State of the Space
“I’ve worked for organizations that just have one area of focus,” says Elisa Perez, communications manager of Community Initiatives, an Oakland-based fiscal sponsor. “And while it's very rewarding, there's only so much you can say about a specific topic. But one of the benefits for me in working in fiscal sponsorship is that there are so many different issues I get to advocate for. I can really help people make a difference in different kinds of communities and with different kinds of issues.”
In conversations with leaders in the field of fiscal sponsorship, this is a sentiment that comes up again and again. Fiscal sponsors are behind-the-scenes actors who play a role in creating positive change across a slew of sectors. Or, as Sarah McCann of Fusion Partnerships put it, in fiscal sponsorship, “there’s always something new.”
Spreading the Word
When Mamie Funahashi, VP of Executive Partnerships at Community Initiatives, first started working in this field, she didn’t even know what fiscal sponsorship was. Now she sees it as an essential tool for people who have a desire to make a difference in their community, but lack the infrastructure or experience to build out an organization.
“For example, if you wanted to start a nonprofit, most people are overwhelmed because there are so many compliance steps,” she explains. “What we do is we provide a home — you come under our umbrella.”
Informing changemakers that fiscal sponsorship exists and educating them on how to find a partner is one of the sector’s biggest challenges. Most fiscal sponsors still rely on word of mouth or on recommendations from funders or attorneys. As the field grows and evolves, that casual strategy won’t be enough. This is where relationships come in.
“It’s something that we've been trying to address for years now,” she continues. “You go to the source, which is the funders. That's where the money is. If they want to fund a good idea, but the person that they're working with doesn't have the structure, then the first thing they can say is, ‘Hey, go to this reputable fiscal sponsor.’ It's a nonprofit in a box that you're getting. That establishes trust.”
“Growing up, I actually used a lot of services that were fiscally sponsored,” she says. “I didn't know it at the time, but having grown older I was like, ‘Oh my gosh, that's why that afterschool program was available to me.’ The impact of fiscal sponsorship is huge. And it's not something that many people know about.”
– Elisa Perez, Communications Manager of Community Initiatives
Theresa Hubbard was an artist who graduated at the height of the 2008 financial crisis. She decided to enter the nonprofit space and eventually took a job as a part-time administrative assistant at Fractured Atlas, a fiscal sponsor that specializes in the arts. Twelve years later, she is the CEO.
Up to this point, Fractured Atlas has also relied mostly on word of mouth, but they hope that changes in the future.
“Getting the word out otherwise is pretty challenging,” says Hubbard. “One of the things that we're looking to do is partner with other arts-based institutions or service organizations that don't necessarily provide fiscal sponsorship, but can spread the word: Fiscal sponsorship is an opportunity for you to have control over your business and have more access to financial resources.”
Another way organizations and individuals find Fractured Atlas is via funders who require a fiscal sponsor to dispense grants. Many artists do need support to manage large amounts of funding, but it can sometimes feel like an unnecessary roadblock between the money and the creator. This is where fiscal sponsors need to prove their worth.
“That's not ideal for us,” says Hubbard. “That is setting fiscal sponsorship up as a barrier to getting funding that you are already awarded. We're interested in changing this narrative about fiscal sponsorship being that barrier and instead being a part of your business strategy that allows access to financial resources.”
That messaging can be done by speaking at conferences, building partnerships, and creating educational resources that can be distributed in the spaces where artists convene. That is all on the docket going forward.
Fiscal sponsors also need to toot their own horn a little bit.
“I think we've also had to accept that Fiscal Sponsorship itself is not a very buzzworthy thing, even if our projects get in the news and media,” says Perez of Community Initiatives. “Our name always gets dropped off or the relationship gets dropped off. But I think if we were to find a happy medium of harnessing our partnerships to help us get the word out about how we help make this work possible, that could also really help us.”
Beyond the Back Office
That messaging needs to cover all the logistical benefits of fiscal sponsorship, but it also should underline the other upsides of the arrangement. These organizations can offer more than just back-office support: the best fiscal sponsors are true partners who have a wealth of experience to share.
“I was working with a social entrepreneur who had a really hard time getting funding and a really hard time getting the right type of clients to access the services she was offering,” recalls Perez. “So I met with her and I realized that, first of all, the name of her project and the way she spoke about it was very clinical. It wasn't accessible.”
Perez helped that client come up with a new name. She reworked the entrepreneur’s elevator pitch to make it more clear and approachable. It worked. The entrepreneur started getting funding, she started getting kids and families to access the free health care she was providing.
“Here's this amazing person who is just very deep in the work, but sometimes needs that thought-partnership,” notes Perez.
And while some people view fiscal sponsorship as an incubator and assume that once the project becomes established, it will no longer need a fiscal sponsor, the field has evolved in the last five to 10 years to support projects at all stages.
While some fiscal sponsors have a sector they focus on, Fusion has a geographic mission, with 95 percent of their fiscally sponsored programs based in Baltimore. Sarah McCann actually came close to being a fiscally-sponsored project with Fusion before taking a job with the organization three-and-a-half years ago. She was inspired by the impact she could have in her community.
“It's the piece that makes all the other pieces happen,” she says.
Fusion targets community leaders, grassroots initiatives, and BIPOC-led projects in areas such as arts & culture, reentry, and food justice. McCann came from the world of fundraising so she knows how impactful a fiscal sponsor can be.
“I have seen projects that have never raised more than $10,000 get six-figure gifts,” she says. “I think it’s because [funders] know that, with a fiscal sponsor, they can manage such a big jump in funding. And I think Fusion’s special role in Baltimore infrastructure is really being able to move city dollars, state dollars or federal dollars into grassroots programs hands so that they can do the real work.”
Growing Pains
As the field of fiscal sponsorship expands, so do the potential pitfalls. Not every organization might be up for navigating the challenges of taking on fiscal sponsors. This means it’s important for potential clients to be discerning.
“I really think that education is going to really be key to broaden the sector,” says Funahashi. “Fiscal Sponsorship is not governed by law, it's governed by contracts, right? There aren't any rules and regulations regarding 'this is how you do fiscal sponsorship correctly.' Each fiscal sponsor is so different and you have to look at the Fiscal Sponsorship Agreement to understand what services you're going to be receiving. Maybe coming up with standards would be a good way to elevate the field.”
Funahashi thinks that is a role that NNFS could play — creating a guidebook for practitioners in order to improve the quality of services across the board and establish a set of core values. With NNFS’ reach, they can help codify what makes a quality fiscal sponsor.
“Anyone can do fiscal sponsorship, which isn't great because then it's hard to delineate who is the quality sponsor,” she adds. “Fiscal sponsors fail. Big ones fail. So how do we as a sector help those organizations that are struggling? I think that's going to be really important to stabilize the field.”
“If a fiscal sponsor doesn't provide any kind of check-in or capacity-building technical assistance support, that’s a red flag,” adds Perez. “Because the whole point of this — at least with comprehensive fiscal sponsorship like the ones that Community Initiatives offers — is that we want you to succeed. This is a partnership and we take it seriously.”
At Fractured Atlas, they talk a lot about making sure that fiscal sponsorship serves as a bridge and not a barrier between their artist clients and the funding they need.
“I see fiscal sponsorship as being a pretty powerful tool for equity,” says Hubbard. “It is opening doors to people who otherwise don't have access to financial resources. The challenge with that is that it also exists to perpetuate inequitable systems. We have to be able to talk about that, for one, because fiscal sponsorship does allow access to capital that is not widely accessible and gate-kept by the government.”
“We have an exceptional opportunity to help grassroots organizations and to help emerging organizations that are popping up in the equity space to get their movements moving,” she continues. “I think we also have a really special position in between those who are doing the work and those who are funding the work.”
The Reward
The people who work in fiscal sponsorship know the difference they are making, even if the rest of the world doesn’t. For Perez, entering this field opened her eyes to how fiscal sponsorship had impacted her life — even before she knew what it was.
“Growing up, I actually used a lot of services that were fiscally sponsored,” she says. “I didn't know it at the time, but having grown older I was like, ‘Oh my gosh, that's why that afterschool program was available to me.’ The impact of fiscal sponsorship is huge. And it's not something that many people know about.”
“Every time there is a crisis in the world happening, people really do show up,” she adds. “So I feel like no matter what happens, fiscal sponsorship will continue to be needed. I feel like we just help ignite that power within them. They don't have to worry about all of the jargon and the red tape. We are their partner in fighting the good fight.”
Hubbard from Fractured Atlas echoes that sentiment.
“[It means so much] every time people invite us to their events or are celebrating the fact that they got a grant,” she says. “These are the moments that keep me in this field because it can get taxing and the nonprofit system can really be demoralizing at times. When you have those genuine moments of celebration and pride that comes from the artists, that's all you need to keep going.”
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