Fiscal Sponsorship

Fiscal sponsorship is a formal arrangement in which a nonprofit organization (the fiscal sponsor) agrees to provide administrative support, legal oversight, and financial management to a project or group that does not have its own tax-exempt status. This enables the sponsored project to receive grants and tax-deductible donations under the sponsor's 501(c)(3) designation, while the sponsor assumes responsibility for ensuring compliance with IRS regulations and proper fund management. Fiscal sponsorship can be a temporary solution for emerging initiatives testing their viability or for projects that do not wish to incorporate as separate nonprofits. It requires clear agreements outlining roles, responsibilities, and reporting structures between the sponsor and the sponsored project.