It can be a challenge to find a funder that will support a newly developed nonprofit organization or that will award a grant to an organization that has not yet been classified as a 501(c)(3). Depending on your organization’s focus you could consider looking within your community to find an organization with a similar vision and ask them to serve as your fiscal agent.
A fiscal agent is a 501(c)(3) charitable organization that agrees to accept and be responsible for grant monies on your behalf. This partnership could allow you to seek grants and other tax-deductible donations under the fiscal agent’s exempt status allowing you to start your project sooner. This arrangement is useful for new organizations that want to “test the waters” before deciding whether to seek 501(c)(3) status, as well as coalitions that are looking for a neutral party to administer their funds.
The grant would be awarded to the name of the fiscal agent and they would forward the funds to your organization. The fiscal agent is legally responsible for receiving and safeguarding your grant funds and must maintain separate records of disbursements related to the grant but will be required to distribute the funds in accordance with the grant award notice. Because you will not have direct control of the grant funds you will need develop a legally-binding contract outlining funding details. It is your responsibility to follow up with the fiscal agent to ensure that you receive your grant funds.
For more information: Fiscalsponsorship.com, an authoritative site by nonprofit attorney Gregory L. Colvin
A fiscal agent is a 501(c)(3) charitable organization that agrees to accept and be responsible for grant monies on your behalf. This partnership could allow you to seek grants and other tax-deductible donations under the fiscal agent’s exempt status allowing you to start your project sooner. This arrangement is useful for new organizations that want to “test the waters” before deciding whether to seek 501(c)(3) status, as well as coalitions that are looking for a neutral party to administer their funds.
The grant would be awarded to the name of the fiscal agent and they would forward the funds to your organization. The fiscal agent is legally responsible for receiving and safeguarding your grant funds and must maintain separate records of disbursements related to the grant but will be required to distribute the funds in accordance with the grant award notice. Because you will not have direct control of the grant funds you will need develop a legally-binding contract outlining funding details. It is your responsibility to follow up with the fiscal agent to ensure that you receive your grant funds.
For more information: Fiscalsponsorship.com, an authoritative site by nonprofit attorney Gregory L. Colvin
RSS Feed
