Glossary
Terms related to fiscal sponsorship and nonprofit management.
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501(c)(3)
A section of the United States Internal Revenue Code that provides tax-exempt status to nonprofit organizations. Organizations with 501(c)(3) status are eligible to receive tax-deductible donations and grants.
C
Compliance
Adherence to legal and regulatory requirements related to nonprofit operations, including tax laws, reporting obligations, and other governmental regulations. Fiscal sponsors assist sponsored projects in maintaining compliance with relevant laws and regulations.
Capacity Building
Activities aimed at strengthening the organizational capacity and effectiveness of nonprofits. This may include training, technical assistance, strategic planning, board development, and other initiatives to enhance the capabilities of the sponsored project.
E
Exit Strategy
A plan developed by the sponsored project and the fiscal sponsor to transition the project to independent status. This includes steps for obtaining its own tax-exempt status or finding an alternative fiscal sponsor if necessary.
F
Fiscal Sponsorship
A legal relationship in which a nonprofit organization, known as the fiscal sponsor, provides financial and administrative support to another organization or project that lacks 501(c)(3) tax-exempt status.
Financial Management
The oversight and management of financial activities, including budgeting, accounting, financial reporting, and financial analysis. Fiscal sponsors provide financial management support to sponsored projects, ensuring proper fiscal stewardship.
G
Grant Management
The process of seeking, securing, and administering grants.This includes researching funding opportunities, preparing grant proposals, managing reporting requirements, and ensuring compliance with grant terms and conditions.
H
Human Resources Support
Assistance provided in managing human resources-related matters, such as recruitment, staff management, employee benefits, and compliance with employment laws.
L
Legal Assistance
Guidance and support related to legal matters, including governance, contracts, intellectual property, liability, and risk management. Fiscal sponsors offer legal assistance to help sponsored projects navigate legal complexities and ensure compliance.
N
Nonprofit Organization
An organization that operates for the benefit of the public or a specific cause, and its primary objective is not to generate profit. Nonprofits serve various purposes, including charitable, educational, religious, scientific, and more.
P
Program Support
Assistance in carrying out programs and activities. This may include project planning, implementation support, monitoring, evaluation, and outcome measurement.
R
Reporting
The process of providing regular updates and financial reports to donors, regulatory agencies, and other stakeholders. Fiscal sponsors assist sponsored projects in preparing and submitting accurate and timely reports.
S
Sponsored Project
The organization or project that seeks fiscal sponsorship and receives support from the fiscal sponsor. The sponsored project operates under the fiscal sponsor’s tax-exempt status and benefits from its administrative, financial, and legal infrastructure.
Sponsorship Level
The tier or level of fiscal sponsorship chosen by the sponsored project, which determines the extent of support and services provided by the fiscal sponsor. Different sponsorship levels may offer varying levels of assistance and involvement.
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