Fiscal Sponsorship

Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity (like Community Shares of Mid Ohio, through In(form)ed) agrees to sponsor a project that lacks its own tax-exempt status. This allows the project to operate under the sponsor's tax-exempt umbrella, making it eligible to receive grants, tax-deductible donations, and other contributions that would typically only go to a recognized nonprofit organization.

It provides a legal and financial structure, enabling community-driven projects and nonprofit startups to focus on their mission while benefiting from the legal compliance, accounting, and administrative oversight of the fiscal sponsor.

Fiscal Sponsorship vs. Nonprofit

When people see an unmet need in their community and want to make a difference, they think they should start a nonprofit. Many people think starting a nonprofit is no different from starting a business; however, a nonprofit differs in its legal status, structure, and reporting requirements.

A nonprofit organization requires a lot of upfront costs and compliance before you even start your programs or fundraising. A new organization must register with the State of Ohio. Then, when registration with Ohio is confirmed, your organization must register with the IRS for tax-exempt status. Each process has a waiting time of months while the registration agency receives and processes your paperwork, in addition to the hundreds or thousands of others they are also receiving. The filings will also require several hundred dollars in filing fees. 

Fiscal sponsorship dramatically reduces your startup time because your program works through an established 501(c)(3) organization. This relationship allows your community project to start fundraising or applying for grants immediately and offer your program to benefit the community. Your fiscal sponsor handles legal compliance, accounting, and administrative oversight. This frees your project to focus on providing your program and serving the community. 

Fiscal sponsorship serves as a great pathway to execute a proof of concept for your program, service, or organization before you invest in registration and filing fees. It also allows your project to offer programs and services while you await the response from your registrations and filings. 

Which Model is Right for Your Project?

In(form)ed through Community Shares of Mid Ohio offers two types of fiscal sponsorship: Model A and Model C. In(form)ed charges a 10% administrative fee on all revenue to your project for either model.

Model C handles sponsorship for an individual grant. This model requires your project to maintain its own legal compliance (registrations, insurance, etc).  In(form)ed will receive the funds for your project’s grant and ensure your project maintains fiscal compliance with the terms of the grant. In(form)ed will also assist your project with all financial reporting required for the grant. Your project will be responsible for program impact reporting for the grant. The fiscal sponsorship ends once the terms of the grant have been fulfilled. 

Model C is available to any community project that aligns with any of Community Shares’ issue areas. 

Model A is more encompassing as your community project acts as a department or subset of Community Shares through In(form)ed. Your program will become more integrated as In(form)ed will handle more of the administrative work of your project, including insurance, accounts payable and receivable, donations, grants, and compliance. This model allows your project to do a wider array of fundraising, including grants, individual giving, corporate giving, sponsorships, and more. The fiscal sponsorship is on an ongoing agreement that can be renewed annually.

Model A is available to community projects that focus on fundraising programs to support other nonprofit organizations. Anything beyond fundraising is at the discretion of Community Shares before a project applies.
 

Are you unsure if your project is a fit for In(form)ed fiscal sponsorship or which model is right for it? Take our quiz to help!

Fiscal Sponsorship Process

Connect with In(form)ed staff to discuss your needs, how Fiscal Sponsorship can support your community project, and if it is the right fit for your community project.

If your community project aligns with In(form)ed, you’ll complete our online form to provide us with information about your project.

Once your application is submitted, it is reviewed by a committee.

The committee sends the application and its recommendation to the Community Shares Board of Trustees for final review and vote.

If accepted, an agreement will be created between your project and In(form)ed.

Contact us to start the process today!