Guide to Fiscal Sponsorship and Affiliation

Sponsorship: Limited Role of Sponsors

You may get the sponsor in some instances to act in a limited capacity as a fiscal agent. Under this type of sponsoring arrangement, the organization performs a channeling or conduiting function. It assumes expenditure responsibility for the grant money, removing the burden somewhat from the funder. Take note, however, that because of stringent Internal Revenue Service regulations regarding grantor responsibility, many funders are reluctant to give grants to conduits, and many sponsoring organizations hesitate to function as such.

The most common conduits are church groups, fund-raising arms of schools, colleges, and hospitals, and various community organizations. The role of the sponsor in this type of arrangement is generally limited to financial matters only, and this type of fiscal arrangement is sometimes also referred to as in name only sponsorship. The sponsor accepts the grant, since the check is made out to the organization and allocates it to the intended individual recipient as needed. The sponsor may or may not keep track of your expenses as you proceed. As a grantseeker for various types of projects, you may prefer this kind of limited sponsoring arrangement, if you can find it, since it guarantees you some degree of independence. For more information on this type of arrangement, see Fiscal Sponsorship: 6 Ways to Do It Right by Gregory Colvin, available in Foundation Center libraries.