What is fiscal sponsorship and how do I use it with Public Good?

What is fiscal sponsorship?

Fiscal sponsorship is a formal arrangement between a 501(c)(3) organization (“the sponsor”) and another organization (or organizations) (“the sponsee”) not tax exempt. The sponsor allows the sponsee(s) to solicit tax-deductible donations under the sponsor’s exempt status.

Who uses fiscal sponsorship?

There are many reasons organizations use fiscal sponsorship. Some common examples are:

  • Organizations not fully ready or willing to create their own nonprofit
  • Local chapters of larger national organizations
  • Programs housed inside of foundations
  • Individual community gardens managed by a larger nonprofit

How does fiscal sponsorship work on Public Good?

Both the sponsoring nonprofit and the sponsored organization have their own individual Public Good pages. The sponsored organization can manage its page, create campaigns, and collect donations in exactly the same way that all nonprofits do on Public Good. The difference is that the donations are deposited in the sponsoring nonprofit’s bank account. Disbursement of the donations to the sponsee is the responsibility of the sponsor. Donors see an extra line on their receipts noting the name and employer identification number (EIN) of the sponsor to let them know who received their donation.

 

How do I get started?

We’re glad you asked! Make sure that the sponsoring nonprofit is on Public Good and has entered their banking information. If the nonprofit has not signed up on Public Good yet, they can go to https://publicgood.com/orgs/findorg to find their organization and sign up. Then, email us at support@publicgood.com so we can help you get your fiscal sponsorship set up!

 

Once you're set up, you'll need to let the sponsoring organization know how much money you've received each month. You can either have a representative of the sponsoring organization join your organization as an administrator with access to your donation records, or else send your sponsoring org a statement each month with the donations listed.

Does fiscal sponsorship cost extra?

No, organizations operating under a fiscal sponsorship agreement on Public Good get the same low processing rates as regular nonprofits, and donors can (and often do) opt to cover the processing fees.

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