What Is Fiscal Sponsorship?

The Harlem Film House’s Fiscal Sponsorship Program provides filmmakers a way to raise funds for film projects under a 501(c)(3) through donations.

Please read the FAQ’s below for a full understanding of what a Fiscal Sponsorship entails and your responsibility. ***article transferred from IOBY

Q: What is fiscal sponsorship?

The experts at Foundation Center’s GrantSpace offer this concise working definition:

“Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack exempt status. This alternative to starting your own nonprofit allows you to seek grants and solicit tax-deductible donations under your sponsor’s exempt status.”

Q: What exactly does a fiscal sponsor do?

Typically, a fiscal sponsor:

  • Allows donors to make tax-exempt contributions to the charitable activities of individuals or unincorporated groups by extending its tax-exempt status to them
  • Receives and administers donations on behalf of the sponsored people or organization
  • Sponsors projects with a charitable purpose that are consistent with its own mission
  • Accepts significant legal and financial risk—so it is important that sponsoring organizations are well-informed and structured to manage these risks, and that unincorporated people and organizations seek experienced sponsors
  • Charges an administrative fee for its services—usually a percentage of the budget of the sponsored organization or project

Q: How can fiscal sponsorship help me?

A: With fiscal sponsorship, your unincorporated community group will be able to:

  • Receive tax-deductible contributions from donors
  • Get started faster, without having to apply and wait for nonprofit status
  • Benefit from the name recognition of your reputable nonprofit sponsor

Additionally, some sponsors offer what’s called comprehensive fiscal sponsorship. In this model, community groups may also:

  • Receive technical assistance and administrative support, potentially including payroll and accounting services, office space, publicity, and capacity building
  • Save on insurance costs (often, sponsors can obtain lower insurance rates than individuals and unincorporated groups, then they pass these savings on)

Q: Does it cost anything?

A: Like most fiscal sponsors, Harlem Film House retains a small percentage of the money you raise to help cover our administrative costs of managing the funds. We’ve kept our fee to 5%—much lower than most—in an effort to best support your community-based work.

Q: What if I got a grant and need a fiscal sponsor to receive it?

We can help with that, too! If you receive a grant during the course of your campaign, we can accept it on your behalf and apply it toward your total fundraising goal online. The amount disbursed to you at the end of your campaign would be the total of any grant funds plus all the online donations you’ve raised, and the Harlem Film House’s 5% fiscal sponsorship fee would apply to that total.

Looking learn more about fiscal sponsorship? Here’s some deeper-dive reading on fiscal sponsorship-related topics:

– GrantSpace’s comprehensive video What You Need to Know About Fiscal Sponsorships