Fiscal Sponsorship

The Bush Foundation accepts grant applications from organizations and groups working with a fiscal sponsor. If a grant is awarded, the fiscal sponsor is the grantee and receives the funds.

Please note, most applicants do not need to apply with a fiscal sponsor.

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 or program. The project or program must further the fiscal sponsor’s own charitable mission.

The group that the fiscal sponsor supports to carry out the project or program is called the fiscally sponsored organization.

Please note that fiscal agency is not the same thing as fiscal sponsorship. The Bush Foundation does not fund fiscal agency arrangements.

When is fiscal sponsorship 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.

What are the fiscal sponsor's responsibilities

The fiscal sponsor assumes budgetary, legal, programmatic and administrative responsibility for the project or program, 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. The Foundation will review the written agreement as part of its application review process.

If a grant is awarded by the Bush Foundation, the fiscal sponsor is the grantee. The fiscal sponsor signs the Foundation’s grant agreement and is responsible for the terms within it.

The fiscal sponsor is listed as the grantee on the Foundation’s website.

What is in a fiscal sponsorship agreement

We look for the following in a fiscal sponsorship agreement.

These three items must be present:

Verification that the fiscally sponsored organization’s project or 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 fiscally sponsored organization.
Termination provisions.

In addition, good fiscal sponsorship agreements often contain the following:

Administrative fee, if any, charged to the fiscally sponsored organization.
Information about how funds for the fiscally sponsored organization will be held and tracked, and information on how those funds can be accessed and who can do so.
Other legal matters:
- How conflicts are resolved.
- How amendments to the agreement are handled.
- Dates or time frame for the sponsorship.
- What happens if the fiscally sponsored organization is dissolved.
- Any restrictions on lobbying or political activity.
- Intellectual property and ownership rights.
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 fiscally sponsored organization to the fiscal sponsor.
Required record retention.

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