Frequently Asked Questions

FMW works with nonprofit organizations with a social justice mission to build strong infrastructures, operate effectively, and achieve their missions.  The vision of FMW Nonprofit Solutions is to provide affordable and practical services to nonprofits that will empower them to operate, grow and improve operations and outcomes. 

Fiscal sponsorships offer a number of benefits to new organizations or groups that are considering becoming tax-exempt: 

• It gives the organization a chance to see whether their great ideas have staying power, without immediately incurring the expenses associated with becoming and being a tax-exempt organization.

• It allows organizations to solicit donations and grants while in the process of becoming a tax-exempt organization or while waiting to decide whether to pursue tax exemption 

• It’s a cost-effective way to obtain financial management services 

• For technical and grant application assistance  

• Some insurance coverage included (FMW provides some coverage for all clients) 

FMW offers two types of fiscal sponsorships, often referred to as Model A and Model C. 

• Model A is comprehensive fiscal sponsorship, when the fiscal sponsor takes on full legal and financial responsibility for your organization.  Your organization becomes a sponsored project of FMW.  This relationship allows you to utilize FMW’s tax-exempt status to accept donations and grants, which are tax-deductible to the donor. 

• Model C fiscal sponsorships under FMW are based on an organization receiving a grant that requires financial oversight (may be required by a donor).  An organization, in concert with FMW, obtains a grant; fiscal sponsorship services cover only the administration of that grant.   

FMW also offers limited financial management services to organizations that have obtained tax-exempt status and want to contract for bookkeeping and other services.

• Financial management and oversight, including processing expenses and receiving  revenues.  All funds received on behalf of an organization go to that organization. 

• FMW maintains bank account – organization does not operate a separate account (Model Cs may have separate accounts for funds not related to a grant) 

• Monthly financial reports 

• Assistance setting up donation platforms, to direct donations to your organization 

• Access to Microsoft and other discounted premium services under FMW’s licenses 

• Assistance with grant applications, set-up, management and reporting 

• Templates for various activities (thank you letters, contractor agreements, etc.) 

For organizations that want to seek tax-exempt status, we provide the following assistance: 

• Obtaining Employer Identification Number (EIN) 

• Filing with the Secretary of State in your organization’s state of incorporation; preparing Articles of Incorporation 

• Assistance with putting together Board of Directors and conducting “first” Board meeting. We can provide extensive Board training as needed. 

• Assist with preparing Bylaws and Conflict of Interest forms  

• Assist with preparing and filing application for federal tax-exempt status 

You will do best to pick a fiscal sponsor whose mission fits with yours and whose business is fiscal sponsorship, versus another nonprofit sponsoring as a favor or a side service.  

Some other things to look for:  

• Enters into a written agreement which explains responsibilities on both sides

• Experienced in fund and grant accounting

• Able and willing to provide regular financial reports – at least quarterly if not monthly

• Sufficient insurance in place for the fiscal sponsor and clients 

The National Network of Fiscal Sponsors has prepared “10 Questions Potential Projects Should Ask a Fiscal Sponsor” and you can look at it by following this link:  https://www.fiscalsponsors.org/blog/10-questions-potential-projects-should-ask-a-fiscal-sponsor.

This depends on both your short-term & long-term goals. 

• If you are seeking your own tax-exempt status at the time you sign up with your fiscal sponsor, the relationship will likely last between 6 months and a year.

• If you are holding off applying for tax-exempt status, then the relationship can last several years.

The reasons organizations hold off applying for tax exempt status are varied, from a new organization wanting to see if it is viable, especially for attracting funding to wanting to keep down expenses (software, insurance, accounting).

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