Examining the Role and Diversity of Fiscal Sponsors in the Nonprofit Sector

Abstract

This study discusses and documents the role and diversity of fiscal sponsors within the nonprofit sector. Fiscal sponsors provide critical support to nascent nonprofits, yet relatively little is known about which nonprofits elect to become fiscal sponsors, which type of projects and/or organizations do they choose to sponsor, and what costs are associated with sponsorship. We find that Arts and Philanthropic/Grantmaking subsectors are the most frequent home for fiscal sponsors; however, most subsectors house fiscal sponsors. Interestingly, with rare exception, fiscal sponsors charge a non-trivial fee based on revenues raised by the sponsored organization in exchange for administrative support services. The administrative support services provided cluster around financial management (bookkeeping, tax, bill paying). Overall, this study sheds light on an important support function for nascent nonprofits. The study concludes with future research streams that can further our collective understanding of a growing and critical support function for early stage nonprofits.

Keywords

fiscal sponsors nascent nonprofits nonprofit entrepreneurs nonprofit capacity

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