Fiscal Sponsor Organizations

Hi @Stef Flores - I’ll be curious to hear what others have to say. In my experience, there is a wide range of how different sponsors handle this. All the way from “do nothing” (i.e. no agreement) to an intricate process with a full agreement.

One approach I’ve seen that I like is having the committee members sign an acknowledgement (a 1-page doc that lists roles, responsibilities and expectations), rather than a separate agreement. And one of the items in the acknowledgement is that they will abide by the FS agreement.

This can cut down on process and also reduce the potential to scare away potential advisory/steering committee members. (Disclaimer: This is not legal advice, your mileage may vary.)

@Andrew Schulman Ohhh I like this!

hey @Stef Flores ! we don’t have committee agreements in place at this time, but when a fiscal sponsor project lead rolls off, we have all current/remaining project leads sign a new fiscal sponsorship agreement. we used to do that with amendments but found it too tricky to manage all the docs — easier to just have one doc that’s current and updated, and it also reflects all the current leads agreeing that they are the current leads. I hope that’s helpful in your process.

@Anne Haddox (they/them) Thank you, Anne! I def see the value of this. (I have a few projects with three, four, five amendments at this point! )

Following to see what others say. I have been working on doing a one-pager type agreement like Andrew mentioned but have not formally rolled it out or confirmed its the “right” approach just yet. The simplified doc would pull certain aspects from the FSA, or a Contract, or Volunteer agreement. A few bullet points from that may include:

Support the efforts of furthering the Project Description as described in the Fiscal Sponsorship Agreement

Volunteer my time/efforts in support of the Project without any form of remuneration expected in return.

Abide by all terms and conditions and policies of the Fiscal Sponsorship Agreement and its included exhibits

Act with high standards of ethical conduct

Maintain a positive and constructive relationship with Sponsor

Avoid conflicts of interest and make known any potential conflicts of interest to Sponsor.

Not engage in any activity that jeopardizes Sponsor’s nonprofit or tax-exempt status or otherwise create serious liability

Make known to Sponsor any activities, actions, or risks that may reflect poorly, result in any accusations or lead to litigations against Sponsor or its fiscally sponsored projects.

Respect the role of Sponsor and its Board of Directors as the single legal entity who maintains full responsibility and variance power over all project related activities, funding, and employee classifications.

Hold in strictest confidence any confidential information, and not to use it except for the benefit of Sponsor and its fiscally sponsored project or to disclose to any third party without prior written authorization of Sponsor, for the duration of my role as an Advisory Committee member and thereafter.

@Josh Burgner I am really liking this one page (ish) approach…thank you so much for sharing some of the considerations you’d list. If we end up going this route, I’ll be sure to circle back and share!

@Josh Burgner Interesting sidetrack: “Volunteer my time/efforts in support of the Project without any form of remuneration expected in return.” If our advisory council is made up of community members of a historically marginalized group, it may be more difficult to encourage volunteer participation, especially if the project founder is being paid. Do you think volunteerism for an advisory council is as important as volunteerism for a board of directors?

@Whitney Cook - great question. I dont think its AS important. In fact we do actually allow for some Honorariums for advisory council members and in super limited circumstances allow for pay in other ways. By in large project committees are volunteer led. I think the key is just making sure the payment is done in a way that’s actually compliant from an employment law perspective

@Whitney Cook, a lot of our projects at SGF are built by and supporting marginalized groups, too.

In 2021, we were audited by the IRS around worker classification (IC vs EE). Unfortunately, we found we weren’t able to safely classify Advisory Council/Committee Members as independent contractors, but we were consistently fielding requests from our projects to pay these folks.

Ultimately, we decided it was important enough and the risk felt low enough to allow our projects to offer honorariums. We pretty arbitrarily picked an annual max of $3600, and all members of the committee should receive the same amount (to avoid payments looking like they were for work completed). Recipients also sign a form that states they are not receiving compensation/are not considered employees of the organization to (hopefully) help offer a little protection there against potential wage claims.

We can definitely improve upon the roll-on and roll-off process, but we have all committee members sign the FSA and have new members sign an agreement that they will abide by the FSA and have approval from the rest of the committee

@Nathan Hewitt Hiii! How do you currently treat (or plan to treat) when someone rolls off of the committee? Is there maybe a separate agreement they would sign to indicate they have rolled off/have no legal responsibility for the project moving forward?

The plan is to have a small agreement like that, yes!