Nonprofit Management / Fiscal Sponsorship

Fiscal sponsorship is often used by newly formed nonprofits that need to raise money during the start-up phase, before they are recognized as tax-exempt by the IRS. Using a fiscal sponsor enables a program or organization that does not itself qualify as tax-exempt to attract funding for its operations that will -- through the fiscal sponsor - be tax-deductible to donors. Therefore fiscal sponsor arrangements benefit organizations or programs that are not tax-exempt by providing a flow-through pathway for revenue that the organization may not otherwise be in a position to receive.

Volunteers from the the Gering Community Greenhouse enjoying the Old West Balloon Fest. Both of these organizations are managed funds of the OTCF!

Volunteers from the the Gering Community Greenhouse enjoying the Old West Balloon Fest. Both of these organizations are managed funds of the OTCF!

  • Donors are not able to claim a tax deduction unless they itemize deductions and donate to an organization that is recognized by the IRS as tax-exempt pursuant to IRS Code Section 501(c)(3). See IRS Publication 557.
  • Additionally, the guidelines of most private foundations explicitly require grantees to be recognized as tax-exempt by the IRS. Consequently, groups that are not formally recognized by the IRS as tax-exempt are generally not eligible for grants from private foundations.
  • Fiscal sponsorship might be chosen by a newly formed nonprofit that seeks to test-drive its ideas to determine whether there is a market or a desire among the public to fund the end product.
  • Some organizations/programs remain in a fiscal sponsorship relationship for a long time, deciding that their mission can be achieved in that structure without creating a new entity.
  • Some organizations - including those that are tax-exempt - find that utilizing a fiscal sponsor to outsource administrative responsibilities, whether back-office tasks, or those relating to fundraising and disbursement of funds, is the right business model for them. This structure might be particularly well-suited for all-volunteer organizations.

At OTCF, we welcome both established and nascent projects. Our customer service prioritizes convenience, offering quick turnaround on all requests. OTCF provides an exceptional online platform for fundraising, allowing you to design annual giving campaigns, set up monthly donations, and manage event tickets. As a bonus, if you lack a website, we'll create a dedicated page for your fund on our website at no cost.

The core of Fiscal Sponsorship is fiscal management. We handle all project funds, sending detailed reports of disbursements and deposits monthly or quarterly, as you prefer. We manage payments, reimbursements, and deposits. Operating under our 501(c)3 status, you're relieved of audit and IRS reporting concerns. This frees your time to focus on your project's success and impact.

We pride ourselves on excellent customer service, responding promptly to all requests. Our Fiscal Sponsorship initiative is built on sound fiscal and institutional practices, coupled with exemplary customer service. We continuously refine our internal systems to ensure comprehensive and timely responses.