How Our Fiscal Sponsorship Program Works
Rose Foundation executes a fiscal sponsorship grant agreement with select projects. Donations earmarked for a project operating under Rose’s sponsorship are actually given to the Foundation. This allows donors to receive the full benefits of making a charitable donation. Rose then places the donations in a special restricted fund dedicated to the project.
Governed by the fiscal sponsorship grant agreement, Rose uses the restricted fund to disburse grants to the project. The project provides regular reports to document its activities and expenditures. To defray the expenses associated with administering fiscal sponsorship, the Foundation charges a 7% on all fiscal sponsorship donations received. Because of the significantly increased complexities of administering governmental grants and contracts, the Foundation charges a 10% fee on government grants.
Legally, the project is a separate entity from Rose. The project owns its own work product, and intellectual and tangible property. It hires and supervises its own staff, and is responsible for direct financial management. This requires each project to develop the capacity to take responsibility for its own administration, direction and destiny.
Facilitate Tax-Deductible Support
The Rose Foundation’s primary role is to facilitate charitable support for the project. To enable charitable support, Rose creates a special restricted fund for the sole purpose of funding the project’s activities. Rose executes a grant agreement with the project specifying that all funds received by Rose will be granted to the project as long as the project meets all obligations of the grant agreement and those imposed by funders. Rose assumes liability to the funding source (typically executing a grant agreement with the funder) that the work will be substantially carried out as described in the grant application. Since the project is not a 501(c)(3), Rose assumes liability to the IRS for the charitable nature of the activities. However, the project is responsible for its own tax filings.
Build Project’s Organizational Capacity
Rose’s secondary role is that of consultant, coach and resource.
Some examples of services offered by Rose:
If a project needs advice in building a board or conducting strategic planning, Rose has extensive experience in these areas.
Rose is ready to play a mentoring role in fundraising. We can help develop a fundraising plan, target foundations and provide constructive criticism on draft proposals, though we won’t generate specific fundraising materials.
Many projects need help setting up accounting procedures. Rose provides practical fiscal management advice that is geared to th
Our Fiscal Sponsorship Services
The following services are included as part of the fiscal sponsorship relationship, and are covered by the basic 7% sponsorship fee (10% for governmental funding).
Rose provides ongoing, informal consultation on project focus, strategy, organizational development, fundraising and more, as needed by the project. Rose provides each project with a contact person who can answer questions as they arise.
Cash Management & Accountability
Rose processes all deposits from donors/funders, and provides notification to projects of funding received. Rose sends acknowledgements to donors/funders and provides an annual report to sponsored projects based on Rose’s annual audit. Rose uses the donations to enable lump sum grants to the project. The project then pays its own bills, staff, vendors and contractors. Rose can assist in setting this up if needed.
Quarterly reports from projects are reconciled with Rose’s books. Any discrepancies are flagged and collaboratively solved. Sponsored projects generally hold their own assets. Rose can assist projects to develop balance sheets, budgets, profit/loss statements and other tracking mechanisms if needed. If Rose holds some portion of project assets, these are tracked and reported through Rose’s regular accounting and audit mechanisms.
Rose complies with all state and federal reporting requirements related to the receipt of donations and disbursements to the project. Depending on the project’s legal status, it may be required to report the fiscal sponsorship grant income on the appropriate IRS and state tax forms (990, 1040, etc.). Projects are also responsible for their own payroll reporting. Rose can refer projects to CPAs for advice if needed.
Rose’s outside audit is conducted by Levy & Powers, CPA. Projects are shown as a line item in the audit.
Before a project submits a grant proposal to a foundation or business, Rose reviews it for programmatic and legal consistency with the fiscal sponsorship grant contract, and offers editorial and strategy assistance as requested. A letter of support and additional documentation is prepared as needed for every application. Rose then executes grant agreements with funders as required.
Projects are responsible for generating grant reports to Rose and to all funders, and are required to maintain their own reporting calendar. Rose works with projects to document compliance with all funder requirements.
Rose reviews all donor solicitations for legal compliance and offers editorial and strategy assistance as requested.
Projects are separate legal entities and may enter into contracts. Rose provides advice and reviews contracts as requested, and can offer contract templates.
Training and Information
As requested by the project, Rose will offer accounting, budgeting and/or administrative training. Referrals are provided to non-profit specialists as needed.
Rose provides advice on lobbying regulations and compliance, including identification and utilization of ‘safe harbors.’ If projects want to engage in significant lobbying, Rose provides specific educational materials outlining what is allowed, and disallowed, by 501(c)3s. Advance permission is required to do any lobbying. Projects must track and report lobbying activities and expenditures as part of the overall reporting process. Rose will help design tracking systems as needed.
Copyrights and Trademarks
Projects own all of their own intellectual property and copyrights. Rose can refer to attorneys who specialize in copyright/trademark law.
Projects hire and supervise their own staff. Advice and resource referrals are available on all personnel issues as needed. Rose can provide referrals to payroll services, health insurance, and retirement plan providers that specialize in non-profit coverage. Projects are responsible for payroll taxes and filings for their staff.
Obtaining Tax-Exempt Status
Rose works collaboratively with projects and their funders when projects are terminating or transitioning to independent 501(c)(3) status. We have experience and offer resources and referrals about how to start a nonprofit corporation and receive tax exempt status from the State of California and the federal government.