Alternative Funding Rarely Addressed on the Internet

1. Alternative Funding Rarely Addressed on the Internet Why Would You Want a Fiscal Sponsor? Link: Although some foundations and other funding agencies give money to individuals, many funders state in their guidelines that they will only fund projects which are administered by non-profit corporations which are exempt from federal taxes under Internal Revenue Code Section 501(c)(3). The reason for this requirement is that the Internal Revenue Service determines which charitable contributions are tax-deductible Alternative Funding. Most donors prefer to give to corporations that have been granted tax-exempt status under Internal Revenue Code Section 501(c)(3), because then the donors can be certain that they will be able to take a charitable deduction for their gifts on their federal income taxes. If you have a project that fits a foundation's guidelines, but you do not have your own non-profit corporation, do not give up hope. You may still be able to apply for these restricted grants if you can find a non-profit organization that is willing to serve as a "fiscal sponsor" for your project. What Is A Fiscal Sponsor? A "fiscal sponsor" is a tax-exempt corporation that agrees to receive and disburse the funds for your project. There are many organizations that offer this service sometimes schools, arts organizations, or other local community groups will sponsor your projects. How Do Fiscal Sponsorships Work? First, you and the sponsor need to sign a letter of agreement about the terms of the sponsorship. Since the donors will be making their checks out to the fiscal sponsor, you need to be certain that you have a written promise from the sponsor that they will give you the funds that are donated for your project. You also need to fully understand any fees or commissions that the sponsor plans to charge. The sponsor will want a promise from you that you will not do anything that will jeopardize their 501(c) (3) status. This means that your project must be "organized and operated for charitable purposes" (i.e. not a for-profit venture). You are allowed to earn a fair salary for your work on the project, but investors are not allowed to make a profit from the project. Also, there are limitations on lobbying activities, and non-profit corporations are not allowed to participate in political campaigns for individuals. Once the sponsorship agreement is in place, the donors can make their checks out to the fiscal sponsor. The sponsor deposits the checks and issues thank-you letters to the donors for their tax records. As the project moves forward, the sponsor reimburses the artists for expenses, maintains the books, and prepares any needed tax forms. Usually the sponsor deducts a small percentage of the total donations

2. as a service charge for handling the sponsorship. Sometimes there are additional fees to set up the sponsorship. The important thing to remember is that the sponsoring organization becomes legally and financially responsible for your project when they agree to sponsor you. Although it does not have to be difficult or complicated, a sponsorship is a legal relationship that needs to be taken seriously by everyone involved. Most sponsors will ask you to file periodic progress reports, and it is extremely important to have clear and open communication. It is usually more convenient to select a sponsoring organization that is geographically close to you. As I have mentioned, the grant process is not unlike any other business transaction dealing with 1000's of dollars. If you would like more information on the true steps of receiving a non-repayable grant. Visit our site and take a free 7 days to go through the program before you decide. Think of us as a distant learning company, staffed with one on one help and a website with full audio explanations and highly informational examples. Give us try, we are here for you. [http://www.grantfundsnow.com] Thank You, Ed Birmingham