Fiscal Sponsorship | Start a Nonprofit
Fiscal Sponsorship Gives a Leg Up
Many who desire to start a nonprofit enjoy the idea of starting and running a nonprofit but are hesitant that their nonprofit will be successful. There is a lot of work that goes into a nonprofit and the success of the nonprofit depends on their success of raising donors and funding. No money, no organization. So when faced with sinking several thousand dollars or more into a nonprofit many think twice and the dreams of their shiny new nonprofit begin to pale.
Many are reluctant to go through setting up a nonprofit through the IRS until they are positive their nonprofit will be successful. However, this can be like “putting the cart before the horse.” You need the nonprofit in existence for it to be successful, so it is hard to have a successful nonprofit if you are waiting for its success before you set it up through the IRS. That is where fiscal sponsorship helps.
Fiscal sponsorship is a relationship in which one tax exempt nonprofit allows another nonprofit to reside within its organization’s structure. The relationship resembles baby birds nested inside a mothers nest.
Forming an independent nonprofit can be costly and takes several months or even several years to establish. Many that want to start nonprofit work simply do not have the financial resources to get the paperwork and filings complete. In addition, the timing of the nonprofit work may be better suited for launch around an event or crisis that, if the nonprofit is set up months down the road, would hinder its success.
In the “baby bird” example the fiscal sponsor allows the new start-up nonprofit to operate within the safe boundaries of it existing program with the freedom to develop its own mission and projects.
It is the best of both worlds and many never see the need or advantage of going through the long and expensive process of setting up their own independent 501c3. The key to finding a great fiscal sponsor is finding one that has good operating boundaries in place yet gives the nonprofit program the freedom to develop its own successful program. There are a few fiscal sponsors whose whole purpose is to fiscally sponsor nonprofit startups and continue with them throughout their growth and maturity.
Growing Your Nonprofit
Many fiscal sponsors can provide all types of training, counseling, or fund-raising help that will help assure their nonprofit has ongoing success. One such organization which sets up fiscal sponsorships and then provides information, training and even video how-to’s is Ocean Grand www.oceangrand.org . Not only is it important to Ocean Grand to get an organization easily set up with nonprofit fiscal sponsorship, they provide ongoing, hands-on support and a plethora of information to help a nonprofit continue to be successful.
Many who do nonprofit work simply do not have the time, resources, or interest to take on the responsibilities of bookkeeping, accounting, and administration. With limited personnel available and the creation of a new program, many nonprofits welcome all the administration help a fiscal sponsor can offer.
Learning all the ins and outs of running a nonprofit as well as finding donors, staying within the IRS guidelines and having fun while doing it is where Ocean Grand comes to the rescue. A fiscal sponsor can, if they are willing, provide you all types of support and training. It is worth it to spend the time to find a fiscal sponsor who will get in the trenches with you and give you the training you will need to be a success.
Do We Ever Need an Independent 501c3?
Many times it is never necessary to separate from your fiscal sponsor. If your fiscal sponsor supplies you everything you need including administration, training, support and freedom to develop you program there is really never a reason to create an independent 501c3. Sure there may be an administration fee that you pay on a monthly or yearly basis but many times the fee is much less than actually hiring staff or accountants to accomplish the tasks the administration fee covers. Avoiding the hassle of administration for your nonprofit is many times well worth the fee the fiscal sponsor charges. Even if you had staff that could cover some of the administration roles your nonprofit might be better off using those man hours to develop your programs projects rather than sitting behind a desk.
By staying with a fiscal sponsor you can:
- Spend more time on your program
- Know that there is a team of experts handling administration and tax issues
- Get expert help when you need it
- Have better success in getting grants because of your association with a successful nonprofit
Conclusion
In conclusion, there are is a lengthy list of advantages to starting and maintaining a nonprofit through fiscal sponsorship. Finding the right fiscal sponsor is important and programs like Ocean Grand can add huge value to an already existing program. If your considering starting a nonprofit then fiscal sponsorship is something you should seriously look into.
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