Fiscal Sponsor Organizations

When answering these types of questions I usually tell folks “Industry best practice is…” or “Multiple other fiscal sponsors do this.” But in my org the auditor is seen as the ultimate decider in these types of situations, so it does make things a bit more hairy if you are going against their advice.

@Lucy Kennedy-Wong, she/her Our auditor literally called us a passthrough, so we’re a little worried…

@Whitney Cook Oh no, based just on how the funds are entered in your accounts?!

@Lucy Kennedy-Wong, she/her We’re not sure. They asked for our contracts and SOWs along with our accounting, so it could be anything. We’ve reached out to discuss further and understand where this is coming from.

@Whitney Cook Strange. We also put our Model A funds as income and haven’t heard anything from our auditors yet, so I wish you luck!

I was looking for something else and came across this from Karl Miller’s presentation on project spin off in his suggested variance power contract amendment, “The parties agree that all money and the fair market value of all property in the restricted fund be reported as the income of Sponsor on Sponsor’s financial statements and tax returns. It is the intent of the parties that this Agreement should be interpreted to provide Sponsor with variance powers necessary to enable Sponsor to treat the restricted fund as Sponsor’s asset in accordance with Accounting Standards Codification (ASC) paragraphs ASC 958-605-25-25 and -26, formerly expressed in Statement No. 136 issued by the Financial Accounting Standards Board (FASB).”

I tried to find those ASC paragraphs and went down a big rabbit hole, because it seems like they have changed, but this could be a good place to look for an authority!