Fiscal Sponsor Organizations

We (Social Good Fund) have allowed loans on a case-by-case basis. We don’t have hard and fast rules for them, but here are some things we consider (which seem to be on your radar already, but expanding here in case it’s interesting to other folks who read the thread): have they been solid partners? Are there signed grant agreements and/or confirmation from funders that these funds will come? How will the loan be paid back? What happens if the project never gets the funds - what happens to the loan? What types of expenses would be supported by the loan? Who is the loan provider and what is their connection to the project? (For example, we wouldn’t want a PD making a loan to the project to then continue paying themselves through our payroll processor.) Might this project exit at some point and how might that impact the term we put on the loan?

Our loan agreement also specifies that if the loan is not paid/shored up by a certain amount of time, the loan turns into a donation.

Very curious to hear what others do!

We recently finalized our bridge fund policy. Below are our requirement. You can also find our policy and what we share with our projects on our manual. https://sites.google.com/movementstrategy.org/innovationcentermanual/bridge-funding?authuser=0

FSPs must have been fiscally sponsored by MSC for at least 24 months to be eligible for bridge funding.

‚óè FSPs are only eligible for bridge funding once per 12 month period.

‚óè FSPs must have secured future funding, in the form of an executed agreement with future installments listed, to be eligible for bridge funding. MSC will not provide bridge funding in an amount exceeding the FSP’s secured funding.

‚óè FSPs must provide a budget detailing the intended use of any bridge funding.

‚óã If the bridge funding is being used to cover a temporary cash-flow gap in restricted funding, it must be spent in alignment with the terms of the restricted grant that will be used to repay it. This includes adhering to the grant’s stated purpose, allowable use of funds, time period, and any other applicable restrictions.

‚óè Bridge funding must be repaid to MSC within 6 months or before the FSP terminates their fiscal sponsorship with MSC, whichever occurs first.

‚óã FSPs currenting in the process of terminating their relationship with MSC are not eligible forbridge funding.

@Daniel Parada Thanks, Daniel, this is very helpful.

@Daniel Parada This is great thank you so much for sharing! We offer bridge funding as well and applying these policies and procedures feel essential.