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While starting out a  project, it is not possible to get tax exempt status immediately. In such a situation, it requires the help of an organization which has already acquired the status of 501(c)(3) and will act as its fiscal sponsor. The duties of this fiscal sponsor include providing necessary oversight, financial management, and other administrative services to help the project grow. This helps both the organization and the project to benefits from each other and by doing so grow in their respective fields. Following are the duties that are needed to be performed by both the parties when they come into an agreement:

  1. The project has to reveal its donors that it does not carry a tax-exempt status whereas the fiscal sponsor will lend its credible status of 501(c)(3) to the project.
  2. The project maintains relationships with the donors and the sponsor receives the contributions.
  3. The control over the funds lies with the fiscal sponsor and the project has to pay him an administrative fee in return.
  4. The project keeps the records and forwards them to the fiscal sponsor.

Both the units have to maintain enough communication with each other.

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Where to Search for a Fiscal Sponsor?

While starting out, search the following places to get the best possible fiscal sponsorship for your project from a nonprofit:

  1. The first thing to keep in mind is to find the nonprofits whose mission is similar to that of yours. Look for the organizations or even people who already have an affiliation with your company because this way it will become easier for you to take a start. Make a list of all the religious, educational, social, and recreational groups that you already know.
  2. You can even look for one in a Fiscal Sponsor Directory which allows you to search the nonprofits by state, category, or keyword. These profiles carry the complete details about the organization including their requirements, fees, services, and the type of projects supported by them. The site even provides the resources and statistics on fiscal sponsorship.

What Should Your Project be Like?

When you think of pitching your project or idea to the non-profit then do not forget to talk about the following things in your proposal:

  1. Give the reason why you want to start out with this project.
  2. Share your goals, objectives, method, information about your staff, and even your budget.
  3. You must be well aware of how to write a good proposal beforehand.
  4. Tell the nonprofit how your project will help it in advancing towards its mission.
  5. Also, let it know about all the other possible ways in which the nonprofit can benefit from your project.

Once your project gets the green signal from the nonprofit, the process starts with both the entities deriving benefits from each other. It is best to outline the responsibilities and obligations of the agreement by both the parties at the very start so that the functioning of both of them stays smooth.

Want to Go to College?
$3 Billion in Pell Grants are Unclaimed Every Year by Eligible Students

Grant Funding and Assistance
Billions of dollars are now easily available to many Americans