Fiscal Sponsor Organizations

At the very least, it should be a Model “A” relationship, not “C”. That kind of crime indicates poor controls, reporting, oversight, etc. Until the organization proves it’s put in provisions to prevent such events moving forward I don’t think you want to be doing any transactional business with them. I’d also want to think carefully about the reputational issues that may arise as the law enforcement investigation proceeds and whether you might be pulled into the negative halo. I’d also want to know if there are creditor or other funder claims to recover funds and whether you and funds you manage might be pulled into that recovery process legally or politically.

@Thaddeus Squire, so many good points.

How would it work, if they were to take this project on as an A? Would the org have to give up its c3/close? Or how would it (ideally) look if it stayed open and also had a Model A project?

It would be a Model A project with a representative of the org derving as project director. What happens to the org, in some ways, is not the sponsor’s affair as long as there is a clear project director and FSA in place.

Agree with the above and would also suggest changing the project name, if possible. You wouldn’t want to inadvertently take on the liabilities of the c3 that is imploding or cause donor confusion.