As each new YNPN chapter emerges to develop programs and resources for the next generation of nonprofit leaders, they are inevitably faced with the decision of whether or not to incorporate formally as a nonprofit. Nonprofit incorporation can require a good deal of time and legal advice; while this may be a viable option for your chapter learning about other models will help chapters make well-informed decisions. Fiscal sponsorship is a useful alternative to nonprofit incorporation that has strong benefits as well as its challenges for YNPN chapters Its collaborative approach is one that may fit the philosophy of your chapter as well as helping to save time to serve your chapter’s programs. In this session Emily Davis will explain what fiscal sponsorship is, the pros and cons to fiscal sponsorship as well as elements of a fiscal sponsorship agreement. Learn from her experience in setting up fiscal sponsorship with two YNPN chapters – Denver and San Diego – as well as perspectives from other fiscally sponsored chapters. Fiscal Sponsorship: An Alternative to Nonprofit Incorporation is useful for any chapter including those with nonprofit incorporation status or those looking into the options for the first time. Join us on Wednesday November 3 at 5:00 p.m. pacific time for this discussion.

1. Fiscal Sponsorship:
An Alternative to Nonprofit
Incorporation
Wednesday, October 27th, 2010
Emily Davis, MNM, EDA Consulting
YNPN Denver & San Diego

2. Overview
• Introductions
• Experience with fiscal sponsorship
• Desired outcomes

3. What is Fiscal Sponsorship?
“Fiscal sponsors are 501(c)(3) charitable corporations that give unincorporated
groups whose missions are aligned with their own a tax-exempt home.
Although sponsored programs are not completely independent —they are
legally part of the sponsor organization—they nevertheless retain
programmatic autonomy and often have separate advisory boards making
their strategic decisions. They are responsible for their own fund-raising,
and they absorb any shortfall and retain any surplus.”
- Jonathan Spack, Third Sector New England

4. Fiscal Sponsorship Process

5. • Less legal expertise
• Less paperwork (no
incorporation)
• Less administrative work
• Less liability
• Collaborative
• Financially sound
• Saves time

6. Challenges
• Finding a fiscal sponsor
• Less independence
• Advisory Board instead of Board of
Directors
• Subject to FS policies and
procedures
• Monthly fees – back office, financial
processing
• Quality of services

7. Identifying a Fiscal Sponsor
• Mission alignment
• Staff capacity
• Fiscally stable
• Complimentary
organizational culture
• Governance and
operations best practices
• Space availability
• Insurance
• Community credibility
& reputation

8. Finding a Fiscal Agent
• Community Foundations
• Infrastructure Organizations
(Tides Center, CompassPoint,
CRC, NMS)
• Universities/Academic
Institutions
• Hands On Network
• Incubation Nonprofits
(CNDC
• Chambers of Commerce

9. Elements of the Agreement
About YNPN Chapter
Making the Case
Best Practices
Responsibilities
Agreement

10. About YNPN
• Who is YNPN?
• National Mission
Statement
• Chapter History and
Formation
• Organizational
Leadership

11. Making the Case
• Access to YNPN network
• Mission-alignment
• Collaboration & partnership
• Similar community stakeholders
• Mutually-beneficial access to resources
• Minimal oversight
• Access to the next generation of nonprofit
leaders
• Ability to terminate agreement

12. Best Practices
• Policies and procedures
• Financial Management
• Planning
• In-services/Training
• Learning organization
• Evaluation

13. Fiscal Agent
Responsibilities
• Due diligence
• Time commitment &
capacity
• Financial management/
accounting
• Human resources support
• Back office administration

14. Agreement Elements
• Terms of agreement
• Project activities
• Financial management as restricted funds
• Financial responsibilities
• Intellectual property rights
• Expenditure responsibilities
• Fundraising
• Restricted funds management

15. Agreement Elements
Con’t
• Records and reports
• Administrative fees
• Partnership
• Changes in tax status
• Confidentiality
• Termination
• Indemnification
• Arbitration

16. Sponsorship Policies
• Cash advances
• Lobbying
• Grants received
• Loans to projects
• Donations
• Automatic termination of project
• Fundraising activities
• Extra services
• Communications with potential
donors
• YNPN email accounts
• Financial statements
• Administrative fees
• Amendments
• Acknowledgments

17. Sample Agreements
• CompassPoint
• YNPN San Diego
• Minnesota Council of
Nonprofits
• Fiscal Sponsorship
Agreement (Model A)

18. Putting It All Together
• Best practices in financial
management
• “Insurance” with the agreement &
policies
• Recognition of FS
• Best practices in nonprofit
leadership & management

19. “In addition to building the capacities of fledgling groups
and helping them achieve sustainability, fiscal
sponsorship promotes more practical thinking among
everyone in nonprofit world about the viability of
longer-term, shared administrative models.”
- Jonathan Spack, Third Sector New England

20. Resources
• Fiscal Sponsorship: 6 Ways to Do it Right
• Guide to Fiscal Sponsorship
• Fiscal Sponsorship: 6 Ways to Do It Wrong
• Fiscal Sponsorship Template Agreement
• National Network of Fiscal Sponsors
• Getting a Head Start
• Fiscal Sponsor Directory (San Francisco)
• Colorado Nonprofit Development Center (Denver)

21. Questions

22. Thank You
For questions or more
information…
Emily Davis, MNM
www.edaconsulting.org
President, EDA Consulting
www.edaconsultingcafe.blogspot.com
3840 Telluride Place
http://twitter.com/edaconsulting
Boulder, CO 80305
http://www.facebook.com/
edaconsulting
(303) 652-7536
emily@edaconsulting.org