Organizations eligible to receive grants from the Foundation are generally those determined by the IRS to be public charities (see the eligibility section for more information). Those organizations that do not meet that eligibility criteria may apply with a fiscal sponsor that is a qualifying charitable organization under the circumstances described below.
There are many types of fiscal sponsorship1, however, the most common models are ‘Model A – Direct/Comprehensive’ or a ‘Model C – Pre-Approved Grant Relationship’.
Model A – Direct/Comprehensive Fiscal Sponsorship
In a Model A fiscal sponsorship, the project becomes an internal project/program of the fiscal sponsor. This may sometimes be referred to as a ‘program of’ the sponsor.
Model A Characteristics:
The non-exempt organization has no separate legal existence from the sponsor.
The people conducting the project become employees or volunteers of the sponsor.
The project belongs completely to the sponsor, including funds raised, and the sponsor is legally responsible for the project. Usually, the sponsor includes the financials and/or service details of the program in its annual report or Form 990.
All grant payments must be made directly to the sponsor.
Typically incubated externally and adopted by the sponsor, versus generated organically from within the sponsor.
Requirements:
Model C – Preapproved Grant Relationship
In Model C, the fiscal sponsor and the non-exempt project have more or less the same relationship as a traditional grantor and grantee.
Model C Characteristics:
The sponsor takes in contributions designated for the charitable purposes of the sponsored project, but the project itself is legally separate from the sponsor.
The sponsor periodically disburses grants to the project from a restricted fund.
Common when a group is seeking their own 501(c)(3) status but does not have it yet.
Requirements:
The non-exempt group is organized similar to a 501(c)(3) organization and has an oversight committee or advisory board comprised of more than one individual.
The program or project for which the non-exempt group is seeking funding falls within the charitable purposes of the sponsoring organization/fiscal sponsor, and the two groups have established a fiscal sponsorship relationship prior to being approved by the Foundation for funding.
A signed copy of the Fiscal Sponsorship Agreement Form (or similar documentation) outlining the responsibilities of the fiscal sponsor and sponsored organization must be submitted to the Foundation with the initial grant application or prior to grant approval.
A signed copy of a board resolution is also required. A sample board resolution is provided, and other formats may be accepted, including Board-ratified minutes.
Subsequent requests can refer to this initial submission. A fiscal sponsor agreement shall be in effect for the term indicated within the agreement, unless the agreement substantially changes or is terminated, in which case the fiscal sponsor is responsible for informing the Foundation.
To obtain fiscal sponsorship forms to complete and return, contact grants@cffoxvalley.org