Model C Fiscal Sponsors

  • 1.  Tips on Model C who has very similar for profit revenue

    Posted 02-12-2024 15:21

    Hi Everyone! I’m very new here, so thank you in advance and for everything I’ve learned so far.

    This is my first time coordinating a model C fiscal sponsorship. An organization which may consider becoming a 501c3 in the future would like access to applicable grants and individual donations. They are very hesitant about the “cost” of a fiscal sponsor. When we told them all of their donations through Salsa would have the 8% cost share applied, they asked why it cost more than Salsa’s fees. They indicated they want to save money by doing some of their work alone, including a conference to raise awareness, network, and raise funds.

    “Salsa was mentioned in regards to the registration for the conference, however, after talking with our marketing team- they thought we can handle this part. That said, we are wondering if we could have a QR code made by you- for people interested in donating to R4C, outside of the conference. So, we can add this function into the registration form.”

    My question is, how would you handle this situation? First, they don’t seem to understand they are sharing the cost of maintaining 501c3 status. Second, they are raising funds for the same purpose outside our model. Third, they want to embed our fiscal sponsorship into said for-profit conference.

    Is this normal? I don’t have a reference point and am worried people will be confused about whether the money they are giving to the organization is tax-deductible.

    Thanks!



  • 2.  RE: Tips on Model C who has very similar for profit revenue

    Posted 02-12-2024 19:47
    Hi @Whitney Cook - Sounds like there is definitely a bit of confusion. Just to clarify, is the project organization currently a for-profit? It sounds like that may be the case but just want to make sure.

    If they are a for-profit, you really need to be careful and clear that the specific work being done under fiscal sponsorship is actually charitable and is clearly segmented from the for-profit work.

    Since Model C is really a regrant relationship, some sponsors do not assess a shared cost (aka fee) on earned income - only on charitable funds - grants and donations.

    But no matter what, your organization, as the sponsor, should be the party that’s deciding what falls under the FS and what does not.


  • 3.  RE: Tips on Model C who has very similar for profit revenue

    Posted 02-13-2024 16:09
    @Andrew Schulman They are currently a Marketing Cooperative of health workers addressing inequity. They have had a fiscal sponsor in the past which seems to have been a bit overbearing and not the best partner, so they’ve qualified for grants before and are comfortable writing grant applications. The business is really just two programs that both would easily fall under a charitable endeavor. We’d only be supporting one of those.


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