Practice Point. To avoid donor confusion and administrative complexity, unless there is a compelling need to structure otherwise, we recommend there only be one fiscal sponsor/legal home for any given Project.
Practice Point. We recommend the fiscal sponsor have simple fundraising guidelines that are shared with Project leadership including expectations on how much lead time the fiscal sponsor needs to review grant applications prior to official submission.
Practice Point. The last sentence immediately above is suggested language for when project leaders desire to sign. Such a decision should be approached carefully. Additionally, the boards of fiscal sponsors could, by board resolution, delegate signatory authority to project directors for contracts under certain thresholds. Even so, a best practice is that the fiscal sponsor always is able to review and approve any agreement prior to it's execution, regardless of who is vested with the authority to sign. Costs:
Examples of Practice Point in a sentence
Practice Point: Advancing funds on committed revenue sources can be very helpful for projects that have reimbursable grants/contracts; essentially providing a line of credit.
For the duration of this Agreement, Fiscal Sponsor will be responsible for the following: Practice Point: Below is a sample of comprehensive supports Model A fiscal sponsors often provide.
Budget and Fundraising Goals for next 12 months Practice Point: This can be a narrative and/or link to full Project budget.
Practice Point: For approving expenses, certain recurring expenses such as phone/internet bills should receive blanket approval so an approval isn't required every month.
Concerning finance and operations, Fiscal Sponsor will: Keep track, document and account for all Project revenues and expenses; Maintain all funds restricted to support the Project in a restricted fund; Practice Point: Fiscal Sponsor should determine whether to restrict the funds within its account or open separate accounts.
More Definitions of Practice Point
Practice Point. Consider including the above section if English is not the primary language of one of the parties.
Practice Point. The above subsection (d) is sample language if the sponsor will ever procure services from the project/project staff.
Practice Point. This template has the Steering Committee as the counterparty to the Fiscal Sponsor. In ‘Model A’ arrangements, we recommend the Project Director, rather than the Steering Committee, be a direct party to the Agreement only in instances where a steering committee has not yet been established in which case, the Director sits in as signatory until a steering committee is created and once created, the agreement is updated to list that steering committee as a party to the agreement. Such an arrangement, including the timeline for establishing the committee, should be clearly written into the fiscal sponsorship agreement.
Practice Point. The names "Fiscal Sponsor" and "Steering Committee" and "Project" are just suggestions to describe the parties throughout the agreement. They hold no special legal meaning here and can be replaced with other identifiers (e.g. “Advisory Board” instead of “Steering Committee”). Whatever name used for shorthand to identify the parties and the activity being fiscally sponsored should be used consistently throughout the agreement. Purpose of this Agreement: The Steering Committee has conceived of and designed the nonprofit initiative described in Exhibit B (the “Project”). The Steering Committee desires to place the Project under the umbrella of Fiscal Sponsor to provide infrastructure and supports as described in this Agreement. Likewise, Fiscal Sponsor determined hosting the Project will further its own exempt purposes and desires to serve as a “Model A” fiscal sponsor for the Project; meaning the Project, for the term of this Agreement, will be a direct program of Fiscal Sponsor and Fiscal Sponsor will assume full legal responsibility for the Project while the Steering Committee in turn will provide strategic direction and oversight for the Project. The Parties are entering into this Agreement to define their relationship and how the Project will be managed.
Practice Point. A general template for Exhibit B describing the Project is found at the end of this document.
Practice Point. Although most fiscal sponsors assess their fee when revenue comes in, some fiscal sponsors assess their fee as funds are expended. Others have different structures. There is no one size fits all approach and the structure chosen should support the dual goals of fairness and sustainability. Additional Costs - The Project will be responsible for paying the cost of fringe benefits (includes the cost of benefits and payroll taxes) for all Project Employees. Additionally, Project will be responsible for any expenses incurred by Fiscal Sponsor outside of the supports described in this Agreement. Examples include special insurance needed for activities not covered by Fiscal Sponsor’s general liability insurance, costs of legal support related to a Project need, and costs associated with special compliance or audits required by funders supporting the Project.
Practice Point. The names "Fiscal Sponsor" and "Partner Organization" and "Project" are just suggestions to describe the parties throughout the agreement. They hold no special legal meaning here and can be replaced with other identifiers. Whatever name used for shorthand to identify the parties and the activity being fiscally sponsored should be used consistently throughout the agreement. Purpose of this Agreement: The Partner Organization has conceived of and designed the nonprofit initiative described in Exhibit B (the “Project”). The Partner Organization desires to place the Project under the umbrella of Fiscal Sponsor to provide infrastructure and supports as described in this Agreement. Likewise, Fiscal Sponsor determined hosting the Project will further its own exempt purposes and desires to serve as a “Model A” fiscal sponsor for the Project; meaning the Project, for the term of this Agreement, will be a direct program of Fiscal Sponsor and Fiscal Sponsor will assume full legal responsibility for the Project. For the duration of this Agreement, the Partner Organization and the Project will be distinct from one another but the Project will receive strategic direction from the Partner Organization. The Parties are entering into this Agreement to define their relationship and how the Project will be managed.