All types of artists can benefit from fiscal sponsorship. In fact, according to Americans for the Arts, “there are over 113,000 organizations dedicated to many aspects of cultural life.” However, for many artists or art-focused organizations, finding a steady stream of fundraising can be a challenge. Adding to the hurdles, many artists operate independently, making them solely responsible for funding, organizing, and managing their individual work or larger organization.
Fiscal sponsorship can be a viable option for artists and art-focused groups. By partnering with fiscal sponsors, individual artists can qualify for tax-deductible donations while saving lots of time and money that might otherwise be spent establishing a traditional 501(C)(3).
What is fiscal sponsorship?
Fiscal Sponsorship can be an efficient way to raise funds legally for a charitable cause, without having to officially incorporate or wait months and months for the IRS to grant tax-exempt 501(c)(3) status.
If you or your project would like to solicit tax-deductible donations, host a fundraiser or charity event, support a mission-based project, respond to an event or time-sensitive need (like a natural disaster or catastrophic event), or are looking to receive or distribute a grant, then a Fiscal Sponsor is the most efficient way to get started.
What is a fiscal sponsor?
A Fiscal Sponsor is a tax-exempt nonprofit organization that has jumped through the legal and financial hurdles required to receive and maintain nonprofit status from the Internal Revenue Service.
The Fiscal Sponsor can ‘lend’ their nonprofit status to a nonexempt project or cause through a process called Fiscal Sponsorship. This allows the sponsored organization to focus on mission-critical charity work, all the while operating legally under the “borrowed” 501(c)(3) status of the Fiscal Sponsor.
How can fiscal sponsorship help artists?
Artists generally rely on two sources of income: grants or charitable funds given to them from nonprofit or government organizations. Two: sales of their art to individual donors.
Finding, applying, and managing these forms of charitable donations and grants can be challenging for any artist or art collective. Through fiscal sponsorship, artists can be partnered with high-quality fiscal sponsors that can help grow their collective, or community-focused group. Traditionally, fiscal sponsors help out their sponsored organizations or projects by providing guidance, oversight, and some limited forms of accountability.
Can individual artists qualify for fiscal sponsorship?
In most cases, individual artists can’t qualify for fiscal sponsorship. That’s because fiscal sponsorship is not a funding mechanism, but instead a way of establishing a charitable project or group faster and without the hassle of IRS wait times or paperwork. For artists to qualify for fiscal sponsorship, they need to show that their individual practice fits the general criteria of a nonprofit.
Instead, fiscal sponsors are more likely to partner with art-focused organizations, local art groups, or community-centered art initiatives. In turn, these newly established charitable groups might extend grants or funds raised to local individual artists. What’s important to note is fiscal sponsorship is not a quick-and-easy way to gain more funds. However, fiscal sponsorship does cut down on the paperwork, startup times, and initial investments required to start a traditional 501(C)(3) dedicated to the arts.
How to find fiscal sponsorship opportunities
Lots of established organizations provide fiscal sponsorships to newly formed charitable organizations or projects. Direct contact with these organizations through professional connections is a great way to connect to nonprofits looking to sponsor local organizations. For those looking for a more immediate solution, Ribbon offers charitable individuals access to fiscal sponsors through our all-in-one platform for fiscal sponsorship.
When you join Ribbon, we partner your organization or charitable project with existing nonprofits looking to sponsor new organizations. Once connected, your organization will get access to comprehensive banking tools like tracking spending and paying pills, customizable fundraising tools, and organizational tools to make managing your organization a breeze.
Start a new charity with ribbon today.
Our all-in-one platform uses fiscal sponsorship to help you start a charity quicker. With tools for banking, organizational management, and fundraising we give you everything your charity needs to succeed, all wrapped up with Ribbon.