Need a fiscal sponsor? Don’t forget to ask these 9 questions

Recently, interest in fiscal sponsorships for mission-driven projects has been booming. Fiscal sponsors can provide organizations with so many benefits that it’s no wonder they have become so popular! As Global Impact’s Managing Director for Finance and Business Services, I’ve personally witnessed significant growth over the past year and have guided many organizations through the process.

Fiscal sponsors hold a lot of responsibility as we are the ones handling your donations, so I understand how important it is for organizations to thoroughly vet their prospects and ensure that the partnership will be a good fit. Below are some excellent questions that our current clients have asked us when they were in the process of shopping around for a fiscal sponsor.

Question: What is your philosophy as a fiscal sponsor? What makes you unique?
Our answer: With almost 70 years of experience, we are a nonprofit focused on putting mission first. We work hard to elevate the projects we support and customize them appropriately with economies of scale layered on. Our desire as an implementing partner is to fortify our clients’ ability to globally raise funds for greater giving and social impact.

Question: How will you match the right team to our project? What level of communication can I expect from your team?
Our answer: I’ve been fortunate enough to expand our talented team to help meet the needs of our growing client list. We have staff with expertise in different areas, including grants management (tracking and reporting), financial technology systems, team support, audit oversight and project management. We assess each client’s needs and match the team according to the services they require. We also appoint one individual as the client’s main point of contact to ensure clear and consistent communication.

Question: From submitting the application to set up, how long is the timeline?
Our answer: We know how lengthy application and contract times can be and pride ourselves on our efficiency. Our process takes around two to four weeks to complete, depending on the services needed.

Question: Do you provide detailed financial reports or online access? And can we customize the tracking systems?
Our answer: Our finance team is able to provide monthly or quarterly financial reports depending on the client’s preference. For U.S. clients under Global Impact, we are also able to provide access to their Qgiv online donation platform. This will provide real-time insight into contributions received, as well as information related to their donors. We are also able to customize reports according to each client’s unique needs and can assist with the development of outside tools.

Question: Do you provide fiscal sponsorship outside of the U.S.?
Our answer: Yes, we have registered charities in the UK and Canada. Additionally, we launched the Global Impact Social Welfare Fund in the fall of 2022, which allows us to offer fiscal sponsorship services in both the 501(c)(3) and 501(c)(4) spaces.

Question: What tips do you have to ensure a successful partnership?
Our answer: Having formalized processes and procedures in place, like those Global Impact and Global Impact Social Welfare Fund have to offer, helps both the transition to fiscal sponsorship as well as ongoing operations run smoothly. Consistent communication is also key to a healthy working relationship, whether it’s designating a main point of contact from your organization for the fiscal sponsor to work with or hosting regular meetings for larger organizations.

Question: At what point do we outgrow fiscal sponsorship? What does the process to obtain our own 501(c)(3) status look like?
Our answer: Some organizations may choose fiscal sponsorship as their long-term solution. Fiscal sponsorships are efficient and affordable in comparison to the additional expenses that 501(c)(3) organizations must take on, including obtaining a business insurance, hiring your own staff and undertaking audits and tax filings. If your organization does set its sights on becoming a 501(c)(3), our fiscal sponsorship team will support the transition of finances and accounting systems at that time. Additionally, Global Impact can help you set up a 501(c)(3) organization and then serve as your fiscal agent, making us a convenient one-stop shop for the whole process.

Question: What services do you offer as a fiscal agent for 501(c)(3) organizations?
Our answer: Our team is happy to offer the following services:

• Audit and 990 support
• Year-end reports
• Budget planning/projections for the next fiscal year
• Financial reporting, including accounts receivable and payable
• State registration services (invoiced separately)

Question: Do you offer other financial and operational services?
Our answer: Global Impact is able to provide other financial and operational services such as:

• Payroll and benefits administration
• IT packages including hardware, security, help desk support and training
• Board Support:
  • Developing short-, medium- and long-term financial plans and projections
  • Presenting budgets, forecasting and annual reports to the Board of Directors and liaise with the Finance Committee
  • Attending and presenting financials at Board meetings

Please note, these services would be at additional cost and are not included in our fiscal sponsor services. A number of our fiscal sponsor clients choose to explore this route after they’ve received their 501(c)(3) status since they have already been working closely with our team.

A fiscal sponsorship offers many benefits, and as your partner, Global Impact will:

• Maintain a bank account on your behalf, including all funds received for the organization.
• Provide financial reporting on account balances and donations.
• Liaise with donors to facilitate processing and reporting of donations.
• Report donor details back to your organization, including gross amount of donations, to facilitate further donor acknowledgment and ongoing cultivation.
• Provide donor acknowledgement services.
• Oversee accounts payable.
• Assist with vendor contract development and execution.
• Support grant or funding applications by providing financial and organizational information as needed.

I hope these questions have prepared you for a successful fiscal sponsor search. If you are interested in these services and think we’d be a good fit, my team would love to hear from you. Email us at [email protected] to start the conversation.