For organizations that do not have 501(c)(3) status, the Foundation accepts applications from fiscal sponsors. The fiscal sponsor organization submits the grant application and, if the grant is approved, becomes the grantee and receives the funds.
Who is involved in a Fiscal Sponsorship
A Fiscal Sponsor is an organization with a 501(c)(3) public charity tax status or a public agency/unit of government that agrees to receive and disburse funds for another group’s project. The project must further the Fiscal Sponsor’s own charitable mission.
The group that the Fiscal Sponsor supports to carry out the project is called the Sponsored Project.
Please note that fiscal agency is not the same thing as fiscal sponsorship. The Bush Foundation does not fund fiscal agency agreements.
When would a Fiscal Sponsorship be appropriate
Some instances where an organization or group may partner with a Fiscal Sponsor include:
- A new organization that does not yet have its 501(c)(3) public charity tax status.
- A 501(c)(3) public charity that does not have the capacity to manage the financial aspects of a grant.
- A collaborative working together on a specific project, but the collaborative is not a legal entity and/or does not have 501(c)(3) public charity tax status, and one of the partner organizations (which does have 501(c)(3) public charity tax status or is a public agency/unit of government) is not willing to serve as the grantee.
Fiscal Sponsor Responsibilities
The Fiscal Sponsor assumes budgetary, legal, programmatic and administrative responsibility for the project, and is considered the applicant organization.
All information requested in the grant application for the applicant organization is that of the Fiscal Sponsor.
The Bush Foundation requires the Fiscal Sponsor (the applicant organization) to attach a written, signed fiscal sponsorship agreement when submitting a grant application.
If a grant is awarded by the Bush Foundation, the Fiscal Sponsor is the grantee. They sign the Bush Foundation’s grant agreement and are responsible for all of the terms within it.
The Fiscal Sponsor is listed as the grantee on the Foundation’s website.
What is a Fiscal Sponsorship Agreement
We look for the following in a fiscal sponsorship agreement:
- Verification that the Sponsored Project’s program furthers the Fiscal Sponsor’s exempt purposes, preferably determined through Board action.
- A statement that the Fiscal Sponsor retains complete discretion and control over the use of funds and is not legally required to distribute funds for the benefit of the Sponsored Project.
- Administrative fee, if any, charged to the Sponsored Project.
- Certification that funds for the Sponsored Project will be held in a designated / restricted account, and information on how those funds can be accessed and who can do so.
- Who is responsible for:
- Fundraising, and any guidance for doing so
- Filing reports to donors
- Filing taxes
- Paying expenses
- Maintaining insurance
- Ancillary/support services provided (e.g., accounting, grants management, meeting space, photocopying, printing, postage, group purchasing, marketing).
- Any required project reporting from the Sponsored Project to the Fiscal Sponsor.
- Required record retention.
- Other legal matters:
- How conflicts are resolved
- How amendments to the agreement are handled
- Dates or timeframe for the sponsorship; termination provisions
- What happens if sponsored organization is dissolved
- Any restrictions on lobbying or political activity
- Intellectual property and ownership rights
Learn more about fiscal sponsorship: