Nonprofit 911: Is Fiscal Sponsorship Right for You?
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1 Nonprofit 911: Is Fiscal Sponsorship Right for You? With Brad Luckhardt and Jean Paul Warmoes Audio for this event will be available beginning at 1 pm ET via your PC speakers or headphones If you are unable to listen to your PC audio, please close the Audio Broadcast panel and click the Request button below the participant panel to get dial in info.
2 About Network for Good Upcoming Trainings: Nonprofit911.org NetworkForGood.org for Nonprofits DonateNow Now EventsNow Fundraising Fundamentals The Network for Good x1
3 Today s Speakers Brad Luckhardt Jean Paul Warmoes
4 Comprehensive Fiscal Sponsorship Network for Good August 21, 2012
5 Tides For more than 35 years, great ideas have thrived at Tides. We provide sophisticated financial and management services - and inspiration - to donors and doers so they can focus on achieving their vision of a just world.
6 We make making change easier with: Grantmaking Funds: Straightforward, easy to manage alternative to a stand-alone grantmaking foundation. Fiscal Sponsorship: Empowering social entrepreneurs to focus on mission and vision while Tides manages back-office infrastructure. Consulting: Transform your values and ideas into a wellmanaged project or program.
7 Overview of Fiscal Sponsors* 37% of current fiscal sponsors began practicing fiscal sponsorship between % of fiscal sponsors focus on projects working in arts and culture 11% of fiscal sponsors practice the comprehensive model 32% of fiscal sponsors are Community Foundations *Statistics based on 2006 Fiscal Sponsorship Field Scan Full report can be found at resources/publications
8 Characteristics of Community Foundations Community Foundations are least likely to identify as fiscal sponsors Community Foundations see fiscal sponsorship as a vital resource Model utilized by Community Foundation helps keep liability at arms length, protecting the foundation s assets
9 Characteristics and Services of Comprehensive Fiscal Sponsors Projects become fully integrated into fiscal sponsor s organization Fiscal sponsor assumes all liability for project activities Comprehensive fiscal sponsors provide the greatest range of back-office services including: > Accounts payable/receivable >Bookkeeping > Grant administration >Human resources consulting > Payroll >Benefits administration > Liability insurance >Compliance management
10 Characteristics and Services of Pre-Approved Grant Relationship Fiscal Sponsors In a pre-approved grant relationship, the project does not become a part of the fiscal sponsor s legal entity Project is responsible for its own liability and tax-reporting Ownership rights of IP should be addressed in agreement and often are held jointly Pre-approved grant relationship fiscal sponsors services can include: > Accounts payable/receivable >Bookkeeping > Grant administration >Fundraising > Marketing
11 Selecting a Fiscal Sponsor Services: Do they meet the needs of our work? Fee: Is it reasonable and within our budget? Transparency: How do they do their recordkeeping and bookkeeping? HR: What are their policies, do they have good benefits? Governance: What s their system for project governance? Approval: How will they assess our fit? Capacity building: Will they assist our growth and development? Risk management: Will we be covered? Reputable: Do they have a proven track record and financial stability?
12 Resources National Network of Fiscal Sponsors: > > nsorfieldscan.pdf Nationwide Fiscal Sponsor Directory > Legal resources > >
13 Fiscal Sponsorship Opportunities for Foreign Nonprofits Seeking to Raise Funds in the U.S.
14 I. Raising funds in the U.S. - Options for foreign nonprofits. 1. Working without a U.S. legal structure (f.ex. if targeting leading foundations). 2. Setting up your own 501(c)(3) public charity. 3. Identifying a 501(c)(3) willing to act as your fiscal sponsor.
15 II. Fiscal sponsorship vs. Setting up your own 501(c)(3). Advantages of Fiscal sponsorship: No need to incorporate in the U.S. No need for a Board of Directors with formal Board meetings. No need for audited financials or filing tax returns (F990). No challenge relating to the public support test. No expenses for legal counsel, accountants, auditors etc. Fiscal sponsor provides the tax-efficient structure. Fiscal sponsor takes care of all back office operations. Advantages of Setting up your own 501(c)(3): Feeling that you are more in control. Possibility to hire full time staff and rent office space.
16 III. Choosing a Fiscal sponsor. Fit with your geographic and issue focus Track record and collaborations with other nonprofits Reputation and image (in the U.S. and abroad) Knowledge of U.S. regulations + Local expertise and networks Width of services + Quality of interaction with staff Fee structure
17 IV. KBFUS in a nutshell. KBFUS is an American 501(c)(3) public charity that facilitates philanthropic flows from the United States to Europe and Africa. Services for U.S. donors (ind - corp - foundations). Services for European and African non-profits (fiscal sponsorship / American friends funds ). Educational Programs - (incl. Study visit on the American Fundraising Model - NYC). Annual Revenue of about $12 million. Affiliated with the Brussels-based King Baudouin Foundation.
18 V. American friends funds at KBFUS. An American friends fund enables European and African nonprofits to reach out to American donors with a tool that bears their name, and invite them to support their activities through contributions that are tax-deductible for U.S. tax purposes. KBFUS manages 80 American friends funds (ex. Nelson Mandela Foundation, Institut Curie, Karolinska Institutet, the International Commission of Jurists, HIVOS, the Rijksmuseum, the Universities of Brussels, Amsterdam, Utrecht etc).
19 Process: Setting up an American friends fund : due diligence + agreement. Solicitation of contributions. Receipt of contributions and reporting to nonprofit. Making distributions from your American friends fund : grant recommendation, approval by our Board, grant agreement, transfer, reporting by the nonprofit. Fees: One time set up fee ($1,000). Management fee (% of contributions received in a calendar year): - 4% on the first $100K of aggregate contributions; - 2% of aggregate contributions between $100K and $400K; and - 1% of aggregate contributions in excess of $400K.
20 VI. Other resources. For Asian nonprofits: Give2Asia: For Latin American nonprofits: The Resource Foundation:
21 VII. Contact information. In the United States: Jean Paul Warmoes, Executive Secretary, Ellena Fotinatos, Program Associate, King Baudouin Foundation United States (KBFUS) 10 Rockefeller Plaza, 16th Floor - New York - NY Phone (212) , Fax (212) In Brussels, Belgium: Anneke Denecker, anneke@kbfus.org King Baudouin Foundation 21 rue Brederodestraat, 1000 Brussels, Belgium Phone , Fax Visit our website at
22 Questions?
23
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