Nonprofit Fiscal Sponsorship Agreement

FISCAL SPONSORSHIP AGREEMENT

This Fiscal Sponsorship Agreement (this "Agreement") is entered into as of [DATE] (the "Effective Date") by and between:

FISCAL SPONSOR:
[SPONSOR ORGANIZATION NAME]
[ADDRESS]
[CITY], [STATE] [ZIP CODE]
EIN: [XX-XXXXXXX]
(the "Sponsor")

and

SPONSORED PROJECT:
[PROJECT NAME]
[PRIMARY CONTACT NAME]
[ADDRESS]
[CITY], [STATE] [ZIP CODE]
(the "Project" or "Project Leader")

RECITALS

WHEREAS, the Sponsor is a nonprofit corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code;

WHEREAS, the Project seeks to conduct activities that are consistent with the Sponsor's tax-exempt purposes;

WHEREAS, the Project desires to operate under the Sponsor's tax-exempt status until it obtains its own 501(c)(3) status or completes its activities;

WHEREAS, the Sponsor is willing to provide fiscal sponsorship services to the Project;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

ARTICLE 1 - FISCAL SPONSORSHIP MODEL

Select Sponsorship Model

☐ MODEL A - Comprehensive/Direct Fiscal Sponsorship

Under Model A, the Project becomes a program of the Sponsor. The Sponsor has complete legal and fiduciary responsibility for the Project. Project staff (if any) are employees of the Sponsor. The Project has no separate legal existence.

☐ MODEL C - Pre-Approved Grant Fiscal Sponsorship

Under Model C, the Sponsor makes grants to the Project, which maintains its own legal identity (or operates as an unincorporated association or under an individual). The Project is responsible for its own operations and compliance. The Sponsor's role is primarily to receive tax-deductible donations and make grants to the Project.

MODEL A - COMPREHENSIVE FISCAL SPONSORSHIP

[Use this section if Model A is selected]

ARTICLE 2 - RELATIONSHIP AND STRUCTURE (MODEL A)

2.1 Project as Program of Sponsor

The Project shall operate as an internal program or project of the Sponsor. The Project shall not have a separate legal existence during the term of this Agreement.

2.2 Sponsor Control

The Sponsor shall have exclusive control over all charitable funds and assets received for the Project. The Sponsor shall have discretion and control over the use of such funds, consistent with the Project's approved activities and the Sponsor's exempt purposes.

2.3 No Separate Legal Entity

The Project shall not:
(a) Incorporate or form a separate legal entity without prior Sponsor approval;
(b) Obtain its own EIN;
(c) Apply for separate tax-exempt status without Sponsor approval;
(d) Enter into contracts or legal obligations in its own name.

2.4 Project Name

The Project shall operate under the name "[PROJECT NAME]" as a project of [SPONSOR NAME]. Materials may indicate "a fiscally sponsored project of [SPONSOR NAME]."

ARTICLE 3 - EMPLOYMENT AND PERSONNEL (MODEL A)

3.1 Project Staff

If the Project has paid staff, such staff shall be employees of the Sponsor. The Sponsor shall:
(a) Process payroll and withhold required taxes;
(b) Provide required benefits in accordance with Sponsor policies;
(c) Maintain personnel records;
(d) Ensure compliance with employment laws.

3.2 Project Leader

[PROJECT LEADER NAME] is designated as the Project Leader. The Project Leader shall:
(a) Oversee day-to-day Project operations;
(b) Report to [SPONSOR CONTACT] at the Sponsor;
(c) Submit required reports and documentation;
(d) Comply with Sponsor policies and this Agreement.

3.3 Hiring Authority

The Project Leader may recommend staff for hiring, subject to Sponsor approval. All hiring, termination, and personnel decisions are subject to Sponsor policies and final approval.

ARTICLE 4 - FINANCIAL MANAGEMENT (MODEL A)

4.1 Charitable Funds

All funds received for the Project shall be the property of the Sponsor. Donors shall be advised that their contributions are to the Sponsor for the benefit of the Project.

4.2 Segregated Accounting

The Sponsor shall maintain separate accounts or accounting for Project funds, tracking all income and expenses attributed to the Project.

4.3 Budget Approval

The Project shall submit an annual budget for Sponsor approval. Expenditures must be within the approved budget and in furtherance of the Project's approved activities.

4.4 Disbursements

The Sponsor shall disburse funds for Project expenses upon request of the Project Leader, subject to:
(a) Availability of funds in the Project account;
(b) Compliance with the approved budget;
(c) Appropriate documentation;
(d) Sponsor policies and procedures.

4.5 Financial Reporting

The Sponsor shall provide the Project Leader with [monthly/quarterly] financial reports showing:
(a) Income received for the Project;
(b) Expenses paid on behalf of the Project;
(c) Current fund balance.

MODEL C - PRE-APPROVED GRANT FISCAL SPONSORSHIP

[Use this section if Model C is selected]

ARTICLE 2 - RELATIONSHIP AND STRUCTURE (MODEL C)

2.1 Independent Relationship

The Project is [an unincorporated association / a nonprofit corporation pending 501(c)(3) status / operating under [PROJECT LEADER NAME] as an individual]. The Project maintains its own legal identity separate from the Sponsor.

2.2 Grant Relationship

The Sponsor shall receive tax-deductible contributions from donors and shall make grants to the Project for charitable activities consistent with the Sponsor's exempt purposes.

2.3 Sponsor Discretion

The Sponsor retains discretion and control over all contributed funds until they are granted to the Project. The Sponsor may decline to make a grant if it determines that the proposed use is inconsistent with its exempt purposes.

2.4 Project Compliance

The Project shall be responsible for its own legal and tax compliance, including but not limited to:
(a) Employment taxes and payroll (if applicable);
(b) Business licenses and permits;
(c) Insurance;
(d) Compliance with applicable laws.

ARTICLE 3 - GRANT PROCESS (MODEL C)

3.1 Pre-Approved Grant

The Sponsor hereby pre-approves grants to the Project for activities described in Exhibit A, subject to the terms of this Agreement.

3.2 Grant Requests

The Project shall submit grant requests to the Sponsor [weekly/monthly/as needed] using the Sponsor's grant request form. Each request shall include:
(a) Amount requested;
(b) Purpose of funds;
(c) Documentation of expenses (invoices, receipts);
(d) Confirmation that expenses are consistent with approved activities.

3.3 Grant Disbursement

Upon receipt of a complete grant request, the Sponsor shall disburse funds within [NUMBER] business days, subject to:
(a) Availability of funds in the Project fund;
(b) Compliance with approved activities;
(c) Adequate documentation.

3.4 Expense Documentation

The Project shall maintain records of all expenditures and provide documentation to the Sponsor upon request.

ARTICLE 4 - FINANCIAL MANAGEMENT (MODEL C)

4.1 Contribution Processing

The Sponsor shall:
(a) Receive and deposit contributions designated for the Project;
(b) Issue tax receipts to donors in the Sponsor's name;
(c) Maintain accounting of funds received for the Project.

4.2 Fund Accounting

The Sponsor shall maintain a separate fund account for the Project, tracking all contributions received and grants disbursed.

4.3 Financial Reporting

The Sponsor shall provide the Project with [monthly/quarterly] statements showing:
(a) Contributions received for the Project;
(b) Grants disbursed to the Project;
(c) Current fund balance;
(d) Administrative fees deducted.

ARTICLE 5 - ADMINISTRATIVE FEE (BOTH MODELS)

5.1 Fee Structure

The Sponsor shall charge an administrative fee for fiscal sponsorship services:

☐ [PERCENTAGE]% of all contributions received for the Project

☐ [PERCENTAGE]% of all funds disbursed

☐ Flat fee of $[AMOUNT] per [month/quarter/year]

☐ Combination: [DESCRIBE]

5.2 Fee Deduction

Administrative fees shall be deducted from the Project fund [monthly/quarterly] before disbursements.

5.3 Additional Fees

The following additional fees may apply:

ARTICLE 6 - PROJECT ACTIVITIES AND REPORTING

6.1 Approved Activities

The Project is approved to conduct the following charitable activities:

[DESCRIPTION OF PROJECT ACTIVITIES AND GOALS]

☐ See Exhibit A for detailed project description and work plan.

6.2 Consistency with Exempt Purposes

All Project activities must be consistent with the Sponsor's tax-exempt purposes under Section 501(c)(3). The Project shall not engage in:
(a) Private inurement or private benefit;
(b) Political campaign activity;
(c) Substantial lobbying;
(d) Activities that could jeopardize the Sponsor's tax-exempt status.

6.3 Reporting Requirements

The Project shall submit to the Sponsor:

6.4 Records Access

The Sponsor shall have access to all Project records upon reasonable request.

ARTICLE 7 - FUNDRAISING AND DONOR RELATIONS

7.1 Fundraising Authority

☐ The Project may conduct fundraising activities with Sponsor approval.

☐ All fundraising must be conducted in the Sponsor's name.

☐ Fundraising materials must be approved by the Sponsor before use.

7.2 Donor Acknowledgment

All contributions shall be acknowledged in the Sponsor's name. The Sponsor shall provide tax receipts to donors as required by law.

7.3 Donor Communication

The Project may communicate with donors about Project activities. All communications must clearly identify the fiscal sponsorship relationship.

7.4 Grant Applications

The Project may apply for grants in coordination with the Sponsor. The Sponsor must be named as the applicant organization on all grant applications where the Sponsor's 501(c)(3) status is required.

ARTICLE 8 - INSURANCE AND LIABILITY

8.1 Sponsor Insurance

The Sponsor maintains the following insurance:
☐ General liability: $[AMOUNT]
☐ Directors and officers: $[AMOUNT]
☐ Workers' compensation (Model A)
☐ [OTHER]

8.2 Project Insurance Requirements (Model C)

The Project shall maintain:
☐ General liability insurance of at least $[AMOUNT]
☐ Workers' compensation (if employees)
☐ [OTHER REQUIRED INSURANCE]

8.3 Indemnification

Model A: The Sponsor shall indemnify the Project Leader for actions taken in good faith within the scope of Project activities.

Model C: The Project shall indemnify and hold harmless the Sponsor from claims arising from Project activities, except for claims arising from the Sponsor's negligence or willful misconduct.

ARTICLE 9 - INTELLECTUAL PROPERTY

9.1 Ownership

☐ Model A: Intellectual property created as part of the Project shall be owned by the Sponsor. Upon termination, ownership may transfer to the Project per Section 10.4.

☐ Model C: Intellectual property created by the Project shall be owned by the Project.

9.2 License

Each party grants the other a non-exclusive license to use names, logos, and materials as necessary to fulfill obligations under this Agreement.

ARTICLE 10 - TERM AND TERMINATION

10.1 Term

This Agreement shall commence on the Effective Date and continue until terminated in accordance with this Article.

Initial Term: [NUMBER] year(s)
Renewal: ☐ Automatic annual renewal ☐ Requires written agreement

10.2 Termination Without Cause

Either party may terminate this Agreement upon [NUMBER] days' written notice.

10.3 Termination for Cause

Either party may terminate immediately if the other party:
(a) Materially breaches this Agreement and fails to cure within [NUMBER] days;
(b) Engages in fraud, dishonesty, or illegal activity;
(c) Takes actions that could jeopardize the Sponsor's tax-exempt status;
(d) Becomes insolvent or files for bankruptcy.

10.4 Effect of Termination

Upon termination:

(a) The Sponsor shall provide a final accounting within [NUMBER] days;

(b) Remaining funds shall be:
☐ Transferred to the Project if it has obtained 501(c)(3) status;
☐ Transferred to another 501(c)(3) organization designated by the Project (subject to Sponsor approval);
☐ Retained by the Sponsor for similar charitable purposes if no qualifying recipient is identified within [NUMBER] days;

(c) The Project shall:

• Cease using the Sponsor's name and tax-exempt status;
• Return any Sponsor property;
• Complete all reporting requirements.

10.5 Survival

The following provisions survive termination: confidentiality, indemnification, and any accrued obligations.

ARTICLE 11 - REPRESENTATIONS AND WARRANTIES

11.1 Sponsor Representations

The Sponsor represents that:
(a) It is a 501(c)(3) organization in good standing;
(b) It has authority to enter into this Agreement;
(c) Fiscal sponsorship of the Project is consistent with its exempt purposes.

11.2 Project Representations

The Project represents that:
(a) The Project Leader has authority to enter into this Agreement;
(b) All information provided is accurate and complete;
(c) Project activities are consistent with charitable purposes;
(d) The Project will comply with all applicable laws.

ARTICLE 12 - GENERAL PROVISIONS

12.1 Entire Agreement

This Agreement constitutes the entire agreement between the parties.

12.2 Amendment

This Agreement may be amended only by written agreement signed by both parties.

12.3 Governing Law

This Agreement shall be governed by the laws of the State of [STATE].

12.4 Notices

All notices shall be in writing and sent to the addresses above.

12.5 Assignment

Neither party may assign this Agreement without the other party's written consent.

12.6 Severability

If any provision is found invalid, the remaining provisions shall continue in effect.

SIGNATURES

FISCAL SPONSOR:

[SPONSOR ORGANIZATION NAME]

By: _________________________________________

Printed Name: [NAME]

Title: [TITLE]

Date: ___________________________________

SPONSORED PROJECT:

[PROJECT NAME]

By: _________________________________________

Printed Name: [PROJECT LEADER NAME]

Title: Project Leader

Date: ___________________________________

EXHIBIT A - PROJECT DESCRIPTION

Project Name: [NAME]

Mission/Purpose:
[DESCRIPTION]

Target Population:
[DESCRIPTION]

Activities:
[DESCRIPTION]

Goals and Objectives:
[DESCRIPTION]

Timeline:
[DESCRIPTION]

Budget Summary:
[ATTACH OR DESCRIBE]

[END OF DOCUMENT]