The Ecology Center serves as the fiscal sponsor of a number of local organizations that are pursuing missions in alignment with our own. Currently, we sponsor:
What is fiscal sponsorship?
Many funders prefer to fund organizations that have been legally designated by the IRS as a 501(c)3. Section 501(c)3 is the tax law that grants exemption from the federal income tax to nonprofit organizations that exist for religious, charitable, scientific, literary, or educational purposes, among others. The Ecology Center has been a designated 501(c)3 nonprofit organization since 1970.
There are two ways to be legally recognized as a 501(c)3: to incorporate and apply to the IRS for 501(c)3 status, or to request fiscal sponsorship from an established nonprofit organization like the Ecology Center. Fiscal sponsorship can be a cost-effective arrangement that enables grassroots groups to focus on developing and expanding their programs, rather than on legal and accounting concerns.
As a fiscally sponsored project, a group can use the Ecology Center’s 501(c)3 nonprofit status for fundraising purposes. In addition, the Ecology Center provides insurance and a wide range of administrative services that allow a fledgling project to focus on their programmatic goals while meeting their legal requirements. Projects often seek fiscal sponsorship as a means to raise the profile of their work through affiliation with an established organization with a solid reputation.
Administrative Services the Ecology Center Offers
The Ecology Center charges an administrative fee to its fiscally sponsored projects of 10-15%. In return, the Ecology Center provides financial management, including accounts payable, accounts receivable, bookkeeping, monthly financial reporting, sales tax filings, annual financial audit, and IRS 990 filing. We maintain our 501(c)3 status with the IRS and the State of California and fulfill HR functions such as payroll services, administration of group medical and dental plans, accrual and tracking of sick and vacation time, and management of 401K, annual W4/1099 preparation, EDD, wage garnishment, workers comp insurance, personnel policies, COBRA, and EEO. The Ecology Center provides insurance for all our fiscally sponsored projects, including general liability, property liability, automotive (if necessary), directors and officers insurance, ERISA, and employee dishonesty insurance. Lastly, the Ecology Center promotes the work of our fiscally sponsored projects in a variety of ways and provides meeting space when needed.
The Fiscal Sponsorship Relationship
Fiscally sponsored projects are able to receive charitable donations and grants available only to tax-exempt organizations. The Ecology Center is legally and financially responsible for all the Ecology Center’s fiscally sponsored projects and activities. The Ecology Center’s fiscally sponsored projects are nonprofits and have 501(c)3 tax-exempt status. All Ecology Center projects abide by strict federal regulations governing nonprofits, such as limits on lobbying and political activities, and compliance with the Ecology Center’s personnel policies. The Ecology Center Board of Directors is responsible for all legal, taxation, and regulatory issues for projects. Projects often also have their own advisory boards, which are designated caretakers of their project’s mission, responsible for strategic planning, program oversight, fundraising, outreach, and assistance to and review of the project director. Projects are responsible for their own fundraising; the management of their work plan; and the hiring, firing, and supervision of their own staff. The project owns the copyrights, intellectual property, and trademarks that derive from their work.
Eligibility Requirements for Fiscal Sponsorship
The most fundamental eligibility requirement is that the mission and activities of your project are in alignment with the Ecology Center’s mission, which is to promote environmentally and socially responsible practices through programs that educate, demonstrate, and provide direct services. Applicants must have an operations and fundraising plan. The ideal candidate will have raised a minimum of $25,000, although we do make exceptions. The Ecology Center does not provide fiscal sponsorship to individuals, for-profit entities, and projects with international activities but no office located in the US.
Fiscal Sponsorship Application Process
To apply for fiscal sponsorship, you must submit a complete application. For application guidelines, download the application pdf. After submission, your application materials will be reviewed by Ecology Center staff directors and presented to the Ecology Center board for review. Key staff from your group will be invited to a brief meeting with the Ecology Center board. Afterwards, the board will vote to approve the fiscal sponsorship, based on mission fit, organizational capacity, funding capacity, a review of the key players, and an assessment of the Ecology Center’s capacity to take on new projects at that time. The process from application to approval will take an estimated 30-60 days, although the process can be expedited under extenuating circumstances.
