Fiscal sponsorship

Do you have an idea for a charitable project that would benefit our community—or even a project that you’d like to see become a full-fledged 501(c)(3) nonprofit? Maybe you’ve heard that fiscal sponsorship can help you accomplish those goals.

But what exactly is fiscal sponsorship, anyway? And how do you know if it’s right for your project or group? Keep reading for answers to common questions we’re asked about fiscal sponsorship at the Quad Cities Community Foundation.

Fiscal sponsorship is a unique relationship between a nonprofit like the Community Foundation (the fiscal sponsor) and a charitable project or group. In this relationship, the fiscal sponsor receives and manages charitable donations on your behalf, providing limited gift and grant oversight and stewardship so your project can get the resources it needs to reach its goals.

For a group of caring people who want to make a difference, fiscal sponsorship can be a great fit in one of two situations:

1. You’re working on short-term, time-limited project with a clear end point—fundraising for a park or memorial, for example. During that time, fiscal sponsorship helps you access the donations and grants you need for your project.

2. You’re considering or working toward creating a 501(c)(3) nonprofit organization but want to be able to receive dollars for your efforts now, while still you’re pursuing that status. By the time you’re incorporated, you’ve already begun your work!

Entering into fiscal sponsorship doesn’t create a 501(c)(3) nonprofit organization or make your effort part of the Community Foundation, though it does involve opening a fund at the Community Foundation. Projects may use fiscal sponsorship as a stepping stone on the way to official incorporation as a nonprofit or as an alternative to incorporation for short-term goals.

Some donors and funders only give gifts and award grants to organizations with 501(c)(3) status. By partnering with the Community Foundation as your fiscal sponsor, you can receive those gifts and grants before you attain that status—or without ever needing to. Ultimately, this means you can access resources you couldn’t otherwise!  

Whether your project is time-limited or in its early stages, fiscal sponsorship by the Community Foundation can help give donors confidence because they know we will ensure that their dollars are used as intended. In other words, fiscal sponsorship can help extend the Community Foundation’s credibility to your project.

For those hoping to grow into independent 501(c)(3) status, fiscal sponsorship allows you to get started on your mission now, while you’re still working on that process.

As a bonus, fiscal sponsorship provides an easy way for donors to make online gifts for your project, and the Community Foundation takes care of the work of gift receipting for you.  

Fiscal sponsorship is a truly valuable—but relatively specific—relationship.

For example, while the Community Foundation is always there to serve as a trusted ear, bounce around ideas, or offer advice, fiscal sponsorship does not include any official training, capacity building, or technical assistance.

As a fiscal sponsor, the Community Foundation is also not a marketer or fundraiser for your project. We can’t write grant applications for your project, but we will look at them to make sure they comply with what we can accept. And we will make sure your fund is well taken care of and that gifts are properly receipted, but you will still need to handle your own overall accounting for the dollars your group receives from your fund and from other sources, ensuring that you have a place to receive money and tracking your use of it.

Fiscal sponsorship does not make your project part of the Community Foundation. Instead, the Community Foundation acts as a steward of charitable donations and grants for your cause. Fiscal sponsorship does not mean the Community Foundation provides financial resources to your project.  

If you think fiscal sponsorship might be a good fit for you, reach out us at grants@qccommunityfoundation.org or (563) 326-2840 for a conversation.  

Before partnering with the Community Foundation as your fiscal sponsor, you will be asked to submit a fiscal sponsorship application form outlining your goals, plans, budget, leadership, and alignment with our mission. Our team will review it and can usually provide a response within two weeks of receiving the completed form.

If your request for a fiscal sponsorship is approved, your group will complete a fiscal sponsorship fund agreement that will outline all the rights and responsibilities of your group and the Community Foundation. We can then welcome the first gifts to the fund.

If your fiscal sponsorship application is approved and you enter into our fiscal sponsorship agreement, you will be asked to submit your fundraising plan for review. We will also ask to review the fundraising activities and materials that are part of that plan.

Accepting gifts into your fund

As you solicit gifts to your fund, we’ll provide language that is important to share with donors so that they understand how their gifts will be handled. You’ll be able to share a link to our donation page so that donors can give directly online. You’ll also be able to inform them how to gift via check or work with our development team to make more complex gifts of stock, property, or other assets.

We will process and acknowledge gifts from donors to your fund, making sure they receive a tax receipt in a timely manner. You’ll be able to log into your fund and see gift and donor information so that you can also thank and steward your donors.  

If you apply for grants from other funders, we will review your applications to the grant opportunities you identify and any reporting required by funders to ensure that grants are used for charitable purposes. You’ll indicate in those grant applications that the grant should be paid to your fund at the Quad Cities Community Foundation.

Granting dollars out of your fund

You will be able to access resources from your fund to fuel your work by recommending a grant from your fund. Again, it is the Community Foundation’s responsibility to determine that those funds are used for a charitable purpose, so you’ll need to document the use of those funds either when you send us the grant request for costs you would like reimbursed, or afterwards for costs you pay with the grant we send you.   

As you celebrate your project’s good work publicly, you will be asked to acknowledge that your charitable funds are held at the Community Foundation through fiscal sponsorship.

Managing the dollars in your fund

The Community Foundation will invest the dollars in your fund according to our Investment Policy and provide regular fund statements to your project’s leaders, and you will periodically submit written reports on your project’s progress to us. When your project is finished or you successfully attain 501(c)(3) status, you’ll inform us, and we’ll grant out all remaining dollars in the fund to the project or to your new 501(c)(3) organization and close the fund.

It’s important to know that the Community Foundation board has what’s called variance power. This means that if the purpose you’re raising money for cannot, for some reason, be fulfilled, we are responsible for finding a closely related alternative use for those dollars to benefit the community and fulfill the intent of donors to the fund.

No. The only funds that have to go through the Community Foundation are those from donors or funders to whom it matters that those funds go to a 501(c)(3) organization. You are welcome to accept gifts or other income directly to your organization from other sources without going through us.  

Fiscal sponsorship is all about maximizing the funds available to your project, which is why the Community Foundation keeps our fee low: just 2% of receipts and an annual 1% fee of your fund’s balanced, assessed quarterly. The fee is set by our Board of Directors and is subject to change at their discretion.

Yes, we do! Visit ResourceLink, our information hub for nonprofits and donors, for a wide array of tools, guides, and other handy resources.