Following are frequently asked questions about fiscal sponsorship.
DISCLAIMER: Thie following should be considered general information rather than specific tax advice. We recommend you consult a tax specialist or accountant with any questions about your situation.
What is a fiscal sponsor?
A fiscal sponsor is a 501(c)(3) organization that agrees to accept and be responsible for grant monies and tax deductible donations on your behalf. Boulder County Arts Alliance is a fiscal sponsor.
Why would I want to apply for fiscal sponsorship?
To offer prospective donors a tax deductible option and qualify for some grants requiring 501(c)(3) status. In effect, you or your organization operates as a 501(c)(3) without having to submit the application for the 501(c)(3) or meet the IRS requirement.
Who may serve as a fiscal sponsor?
An IRS approved 501(c)(3) organization. In Boulder County, the Boulder County Arts Alliance acts as a fiscal sponsor for approved individuals and art organizations.
How do I apply for fiscal sponsorship?
What are the responsibilities of the fiscal sponsor?
The fiscal sponsor is responsible for receiving and safeguarding your grant funds. Furthermore, the fiscal sponsor is legally obligated to:
maintain separate records of disbursements related to your organization
keep receipts for at least three years following receipt of the grant
make financial records available to the foundations upon request
disburse funds in accordance with the purpose of the grant application
Are there any disadvantages to designating a fiscal sponsor?
You will not have direct control over the funds. BCAA, as your fiscal sponsor, will deposit your grant funds and donations and disburse your funds.
It will be your responsibility to follow up with the appropriate representative of the fiscal sponsor organization to understand the requirements to maintain your fiscal agency status.
You will be responsible for submitting grants to your fiscal sponsor (BCAA) two weeks prior to the submission date.
Must I appoint a fiscal sponsor before applying for grants?
You must designate the fiscal sponsor at the time of your original grant application. In general, foundations will not consider requests to appoint a fiscal sponsor after an award has been made.
Where can I learn more about fiscal sponsorship?