02 Aug Just Starting Out? Consider a Fiscal Sponsor
Founders of new nonprofit projects or tiny baby nonprofit gleams in the eye may not realize they can wait to start their own formal legal organization with its own Board by getting a fiscal sponsor.
The fiscal sponsor relationship is an important one to keep squeaky-clean, open and honest, like the stable, long-term relationship with donors we wrote about in our last post. It can also be a huge time-savings and allow founders time to organize well, and organize lasting, caring Boards of Directors that will provide a stable base for years to come.
I’ve written before about my friend Carol Cantwell’s brilliant niche as a social-justice financial advisor and clarifier to nonprofits. Her organization is Fun with Financials, and with Carol, it really is fun to be financial, not just funded. (Everyone knows it’s fun to be funded; Carol helps you find the fun in financial intelligence.)
Fun with Financials blog post series on fiscal sponsorship
Here’s an excerpt from a recent post in Fun with Financials’ series on fiscal sponsorship from both sides of the equation (the sponsee’s side, as well as the sponsor’s side):
posted on Wed, May 23 2012 11:45 am by Carol
Often I hear comments about the financial cost (service fees) of being a fiscally sponsored project. I hear organizations say that they could do the work more cheaply themselves. That they could save money by keeping all of the accounting and compliance work in-house. I hate to burst your bubble but for the overwhelming majority of organizations it’s simply not true…
Removing your fiscal sponsor doesn’t mean you pocket the service fee. Instead, you’ll now be spending your staff time and money hiring lawyers and accountants and doing audits and complying with all the laws and regulations that your fiscal sponsor used to handle for you….
Carol’s website also offers an important stand-alone resource, a list of FAQs you should ask of any fiscal sponsor you’re considering.
Please share with us your thoughts and experiences as a fiscally sponsored project or as a fiscal sponsor. What works? What doesn’t? What do you hate? What do you love?
And thank you fiscal sponsors for taking care of the accounting and compliance work for the organizations that need to go out and raise hell!
If being a fiscal sponsor appeals to you, stay tuned for next week’s blog that will provide you with tips about what you need to do to prepare for a new life as a fiscal sponsor.