Fiscal Sponsorship is a fundraising tool that provides an alternative to establishing your own 501 (c)(3) nonprofit corporation in order to access funding for your non-commercial project from various grant-making organizations that require nonprofit status from its applicants. The funding, when received, is given to this nonprofit, tax-exempt umbrella organization. This organization, acting as the filmmaker’s fiscal sponsor, administers and accounts for funding on behalf of the filmmaker and his or her project.
The fiscal sponsor is legally responsible for the funds received on behalf of sponsored projects. It must insure that the funds are used for the activities/work agreed upon by the donor and the recipient, and that the donor reporting requirements are met in a timely fashion.
While fiscal sponsorship can save you from the long and arduous process of becoming a 501 (c)(3) nonprofit tax-exempt organization and broadens your funding options, it is important to note that fiscal sponsors do not provide funding themselves, and do not research and apply for grants on behalf of a project or filmmaker.