For over twenty years, POISE has provided Fiscal Sponsorship Services to individuals, groups and organizations offering programs that are in line with our mission. Since 2008, the Foundation has served as fiscal sponsor for over 20 organizations and programs, enabling more than $1,000,000 in direct programming to the community.
What is Fiscal Sponsorship?
Most commonly, Fiscal Sponsorship is necessary when a person or group (The Partner) wants to provide a charitable program (The Program) and fund it with tax-deductible contributions. But, The Partner but does not have an Internal Revenue Service (IRS) 501(c)(3) tax exemption status to allow the contributions to be designated as tax-deductible. An existing 501(c)(3) organization acts as the sponsor of The Program, collecting contributions to support the program, then disbursing the funds to pay valid, program-related expenses. The sponsor will also provide financial reports, as well as acknowledgement letters for all charitable contributions. The IRS has strict policies regarding fiscal sponsor relationships, generally requiring the sponsor to maintain complete discretion and control over the funds. The sponsor is also legally responsible to ensure that use of funds aligns with its mission and furthers its purpose.
What types of Fiscal Sponsorship Services does POISE offer?
Once The Program is deemed in line with its mission and the Foundation agrees to provide Fiscal Sponsorship Service, POISE employs four Fiscal Sponsorship models to meet The Partner’s needs:
Comprehensive Fiscal Sponsor (Model A)
This service is provided to an individual or group that is not part of a separate legal business entity, who is initially not concerned with owning The Program’s resulting work products. The Program becomes a POISE-owned program. Any Program personnel become employees and/or volunteers of POISE. All fundraising is done in POISE’s name and its Board has control over the use of funds. All assets, contributions and liabilities belong to POISE and are reported solely within the Foundation’s financial statements. This model is often best suited for projects in an “incubator” stage, as The Partner grows funding, programming and recognition of the program; while reducing The Partner’s liability and limiting IRS challenges of tax-exempt designations of donations. A board resolution may be adopted during the agreement process to address potential or eventual separation of The Program from POISE.
Independent Contractor (Model B)
In this model, The Partner is a separate, legal entity. Ownership of The Program, including work-product and other assets can belong to POISE, The Partner, or both parties however; POISE maintains control over the project. Actual operations of The Program are contracted out to The Partner for execution. All fundraising is done in POISE’s name, contributions belong to POISE and POISE reports funds as contributions in and expenses out. Typically, a Form 1099 will be issued to The Partner to report funds disbursed during the year, for inclusion on The Partner’s tax return. Depending on ownership agreements and the nature of The Program, The Partner may be liable for The Program, and may be required to carry liability insurance, listing POISE Foundation as a named insured.
Pre-Approved Grant Relationship (Model C)
The Partner is a separate, legal, non-profit entity. The Partner maintains ownership of The Program, although POISE retains discretion and control over the use of funds. The Partner goes through a formal grant request process, through which POISE’s Distribution Committee evaluates The Program’s grant proposal. Once approved, funds are only provided up to the amount of funds received for The Program, at agreed intervals. Often, The Partner has potential funding sources identified. Charitable contributions go to POISE, who reports funds as contributions in and grants out. The Partner reports grants or income in and expenses out. Program personnel work for The Partner, who maintains total liability for The Program.
Technical Assistance (Model D)
The Partner has its own 501(c)(3) but needs help with financial management, including bookkeeping, tax returns, and other administrative tasks that may be beyond The Partner’s internal capacity or skills. The Partner maintains ownership of The Program and all funds are raised in The Partner’s name. Fees for these services are typically less than those available through for-profit service providers, to meet IRS’ requirements.
How does The Partner apply for Fiscal Sponsorship Services?
The Partner must submit the POISE Foundation Fiscal Sponsorship Services Letter of Inquiry, which provides an executive summary and a detailed budget of The Program. POISE will hold a meeting with The Partner to discuss The Program and gather any additional information necessary to determine if The Program is eligible for services. If The Program is deemed eligible for services, POISE will determine which service model best fits the sponsorship needs and request additional information for further consideration. This includes a detailed narrative of The Program, financial information, a list of prospective funders, as well as organizational information.
A draft Fiscal Sponsorship Agreement will be forwarded to The Partner for consideration and for edits. Once all language is agreed, a final agreement document will be forwarded to The Partner for signature. Once the agreement is signed by both parties, Fiscal Sponsorship Services will begin.
What are POISE’s Fiscal Sponsorship Fees?
Fees for the program vary and depend on the Model chosen and services provided by POISE. Typically, standard Fiscal Sponsorship Fees range from 3% to 10% of all contributions received. Additionally, direct program expenses are charged as incurred.
For more information on POISE Foundation’s Fiscal Sponsorship Services, contact Shirrell Burton, Director of Development, at 412-281-4967 or