Fiscal Sponsor Organizations

  • 1.  Forming a legal entity w/ Sec of State

    Posted 04-15-2026 15:41

    We encourage projects to have an EIN and form a separate legal entity with the Secretary of State, to receive funds from the FS.

    In South Carolina they can file Articles of Incorporation as an LLC, corporation or nonprofit corporation. Intuitively, I’d lean towards a nonprofit corp, since it is charitable in nature, but in SC, this is a grant making designation and not all of our projects are grant making. Though it is easier for a nonprofit corp to become a 501c3, we are advising our Model Cs to create an LLC. If they choose to evolve their own 501c3 down the road, it will be a bigger compliance burden for them, but it seems the best short term solution.

    I know that Sec of State Offices vary wildly, but would love to hear what others require or recommend.

    TIA!



  • 2.  RE: Forming a legal entity w/ Sec of State

    Posted 04-21-2026 15:49
    Hi there - I believe in CA and NV once you file your paperwork with the state you have three years to file your IRS designation. I believe there is a limitation to how long you can take to file.

    What are the benefits for having them file for an EIN? Do they have their own bank accounts? How do they use this? Is it just ceremonial so they feel like they own the name, idea?

    I look forward to hearing your perspective. I can be reached at cheyanne@aha-projects.org


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