Fiscal sponsorship is practiced across the country in dynamic ways by dedicated organizations that believe social innovators should be more concerned with achieving their missions than with establishing and maintaining the administrative infrastructure of an organization. Yet, as an emerging field, fiscal sponsorship can raise questions of regulatory compliance for funders and programs struggling to understand the true nature of the relationship between a fiscal sponsor and its projects.
Six years ago, the leaders of six fiscal sponsor organizations from across the country sat down at a table in Tides’ office in San Francisco. It was the first time that fiscal sponsor professionals had gathered with their peers to discuss the opportunities and challenges of fiscal sponsorship and its place in the nonprofit sector. This group—Community Partners, Colorado Nonprofit Development Center, Earth Island Institute, Community Initiatives, Third Sector New England, and Tides Center—became known as the National Network of Fiscal Sponsors. Together, we have worked collaboratively to define and build the relatively unknown, and sometimes misunderstood, field of fiscal sponsorship within the nonprofit sector. The Network has grown to over 60 active members with a list of over 200 practitioners and affiliated organizations.
The NNFS recently completed the first ever Guidelines for Fiscal Sponsorship. The purpose of these guidelines is to raise awareness and broaden the understanding of fiscal sponsorship, and to promulgate standards of best practices in order to improve the field of fiscal sponsorship and increase its value to the sector.
These guidelines have value for fiscal sponsors, funders, and nonprofit leaders. They can be used by funders to better understand the relationship a fiscal sponsor has with its project, increasing confidence in grantmaking to fiscally sponsored projects. They can be used by potential projects to better understand the relationship between project and sponsor and as a way to vet potential fiscal sponsors before engaging in a formal relationship. Organizations acting as fiscal sponsors can utilize the guidelines to help educate themselves and their boards of directors to improve their operations and enhance their ability to serve their projects effectively.
Thoughtful citizens do not become social innovators because they want to file regulatory paperwork. In this economy, innovation and efficiency are critical to uncover and support emerging models of enacting social change. A vibrant and trusted field of fiscal sponsorship is a key component to sustaining the work and energies of individual leaders and the nonprofit sector as a whole.