Fiscal sponsorship is a widely used concept, yet its definition remains varied and sometimes ambiguous due to the absence of a singular legal definition. It encompasses a range of scenarios, each with its own legal and operational implications.

In essence, fiscal sponsorship often involves a collaboration between a 501(c)(3) charity and another entity, allowing tax-deductible contributions to support a charitable project initiated by the sponsoring party. Two common models, known as Model A and Model C, outline different arrangements for managing these projects.

In Model A, the individual seeking sponsorship essentially becomes an employee or volunteer of the sponsoring charity. This arrangement grants the sponsor full authority over the project’s operations and expenditure.

Conversely, Model C involves the individual or entity becoming a grantee of the sponsor, while maintaining distinct project activities. Here, the sponsor manages donations, maintains control over funds, and allocates them to the project’s designated purposes.

In both models, the fiscal sponsor operates under its own charitable objectives, such as community support or arts advocacy. Donations received are earmarked for these broader objectives, with the sponsor exercising discretion in how funds are utilized, either directly or through grants to the project.

While fiscal sponsorship offers administrative support, its legal and tax implications revolve around the sponsor’s charitable mission. Whether operating a project directly (Model A) or facilitating grants (Model C), the sponsor plays a pivotal role in advancing its own charitable endeavors while supporting external projects.

Model "A" Sponsorship

9% Admin Fee (See below for more details)

Monthly
$ 0
  • Model “A” Sponsorship information can be found here: MODEL A
  • An administrative fee of 9% applies to projects with budgets below $500,000.
  • A 8% administrative fee is applied to projects with budgets ranging from $500,000 to $1,000,000.

Model "C" Sponsorship

7% Admin Fee (See below for more details)

Monthly
$ 0
  • Model “C” Sponsorship information can be found here: MODEL C
  • An administrative fee of 7% applies to projects with budgets below $500,000.
  • A 6% administrative fee is applied to projects with budgets ranging from $500,000 to $1,000,000.
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