Fiscal Sponsor Directory Survey Highlights [ Download Complete Stats ]

  • Since this Directory was launched Nov. 19, 2008, 5 sponsors have dropped out and 24 have been added.
  • The 158 fiscal sponsors in this directory have completed a 10-question survey asking about their experience, eligibility requirements, fee structure, services and philosophy — enough information that prospective projects can get a feel for which sponsors might make a good fit for them.
  • This is the largest database of essential information about individual fiscal sponsors; it includes major players and some with only a few projects.
  • These fiscal sponsors operate in 31 states, Washington, D.C., and Ontario, Canada. California has the most, 53 — a third of the total.
  • Community foundations comprise 22% of the fiscal sponsors.
  • Third Sector New England is the most experienced fiscal sponsor in the directory — since 1959 — and sponsors 35 projects now.
GROWTH: Follows the rise of nonprofits

Before the 1950s, only 152,000 501(c)(3)s were operating in the United States. The pace picked up in the ’70s and ’80s with roughly 190,000 new ones in each decade. But numbers of brand-new nonprofits almost doubled — to 372,000 — in the 1990s. By 2008, there were 1.4 million in the nation.

On a much smaller scale, fiscal sponsorship has followed that trajectory, starting in the late 1960s and 1970s when community services began to soar as the free-services-for-all concept took hold in California and spread throughout the nation.

The number of new fiscal sponsors jumped in the 1990s. That’s when 41 of the sponsors in this directory — more than double the number of startups in the previous two decades — took on their first project. The pace of new fiscal sponsors has accelerated, with 63 or 40% forming since 2000.

The field of fiscal sponsorship is growing, though its main impact is qualitative.

SCOPE: 8,089 projects

The role of the fiscal sponsor also has taken off. Though the numbers of fiscal sponsors and the projects they host are minuscule compared with the number of U.S. nonprofits, they are a factor in the improving quality of nonprofit management, a trend that is acknowledged throughout the sector as awareness of fiscal sponsorship’s benefits spreads.

These 158 fiscal sponsors are home to 8,089 projects, which an educated estimate suggests these sponsors manage charitable funding of up to $1 billion. Nearly a third of the agencies sponsor 1 to 5 projects, while 14% sponsor 51 to 100 projects.

Congressional District Programs Inc. sponsors 1,000 projects, the most of any fiscal sponsor in the directory. The 10 largest combined sponsor 3,916 projects, nearly half of the projects represented in this directory.

A hidden efficiency for the nonprofit sector shows up in the projects-to-sponsor ratio. Projects come under their sponsor’s board of directors; they don’t need their own board to operate. A truism of community service is that many board members wear multiple nonprofit hats. If each of the thousands of projects had to have its own board of directors, that would mean 20,000 to 50,000 civic-minded people in communities across the country would have to stretch themselves ever thinner.

Fiscal sponsorship puts all these projects under the sponsors’ existing boards of directors, taking pressure off the pool of primarily volunteer professionals.

ELIGIBILITY: Aligned missions

Fiscal sponsorship must be largely a labor of love, because 143 or 91% of the sponsors in this directory say “aligned mission/values” is chief among their eligibility criteria. The second most-cited eligibility criterion is “geographic,” with half of the sponsors requiring their projects to operate nearby, in the same metropolitan area, state or region.

PROJECTS: Arts is tops

There is some specialization among fiscal sponsors, though primarily with arts organizations, understandably. Out of 20 service choices on the survey, five sponsors said they accept projects in all categories. More than a third will sponsor projects in at least a dozen service categories.

Arts and culture, hands-down, is the most popular project category, with 117 — 74% — of the sponsors willing to take them on. And of these, film and video projects are a favored subcategory.

Education is the next largest category of service with 85, followed by children, youth and families at 82 and youth development 79.

FEES: Mostly 5%-10%

About 30% of these fiscal sponsors charge fees of 5% or less of a project’s revenues, and nearly half charge 6% to 10%. Only 13 charge more than 10%, in most cases to handle government-funded projects, which can require adhering to federal audit standards. Some sponsors have sliding-scale fees, depending on a project’s revenues; others will negotiate the fee.

SERVICES: Spectrum of assistance

Bookkeeping/accounting and bill paying are the primary services sponsors provide their projects – two-thirds do that.

Surprisingly, less than a third of the sponsors handle their projects’ payroll. Half provide organizational development, and tax reporting is offered by 73 sponsors, 46% of them.
This suggests that the majority of fiscal sponsors do not practice the project-is-us degree of ownership described in Fiscal Sponsorship: 6 Ways to Do It Right — the Model A direct project — that involves the highest level of responsibility a fiscal sponsor assumes for a project.

The larger, more experienced sponsors, according to survey results, tend to provide a spectrum of financial services — all of the above plus they handle insurance and auditing. Such an array of administrative support could handle the requirements of every model, which indicates why the experienced sponsors’ fees are higher — more services, more staff required.

DO IT RIGHT: 6 Ways

The most significant publication in the field is attorney Gregory Colvin’s Fiscal Sponsorship: 6 Ways to Do It Right, first published in 1993 with an expanded and updated edition in 2005.

Colvin’s book has had great impact on fiscal sponsorship. It changed the nomenclature. As all semanticists know, language is culture, and Fiscal Sponsorship: 6 Way to Do It Right – by changing the term for this process from “fiscal agent” to “fiscal sponsor” – has helped the culture of fiscal sponsorship evolve. The term “fiscal sponsor” has caught on, forcing a change in behavior from the days of “fiscal agency,” when the relationship was often considered a trap for the unwary funder.

Among the 74, or 47%, of participating fiscal sponsors that had read Colvin’s book, two-thirds practice primarily Model C, the preapproved grant relationship.
The second most popular scenario, Model A, the direct project, is practiced by 43 sponsors.

DATA UPDATES

These highlights from the survey data on participating fiscal sponsors were updated in mid-June 2009. As additional fiscal sponsors participate, or as sponsors correct and add to existing entries, the data in these highlights will be updated.

Fiscal sponsors:
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