1. Copyright 2010, Adler & Colvin 1 Fiscal Sponsorship Doing it Right Greg Colvin Adler & Colvin San Francisco, California

2. Copyright 2010, Adler & Colvin2 What is Fiscal Sponsorship? An arrangement between a 501(c)(3) public charity and a project in which, typically, the charity receives and expends funds to advance the project while retaining discretion and control over the funds. An arrangement between a 501(c)(3) public charity and a project in which, typically, the charity receives and expends funds to advance the project while retaining discretion and control over the funds.

3. Copyright 2010, Adler & Colvin3 Not Fiscal Agency Fiscal Agency – Wrong Term Fiscal Agency – Wrong Term charity is not agent to receive project $ Fiscal Sponsorship – Preferred Term Fiscal Sponsorship – Preferred Term charity directs, controls project $ charity directs, controls project $

4. Copyright 2010, Adler & Colvin4 Two Main Ways to Do It Right Direct Project Model (A) Direct Project Model (A) * Independent Contractor is Model B Pre-Approved Grant Model (C) Pre-Approved Grant Model (C)

5. Copyright 2010, Adler & Colvin5

6. 6

7. 7 Direct Project, Model A 1. Project belongs to sponsor 2. Project is not a separate legal entity 3. Project personnel are employees / volunteers 4. Contributions belong to sponsor

8. Copyright 2010, Adler & Colvin8 Direct Project, Model A 5. Sponsor is liable for everything 6. Sponsor reports revenue and expenses 7. Sponsor OWNS project 8. Project may have advisory committee

9. Copyright 2010, Adler & Colvin9 Legal Steps Project director or advisory committee establishes a contract with sponsor. Project director or advisory committee establishes a contract with sponsor. Sponsors board has already approved a sponsorship program or approves now. Sponsors board has already approved a sponsorship program or approves now. Fundraising done in name of sponsor. Fundraising done in name of sponsor. Sponsor receives grants, donations into project fund account, pays costs directly. Sponsor receives grants, donations into project fund account, pays costs directly.

10. Copyright 2010, Adler & Colvin10 Pre-Approved Grant, Model C 1. Project belongs to grantee 2. Project is in a separate legal entity 3. Project personnel work for grantee 4. Charitable contributions go to sponsor first

11. Copyright 2010, Adler & Colvin11 Pre-Approved Grant, Model C 5. Grantee is liable for project 6. Sponsor reports contributions in and grants out 7. Grantee reports grant in and expenses out 8. Sponsor retains variance power (discretion and control) over funds

12. Copyright 2010, Adler & Colvin12 Pre-Approved Grant – 7 Steps 1. Written grant proposal from project 2. Sponsor evaluation of proposal 3. Sponsor Board approval 4. Written grant agreement 5. Proper solicitation of funds 6. Proper accounting for funds 7. Reports from grantee to sponsor

13. Copyright 2010, Adler & Colvin13

14. Copyright 2010, Adler & Colvin14 How Could Anything Go Wrong?

15. Copyright 2010, Adler & Colvin15 Problems Common to Both Models 1. Sponsor is absent, or We are just using their 501(c)(3) We are just using their 501(c)(3) 2. No written agreement 3. Confusion with DAF or other programs 4. Sponsor mischaracterizes relationship 5. Donor confusion about recipient

16. Copyright 2010, Adler & Colvin16 Direct Project Problems 1. Sponsor fails to plan for liability 2. No pre-nuptial agreement Dealing with the break-up Dealing with the break-up 3. Ownership of intellectual property 4. Project spends more than it has 5. Organizing an advisory committee 6. Treatment of employees

17. Copyright 2010, Adler & Colvin17 Pre-Approved Grant Problems 1. Failure to pre-approve the grant relationship 2. Grantee fails to report income 3. Ownership of intellectual property 4. Grantee fails to report back to sponsor 5. Sponsor pays grantees bills directly 6. Lack of professional grants management

18. Copyright 2010, Adler & Colvin18 Resources Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition www.fiscalsponsorship.com www.fiscalsponsorship.com www.fiscalsponsorship.com www.fiscalsponsordirectory.org www.fiscalsponsordirectory.org www.fiscalsponsordirectory.org National Network of Fiscal Sponsors: National Network of Fiscal Sponsors: www.tides.org/community/networks- partners/nnfs/ www.tides.org/community/networks- partners/nnfs/