Basics of Fiscal Sponsorship

1. What is fiscal sponsorship?
Fiscal sponsorship is a formal relationship where a 501(c)(3) public charity, like Community Shares of Mid Ohio through In(form)ed, agrees to sponsor a community project that does not have its own tax-exempt status. This allows the project to operate under our tax-exempt umbrella so it can receive grants, tax-deductible donations, and other contributions.

2. How is fiscal sponsorship different from starting my own nonprofit?
Starting a nonprofit requires forming a new organization, registering with the state and the IRS, waiting months for approvals, and paying multiple filing fees. Fiscal sponsorship lets you begin fundraising and offering programs much sooner by working under our existing 501(c)(3) status, while we handle key legal, financial, and administrative responsibilities.

3. Who is eligible for fiscal sponsorship through In(form)ed and Community Shares of Mid Ohio?
Fiscal sponsorship is available to community-driven projects whose work aligns with Community Shares of Mid Ohio’s issue areas. Model A is reserved for projects focused on fundraising programs that support other nonprofits. Model C is open to a broader range of community projects that fit Community Shares’ mission and values.

4. Why would a community project choose fiscal sponsorship instead of forming a 501(c)(3) right away?
Fiscal sponsorship reduces startup time and cost, and lets you focus on your mission rather than paperwork. It is especially helpful if you want to:

• Test a new idea or proof of concept

• Start programs while registrations are still pending

• Avoid or delay the costs and complexity of forming a standalone nonprofit

5. Is fiscal sponsorship a temporary arrangement, or can it be long-term?
It can be either. Model C is typically tied to a specific grant and ends when the grant is complete. Model A is an ongoing relationship with annual renewal and can support your project over a longer period, as long as it continues to align with Community Shares’ mission and policies.

Legal and Financial Structure

6. What does it mean to operate under Community Shares’ 501(c)(3) status?
Your project does not become its own legal nonprofit. Instead, it operates as a project or program under Community Shares’ tax-exempt umbrella. Community Shares is ultimately responsible for ensuring that funds are used for charitable purposes and that all legal and financial requirements are met.

7. What kinds of contributions can fiscally sponsored projects receive?
Depending on the model, fiscally sponsored projects can receive:

• Grants from foundations and other funders

• Tax-deductible donations from individuals

• Corporate contributions and sponsorships

• Other charitable gifts processed through Community Shares

8. Who is legally responsible for funds received under fiscal sponsorship?
Community Shares of Mid Ohio is the legal recipient and steward of all funds under fiscal sponsorship. We ensure funds are managed, disbursed, and reported in accordance with nonprofit law, our internal policies, and any grant or donor requirements.

9. How are funds held, tracked, and reported for my project?
Funds for your project are held in a dedicated account within Community Shares’ accounting system. We track income and expenses specific to your project and provide regular financial reporting so you can monitor your budget and make informed decisions.

10. Does my project need its own bank account or EIN?
In most cases, no. Under fiscal sponsorship, contributions are received and managed through Community Shares. Your project may or may not choose to obtain its own EIN for other purposes, but all sponsored funds must flow through Community Shares’ financial systems.

Costs and Fees

11. What is the administrative fee, and what does it cover?
In(form)ed charges a 10% administrative fee on all revenue to your project for both Model A and Model C. This fee supports the legal, financial, and administrative infrastructure that makes fiscal sponsorship possible, including accounting, compliance, reporting, and staff time.

12. Are there any additional costs beyond the 10% administrative fee?
There may be project-specific costs, such as insurance premiums, specialized legal services, or payment processing fees, depending on your activities and chosen model. These are discussed during the application and agreement process so there are no surprises.

13. How and when is the administrative fee deducted?
The 10% fee is typically deducted from each contribution or revenue source as it is received. Details are outlined in your fiscal sponsorship agreement.

Model A vs. Model C

14. What is the difference between Model A and Model C fiscal sponsorship?

• Model C is project-specific and usually tied to a single grant. Your project maintains its own legal compliance (such as registrations and insurance), while In(form)ed receives and manages the grant funds and provides financial reporting.

• Model A is more comprehensive. Your project functions like a department or program of Community Shares through In(form)ed. We provide broader administrative support, including insurance, accounts payable and receivable, donations, grants, and compliance.

15. How do I know whether Model A or Model C is right for my project?
Model C may be a good fit if you:

• Have a specific grant opportunity

• Can manage your own legal registrations and insurance

• Need a fiscal sponsor mainly to receive and manage a grant

Model A may be a better fit if you:

• Envision ongoing programming and fundraising

• Want deeper administrative support

• Focus on fundraising programs that support other nonprofits

Our team can help you decide which model is appropriate during an initial conversation or by using our Fiscal Sponsorship Quiz.

16. Can I switch between Model C and Model A later?
In some cases, projects may transition between models as they grow or as their needs change. Any change would require review and approval by In(form)ed and Community Shares, and a new or amended agreement.

17. Under Model C, who is responsible for legal compliance?
Model C projects are responsible for their own legal compliance, such as business registrations, insurance, and any other required filings. In(form)ed’s role is to ensure that grant funds are managed correctly and that financial reporting to the funder is accurate.

18. What additional support does In(form)ed provide under Model A?
Under Model A, In(form)ed provides more comprehensive support, which may include:

• Insurance coverage (as outlined in your agreement)

• Accounts payable and receivable

• Donation and grant processing

• Financial tracking and reporting

• Oversight of compliance with nonprofit and grant requirements

19. What kinds of fundraising are allowed under each model?

• Model C is focused on the specific sponsored grant, though other activities may be considered on a case-by-case basis.
• Model A allows a broader range of fundraising, such as grants, individual giving, corporate giving, sponsorships, and more, as long as they align with Community Shares’ mission and policies.

20. How long does Model C fiscal sponsorship last?
Model C sponsorship typically lasts for the duration of the sponsored grant. Once the grant period ends and all reporting and obligations are fulfilled, the fiscal sponsorship relationship for that grant concludes.

21. Is Model A an ongoing relationship, and how is it renewed?
Yes. Model A sponsorship is generally an ongoing relationship with an annual review. The agreement is renewed each year based on alignment with Community Shares’ mission, performance, and mutual interest in continuing the partnership.