers

Copyright © 2020 Crarity Racers All Rights Reserved

Navigate Site

  • Home
  • About
  • Disclosure
  • Terms of Use
  • Privacy & Policy
  • Advertise
  • Contact

Follow Us

No Result
View All Result
  • Home
  • Charity News
  • Give & Care
  • Organization & Strategy
  • Marketing
  • Management
  • Resources

Copyright © 2020 Crarity Racers All Rights Reserved

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT