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Fiscal Sponsorship Agreement
Define responsibilities and funding terms with this Fiscal Sponsorship Agreement Template.
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Fiscal Sponsorship Agreement Template
This Fiscal Sponsorship Agreement (“Agreement”) is entered into on [Date], by and between:
Sponsor Organization: [Full Legal Name, Tax ID, Address]
Project: [Project Name / Description]
Represented by: [Project Director Name, Contact Information]
Together referred to as the “Parties.”
1. Purpose
The Sponsor agrees to provide fiscal sponsorship services to the Project, enabling it to receive tax-deductible donations and grants, subject to compliance with nonprofit laws and this Agreement.
2. Responsibilities of Sponsor
The Sponsor shall:
Accept and administer charitable donations on behalf of the Project.
Provide financial and administrative oversight.
Ensure compliance with applicable tax-exempt and nonprofit regulations.
Issue tax receipts to donors.
3. Responsibilities of Project
The Project shall:
Operate in line with the Sponsor’s charitable mission.
Provide timely financial and activity reports.
Use funds exclusively for approved charitable purposes.
Comply with all Sponsor policies, including recordkeeping and expenditure rules.
4. Handling of Funds
Donations received for the Project shall be deposited into a restricted account maintained by the Sponsor.
The Sponsor shall disburse funds to the Project in accordance with approved budgets and requests.
The Sponsor may deduct an administrative fee of [X%] to cover overhead.
5. Term and Termination
This Agreement shall remain effective until terminated by either Party with [X days] written notice. Upon termination, any remaining funds shall be used in accordance with nonprofit laws and the Sponsor’s charitable mission.
6. Liability and Indemnification
The Project shall indemnify the Sponsor against claims arising from the Project’s activities, except for matters caused by Sponsor’s gross negligence or willful misconduct.
7. Governing Law
This Agreement shall be governed by and construed under the laws of [State/Country].
8. Entire Agreement
This Agreement represents the entire understanding between the Parties and supersedes all prior agreements, written or oral.
Signatures
Sponsor Representative: _____________________ Date: _________
Name/Title: ____________________________________________
Project Director: ___________________________ Date: _________
Name/Title: ____________________________________________
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Fiscal Sponsorship Agreement
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For quick answers, scroll below to see the FAQ.
FISCAL SPONSORSHIP AGREEMENT FAQ
What is a Fiscal Sponsorship Agreement?
A Fiscal Sponsorship Agreement is a contract between a nonprofit (the sponsor) and a project that lacks tax-exempt status, allowing the project to receive tax-deductible donations under the sponsor’s oversight.
Why is a Fiscal Sponsorship Agreement important?
It provides access to charitable funding for projects without 501(c)(3) status, while ensuring compliance with IRS regulations. It also clarifies responsibilities, reducing risks of mismanagement or legal disputes.
When should you use a Fiscal Sponsorship Agreement?
Use it when a project seeks funding and charitable legitimacy but is not yet incorporated or recognized as tax-exempt. It is common for start-up nonprofits, community initiatives, and pilot programs.
What should a Fiscal Sponsorship Agreement include?
It should define the sponsor’s responsibilities, project oversight, donation handling, fund disbursement, reporting requirements, termination rights, and compliance with nonprofit law.
What are the types of fiscal sponsorship?
The two most common models are:
Comprehensive (Model A): The project becomes an internal program of the sponsor.
Pre-Approved Grant (Model C): The sponsor re-grants funds to a separate entity running the project.
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