While I respect the NEO team and understand the legal reasons for these arguments, I believe that at this moment of attack and challenge, we should not be casting this kind of doubt on the field, whatever the flaws or weaknesses may be. I disagree with tinkering with the the taxonomy of models as much as I disagree with changing the 990 or enhancing regulatory or taxing authority oversight, specific to fiscal sponsors. In the end, such approaches are solving an imaginary set of transparency and accountability problems with solutions that themselves will cause more problems.
That said, the field does need to attend to some real issues, namely:
-- Continued lack of clarity around taxonomy and language at the top of the taxonomic table: not the models, or the vast subgenre of sponsors, but mainly the ambiguity around the terms "intermediary" and "fiscal sponsor".
-- Inconsistent quality of and approaches to core practices, which lead to failures beyond mere capacity or external impacts, which beset all nonprofits.
-- Lack of understanding of fiscal sponsorship among philanthropy and field adjacent services, notably law (and legislators!) and accountancy, which in the latter case, for example, leads to non-reporting of Model "C" re-grants on the 990, as is required.
The solutions to the above are neither legislative, nor regulatory, but rather, for example:
-- Field self-regulation, modeled on the Community Foundations National Standards administered by CoF;
-- Professional CE-style certification for FS staff and board members
-- Clearer guidance from FASB/GAAP for fiscal sponsors on reporting
-- Continued work with Candid on making publicly legible fiscal sponsor and sponsee data
At this juncture, the challenges the field faces are not legal or legislative, but one of common understanding, practices, and operating capacity to implement best practices.