Fiscal Sponsorships Help Programs Keep Costs Down

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By Darlene M. Siska

A new online tool may help make it easier for groups to work together and avoid the hassle of duplicating financial and administrative services.

The tool is intended to promote so-called fiscal sponsorships. Under such arrangements, a nonprofit organization accepts money donated to a program or group that has not received tax-exempt status from the Internal Revenue Service.

The San Francisco Study Center, which provides publishing, fund-raising, and other services to local groups, last November started the online Fiscal Sponsor Directory to provide matches between charities that are willing to serve as sponsors and projects that need one.

The Schwab Fund for Charitable Giving, in San Francisco, gave $50,000 to create the site.

In the past, fiscal sponsorships were intended to provide an incubation period for fledgling groups or for temporary programs or activities.

But today, says Geoff Link, the San Francisco center's executive director, sponsorships are a way for groups without tax-exempt status to keep their administrative costs low over the long term, comply with relevant government regulations, and collaborate with an organization with a similar mission. The directory includes 146 sponsors in 28 states and the District of Columbia.

Organizations offering to be fiscal sponsors fill out a short online form to join the directory, which community projects can search by state, service category, or keyword.

Focus on Services

In a fiscal sponsorship, the existing charity often provides bookkeeping and pays bills, as well as sometimes handling the administration of insurance and employee benefits, for the groups or programs it sponsors. Some sponsors also provide fund-raising help.

Fiscal sponsors usually charge fees of 5 percent to 10 percent of the money they oversee.

Sponsorships should appeal to supporters of fledgling programs, says Mr. Link: "Even though sponsors take a fee, fiscal sponsorship allows projects to focus on providing services, rather than on back-office stuff."

To view the directory, go to: http://www.fiscalsponsordirectory.org.