What is fiscal sponsorship?

Fiscal sponsorship occurs when a charitable venture that does not have tax-exempt status forms a relationship with an existing 501(c)(3) nonprofit organization. The tax-exempt organization, or fiscal sponsor, lends its tax-exempt status, facilitates operations, and enables grants that advance the mission of the charitable venture.

The American Bar Association summed it up nicely “While forming a nonprofit corporation and applying for income tax exemption will be the right choice for some clients, there are often alternatives that may more efficiently and effectively allow a client to achieve his or her charitable goals. Fiscal sponsorship is one such alternative.”

Some look to fiscal sponsorship as an efficient and effective way to start a new nonprofit endeavor. Fiscal sponsorship models can differ in their structure and benefits, and finding the right sponsorship model will help your venture run smoothly.