3 Things You Should Consider Before Applying for Fiscal Sponsorship

fiscal sponsorship

While writing a piece on fiscal sponsorship, I came across the Nonprofit Quarterly post, “Fiscal Sponsorship: A Balanced Overview.” It’s a great introduction to two models and has good explanations of why the arrangement is appealing.

I’ll still write about the other sponsorship options out there. But thought it helpful to focus more on the “why” and the “how” since the “what” was covered.

I’ve covered three considerations – with bonus suggestions – to keep in mind when thinking about fiscal sponsorship. All three are summarized in a nifty infographic below. And if you’ve worked with a fiscal sponsor please feel free to suggest other considerations based on your experiences in the comments section.

1. Goal

To get the biggest bang for your fiscal sponsor buck, you have to understand your goal(s). And not just “goals” in the sense of end-results. What’s being sponsored? Why? For how long? And for what reason? Visualizing how you see things running and working backward is an amazing trick for this. It gives you more direction than sitting with a mind-map and brainstorming from thin air.

But take this step seriously, spend a little more time to work through it. Because a failure to understand ALWAYS shows in execution. In the form of low impact, financial inefficiency, or mission confusion. Don’t be afraid to explore other options either.

2. Vehicle

Fiscal sponsorship comes in so many different forms. In a way, choosing a sponsor model resembles entering a fro-yo shop. SO many flavors. Gluten-free, nut-free cheesecake here and pumpkin spice over there! Then right on the heels of excitement, comes the panic and anxiety. Or maybe that’s just me.

The ease with which your options can – and will – overwhelm is why I emphasize understanding your goals. Research sponsorship models to understand which one best positions you for success. The more time you spend here, the more familiarity you’ll have and the easier it is to make a decision.

For example, a one-off project won’t need the bells and whistles of a long-term program. A reality which may make it more attractive to go with a model where a sponsor keeps ultimate control while you manage. Trading off autonomy for less worry about the risks.

 

3. Fit

That a sponsor lends you its exemption status isn’t a reason to be deferential. A common mistake is to cower to sponsors out of gratefulness, without a drop of diligence.

Why is this a problem? Because sponsorship isn’t a donation. You pay for that service as you do any other. The expectations you have for your barista’s foam skills should be the same expectations you have toward a sponsor. And ultimately, a sponsorship arrangement has to fit you and your needs.

After evaluating your goals, and how to get there, take a look at the options and see what jives. Any sponsors match your purpose? Connect you with potential partners or referrals? What are the expectations- for example, reporting or contribution – and can you realistically meet them?

 

Other Bits and Pieces

If you’re in the process of finding a fiscal sponsor you know there’s much more involved than the three things I list. Way too many to talk about here. But other things to think about are:

Rapport. This could go into “Fit” but I think it warrants its own bullet. Is the sponsor personable and supportive? Do you feel comfortable with them? And most importantly, what’s their philosophy (or reputation) on management? With sponsorship, the success of what you’re sponsoring depends as much on this relationship as it does what you’re doing.

Logistics. Depending on the sophistication of the Sponsor, the Sponsorship Agreement you sign will either serve its purpose as a guideline or will be a hot mess. The hot mess variety tends to happen when sponsors cherry pick what they like from different models. The problem is, you’re left with an agreement so all over the place that you don’t understand what to expect or what’s expected of you. Make sure you understand how things should work. And that it’s clear in anything you sign.

Risk. In all honesty, the bar for becoming a sponsor is pretty low; all things considered. Some organizations won’t have the infrastructure, knowledge or resources to do what they hope. You shouldn’t get caught in the crosshairs of their aspirations and reality. Before committing, check whether the sponsor actually monitors the organizations it sponsors. And are they transparent with money and operations? Remember, use of their exemption status depends entirely on their ability to keep it.

So after reading this, is there anything important that anyone would add? Leave a comment below!

 

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Fiscal Sponsorship

Infographic