One question I get asked a lot is, "what are the benefits of fiscal sponsorship for small and startup nonprofits?" So, I decided to make this the focus of my first video post (with a transcript pasted below). Enjoy!

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Video Transcript:

Hi I’m Andrew Schulman and welcome to one of the first videos in my Fiscal Sponsorship Minute Series.  

My goal with these videos is to help you understand more about fiscal sponsorship.  Today I’m going to answer a simple question has a pretty powerful answer:

How does Model A fiscal sponsorship benefit small and startup nonprofits?

I believe fiscal sponsorship has four main benefits for small and startup nonprofits. They are:

  1. Speed to Launch
  2. The Ability to Focus
  3. An Experienced Partner
  4. A Stamp of Approval

Let’s quickly go through these one by one.

#1 is Speed to Launch.

If you start a nonprofit using fiscal sponsorship, you just need to find a sponsor that will take on your project. Now, that’s big just – and you’ll still need to do the research and planning, generate support, and of course show your charitable intent – but at least your fate isn’t in the hands of federal and state regulators.

#2: The Ability to Focus.

This is a big one – especially for small and startup nonprofits in the early stages. When starting a nonprofit, most people unknowingly accept the burden of launching and running a small business – but with more extensive IRS and usually state reporting requirements.

In addition to whatever service you’re interested in providing, you’ll have to be on top of regular filings, donor acknowledgments, bookkeeping, setting up a bank account, making sure you’re legally covered, getting the right insurance and on and on and on.

Put another way: if you start independent nonprofit you’re going to need to learn about a lot of different things that aren’t core to work you’ll be doing. And if you go to fiscal sponsor route, you can really hone in get the program up and running and funded, while someone else handles the back office work. And then when you’re ready, you can go out on your own – or not.

#3: An Experienced Partner – and hopefully a teacher.

As I mentioned, having a sponsor should mean you have a partner that will help guide you through the management of your organization and help teach you what it takes to run a successful nonprofit.

This won’t be the case in every situation, but most fiscal sponsors want to see their sponsored projects grow and succeed, and will help them along the way.

#4: A Stamp of Approval for Potential Donors and Partners.

Like number three, this won’t always be the case, but a good fiscal sponsor will have a positive standing in your community, whether that’s a geographic community or can it can be focused around specific cause or idea, or maybe both.

As a small or startup nonprofit you likely have very little, if any, track record, so having a sponsor has a positive standing can help show potential early donors and others that have already been vetted and you’ve earned the “approval” of your sponsor.

Okay, there you have it four big reasons how Model A fiscal sponsorship can benefit small and startup nonprofits. Just to recap they are: Speed to Launch, The Ability to Focus, An Experienced Partner and A Stamp of Approval.

Are there other benefits you think I’ve left out? Do you have other questions about Model A fiscal sponsorship? If so, share them below.

In future videos I hope to dive into Model C sponsorship and lots of other related topics, so stay tuned.

Thanks for watching and see you soon.

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