Fiscal Sponsor Organizations

Ideally yes. Risk is low but I would plan to get registered sooner than later. I would also check if there is a requirement to register in the state in question. Not every state requires registration. There are several consultants/law firms that will help you register in all required states at reasonable rates. Last time I looked into it it was 10k-15k.

Hey, Jasmine! I’d say it really depends on your FS’s risk tolerance and how much you want to invest (both in time/energy and in money).

I’ve worked at two fiscal sponsors. The first used a service to register in all states (that had a requirement) before allowing projects to fundraise. The second registered where they were active and then, as they took on new projects, started registering in those states. Were there some donations that probably came in before the registration was complete? Yeah, that’s likely. Did anything happen? Not to my knowledge.

I think this article has some helpful thoughts: https://www.nolo.com/legal-encyclopedia/does-your-nonprofit-need-register.html#:~:text=Your%20nonprofit%20should%20always%20register,that%20do%20not%20require%20registration.

(Also want to note that I don’t have much knowledge around what the penalties look like.)

Great comments already - and great question, @Jasmine Hall Ratliff.

I’ll just add that there was an earlier discussion on the Hub about this very topic (you can read it here) and we also had one of the firms that does this work come and present at the FS Conversations a couple of years back…the transcript and recording from that are here.

Thanks everyone! I like the idea of prioritizing certain states for now then possibly adding later. Gotta love the murkiness of fiscal sponsorship.

Hi, Jasmine. We got the attached map from Harbor Compliance which shows which states require registration. We have been doing it on a state-by-state basis, renewing once a year. The cost is very low doing it this way, so far less than $500 for 5 states.

I’m curious if there are some states that are higher risk for non-compliance than others? We do not have any organizations outside of WI, but some do a little bit of fundraising outside WI once in a while, and of course they all have donate buttons.