The Stigma Against Fiscal Sponsorship Needs To End

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[Image description: A hedgehog standing on a table, staring at the camera. It seems to have grey and white spines, brown nose, and tiny little feet. Image obtained from pixabay.com]

Hi everyone. Sunday was Father’s Day, so I spent all day with my two kids, 4-year-old Viet and 1-year-old Kiet, to remind me of the reason I do this work every day. And that reason is—I have to earn money to pay for the exorbitant childcare. Just kidding. (Kind of). I pulled them around the neighborhood on a little red wagon. We picked strawberries and raspberries and played hide-and-seek and read books about bunnies and little blue trucks. It was an amazing day, and it made me grateful for the wonderful community we’re building together as a sector.

All of that to say, I didn’t write a blog post today. However, I wrote a post earlier this week, published on my organization’s blog, which publishes weekly on Wednesday and has had several thought-provoking posts on a variety of topics, written the team. As we do the work, we want to share lessons learned from the challenges and successes in working to develop the power of communities of color and the organizations led by them. If you like the stuff on NAF, you’ll likely enjoy the content on the RVC blog.

Except from the post:

“One of the common complaints lobbed against the nonprofit sector is that we have too many nonprofits competing for resources. So when someone suggests that they might possibly be thinking of maybe starting their own nonprofit, the response from many of us is often ‘Get the torches and pitchforks!’ Then we chase after them, flinging rocks and hummus, until they and their ridiculous ideas of founding a nonprofit are driven out of our village.

“The more reasonable and understanding of us, though, may suggest that they do some due diligence, possibly looking to be fiscally sponsored by another nonprofit instead of forming their own.

“This makes a lot of sense. However, the concept of fiscal sponsorship is somehow unpalatable in many parts of our sector. It’s as if you’re not a ‘real’ nonprofit unless you have 501c status. My organization until recently was fiscally sponsored, so we know how it feels. You feel like a kid trying to get a seat at the adult table. Like Pinocchio, you’re not a ‘real boy’ if you’re fiscally sponsored!” [Read further]

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  • Rusty M. Stahl

    Thanks for this fiscally-sponsored blog post (a Nonprofit AF post with its own persona but actually living at the RVC blog) about fiscal sponsorship. I’ve run orgs at three different fiscal sponsors. And I can back-up your point that funders like to ignore this reality in the field. All their systems are set up to go directly to 501c3 and it causes all kinds of logistical challenges b/c they either don’t communicate with me directly or they will only communicate with me, etc. I would just point folks to some great resources set up by the institutional fiscal sponsor community, such as http://www.fiscalsponsors.org and http://www.fiscalsponsordirectory.org.

  • Ellen Peterson

    But on the funder side of the house, it’s really hard to evaluate financials when it’s the fiscal agent’s, not the actual organization you want to fund. I served as a trustee for a foundation for 11 years and that was always a struggle. We funded several orgs that were fiscally sponsored, which is totally fine, but when you want to make sure there are no red flags in the financials, it’s a struggle.

  • Patrick Taylor

    I wish there was more awareness about fiscal sponsors and willingness on the part of funders to embrace them. It makes me crazy when some volunteer-run organization with a $10k budget that may or may not be around in five years goes through the hassle of getting c3 status. Why not just become a sponsored project and focus your energies on your work?