When evaluating a direct model fiscal sponsorship relationship, we encourage you to ask the following questions:

  1. Is the fiscal sponsor leadership familiar with NNFS fiscal sponsorship best practices? These practices reflect the highest operational standards for any organization operating in the public interest.
  2. Does the fiscal sponsor’s exempt purpose allow for the Project activities? Some Project activities may not qualify for fiscal sponsorship under a particular sponsor.
  3. Is there is a written agreement in place that includes detail on fiscal sponsor fees and charges?
  4. Are the fiscal sponsor’s finances stable and can they demonstrate clean audits? You want to make sure you’re doing business with a reputable organization that is going to be around as long as your Project.
  5. Will Project funds be tracked separately? The fiscal sponsor should track each Project’s funds separately.
  6. Will there be regular financial reporting to the Project, including Generally Accepted Accounting Principles (GAAP) and cash?
  7. Will the Project be included in the 990 & audit? As part of the fiscal sponsor’s tax-exempt activities, the Project should be included in the 990 tax return and audited financials.
  8. Does the fiscal sponsor have sufficient policies, procedures and staff capacity to provide responsible fiscal sponsorship?
  9. Does the fiscal sponsor have sufficient liability insurance coverage for your Project’s activities?
  10. Have you identified Project leadership?
  11. Is the fiscal sponsor’s board aware of the fiscal sponsor relationship and associated responsibilities?
  12. Does the fiscal sponsor have a predetermined process for Project separation, should that occur, including how assets and liabilities will be transferred?