As we begin a new year, many of us are reflecting on the past year and what it means for our work in 2025. It was an extremely busy year here for our fiscal sponsorship work across Global Impact Ventures (GIV), as we expanded our services to Australia, increased our presence in Canada, and launched our first-ever survey of fiscally sponsored clients. In my role as Managing Director of Finance & Business Services and Controller, I now lead our fiscal sponsorship efforts for over 120 clients. It’s a rapidly growing field of work for Global Impact and for the overall philanthropic landscape.
With such a rush of growth, it may seem hard to predict how the fiscal sponsorship industry will change. While I may not be able to see the future, I do have insights from the past year that can help illuminate what’s ahead. Let’s dive into five trends to keep an eye on in 2025 and beyond.
Growth of the Industry
Across Global Impact Ventures, we’ve seen a 200% growth in our fiscally sponsored work over the past few years. And it’s not just us — three times as many fiscal sponsorship programs were created in the last 20 years than were created in the 40 years prior to 2000, according to the 2023 Fiscal Sponsor Field Scan.
As more social impact programs form and want to quickly scale up, more and more organizations are realizing the benefits of fiscal sponsorship. With a fiscal sponsor, organizations can focus on their program and their mission, rather than worrying about operations support. A fiscal sponsor takes on liability, providing business insurance, accounting reporting, and governance documents. There’s a smaller start-up fee, a faster set-up process, and it’s cost effective to outsource this work rather than recruit and hire a dedicated staff member.
In short, with a fiscal sponsor, you can relax because you have an expert team taking care of your fiscal needs. With plenty of mission-driven organizations forming every day in response to world events, passion projects, and new funding, I don’t expect this growth to slow any time soon!
International Reach of Fiscal Sponsorship
Every day, advancing technology makes the world feel more connected. This can be great for organizations looking to make an impact, as supporters around the world can unite to face global challenges.
But when it comes to fundraising abroad, every country has a different tax code and regulations to navigate. For example, the UK has Gift Aid, a tax relief program allowing UK charities to reclaim an extra 25% in tax on every eligible donation made by a UK taxpayer. A fiscal sponsor is an expert at navigating these varying rules, ensuring fundraising is by the books and is making the most of each country’s benefits.
We can also help organizations expand their resources and expertise globally as a professional employer organization (PEO) or by partnering up with other PEOs. Globalization and the sharp rise in remote work has made it more appealing for organizations to hire staff from around the world. With PEOs, we can help our clients hire anyone from anywhere in the world, remotely and with full benefits. Some countries have restrictions that limit an organization to only hire contractors or temp hires. But a fiscal sponsor with PEO services, like Global Impact, can hire full-time, salaried staff from around the world for our clients without those limitations, allowing the program to be able to tap into a broader pool of experts.
I predict that international reach will be an increasingly important benefit as organizations evaluate fiscal sponsorship, enabling them to reach international donors, hire around the world, and expand their missions globally.
A Temporary Fix
More and more startups are realizing they can use fiscal sponsorship as a temporary solution to tide them over until they get their 501(c)(3) status. Approvals for this status can take upwards of a year, and a fiscal sponsor can help organizations get to their missions faster while they wait.
Additionally, all U.S. charities must pass the IRS public support test, which states that 1/3 of a charity’s support must be from public sources. As a fiscal sponsor, any funding from us is 100% public, which can help a new organization pass this public support test. Projects that fail this test have to write a memo to the IRS explaining why they failed and what their strategies are moving forward.
Fiscal sponsorship can also help organizations that are trying to determine what makes sense strategically for their operations. Sometimes an organization will have a 501(c)(3) status but will be unsure whether to continue with it. In this case, some projects will choose to get a fiscal sponsor while they decide their next steps, buying them time while saving them money.
In 2025, I expect we’ll increasingly see organizations turn to fiscal sponsorship as a holdover solution as they wait for their 501(c)(3) status or decide their organizational next steps.
A Long-Term Solution
At the same time, fiscal sponsorship has multiple models, and we’re also seeing an increase in projects staying with us for the long term.
We recently conducted a survey of our fiscally sponsored projects to learn more about their needs and found that only 30-40% were interested in becoming their own 501(c)(3) organization. While many clients hire us for the short term for the reasons laid out above, we’ve seen plenty then realize it’s easier and more effective to have a fiscal sponsor for their long-term goals. Who could blame them – it’s a cost effective, efficient, and worry-free way to manage the finances of a growing nonprofit! In addition, you get all levels of expertise, from an associate level to a CFO all for one price. In 2025, I expect we’ll see even more projects turn into long-term partnerships.
One-Stop Shop
As we’ve seen more entities turn to us as a long-term solution, we’ve also seen an appetite to learn more about our other services across GIV. We have now expanded to offer HR and IT outsourcing support as add-ons for our fiscally sponsored clients. This helps our clients hire talent from across the country and have the operations solutions to fit their growing teams.
Across GIV, we offer a full range of philanthropic services, from workplace giving services to advisory work. This makes us a “one-stop shop” for many of our fiscally sponsored clients looking for support in other areas. We have multiple clients whom we work with in more than one capacity, as both their fiscal sponsor and as an advisor. Our teams across GIV help them set up governance documents, walk through the grantmaking process, establish fundraising strategies, and more.
I predict we’ll see a rise in fiscal sponsors offering a wider array of services and a rise in clients taking advantage of the full suite of services we offer.
GIV is a leader in fiscal sponsorship, and we’re excited to see where 2025 takes us and our industry. Reach out to get the conversation started about how we can serve your organization.
