Expanding access to funding for creative work.
The Arts + Business Council provides fiscal sponsorship to eligible arts projects, independent films, and documentary media projects.
Fiscal sponsorship is a contractual arrangement in which a 501(c)(3) nonprofit organization can bring a project under its umbrella to receive donations and grants in support of a project or activity related to the mission of the nonprofit organization.
An alternative to starting your own nonprofit, or by using a fiscal sponsor while waiting for your organization’s determination to come back from the IRS, Fiscal Sponsorship allows projects to seek grants and solicit tax-deductible donations under the fiscal sponsor’s tax-exempt status.
Using a fiscal sponsor, a non-exempt individual, project, or organization can receive many of the benefits of a tax-exempt nonprofit organization without being one.
Legally, any existing tax-exempt nonprofit organization may act as a fiscal sponsor, but due to the legal complexity and administration required, not all nonprofits will do so. If you’re looking for a fiscal sponsor, it’s best to partner with an organization with which you already have a strong relationship and/or one that has an existing fiscal sponsorship program.
Organizations also offer different types of sponsorship agreements and/or relationships, so be sure to do your research on what will be the best fit for your project.
The Arts + Business Council provides Fiscal Sponsorship under the Pre-Approved Grant, or Model C, arrangement. In this relationship, the sponsored project remains a separate legal entity whose purpose is aligned with the Arts + Business Council’s mission, and we strongly suggest that most projects be incorporated in the state of Tennessee, most often as an LLC/nonprofit organization.
In the Model C relationship, a fiscal sponsor:
Qualifies the project for some grants and funding that would otherwise be inaccessible;
Accepts and safeguards charitable donations in a restricted fund on behalf of a project;
Takes on legal liability for those funds;
Creates and maintains some accounting records for the project;
Commits to timely reporting on the restricted project funds to your project leaders;
Communicates as necessary and appropriate with your project’s donor(s), institutional grantmakers, or funding agency(ies) in ways that supplement your project leader’s communications;
and
Brings experience to the project and may provide additional aids such as administrative services and/or strategic planning assistance.
Fiscal sponsorship is a good solution for organizations (or certain individual projects or events) that only want to do a few small projects over a specified period of time, those that don’t have the time or staff for a lot of organizational administration, or those who need to be able to receive tax-deductible donations while they wait for separate 501(c)(3) nonprofit status approval from the IRS. Of note, in a Model C relationship, the sponsor only funds projects to the extent that the project is able to raise its own funds.
No. Receiving fiscal sponsorship from the Arts + Business Council does not make your project a nonprofit or charity. Fiscal sponsorship is intended for organizations waiting for their 501(c)3 determination, a one-time project like a film or documentary, or projects that are organized in a way where it doesn’t make sense to become a separate nonprofit. Under fiscal sponsorship, the project will still be liable for its own tax reporting. Consult with a tax professional to determine what type of tax filings may be appropriate.
No. Your project or organization is a separate legal entity and is not an agent or legal representative of the Arts + Business Council. Your project is responsible for its own tax filings and owns its own work products and equipment. Project staff or volunteers do not work for the Arts + Business Council. The project is a part of the Arts + Business Council only in the sense that the Arts + Business Council provides enabling support for your project to receive funds that would otherwise be inaccessible, as well as some training, educational resources, and administrative guidance.
Though the donated funds are the legal responsibility of the Arts + Business Council, the project remains a separate legal entity and retains ownership of all of its work products and outcomes. Any tangible or intangible property, including copyrights, obtained or created by the project is the sole property of the project.
Your project is an independent entity acting under fiscal sponsorship of the Arts + Business Council. After you notify us of the potential funding source(s) you intend to approach, and at the appropriate time in the application process, the Arts + Business Council will prepare a letter to the funder confirming the sponsorship and provide any other information they require. Generally, this type of information is sent along with a full proposal, not with initial inquiries.
Don’t wait until the last minute to tell us you need the letter or other materials for the funder you are approaching with a full proposal. We request at least two weeks of advance notice. However, when a funder asks for your organization’s budget, financial statement, Board of Directors, or other materials – what they really want is your information, not the Arts + Business Council’s.
The Arts + Business Council’s program is designed for projects and organizations that advance our mission to create a thriving, sustainable creative culture in greater Nashville. A sponsored project’s activities must be primarily based in Tennessee. The Arts + Business Council can sponsor sole proprietorships, nonprofit corporations without 501(c)(3), or single-member LLCs that meet all other eligibility requirements. We will not manage funds on behalf of for-profit corporations (S and C corps) or S, C, or P classification LLCs.
In addition to fundraising for your project, there are a few other requirements for being a fiscally sponsored project, including but not limited to:
Manage your project’s tax, HR, filing, and liability issues
Properly recognize the Arts + Business Council as your fiscal sponsor on all fundraising and marketing materials, including your website and social media
Provide the Arts + Business Council with all communication with funders (proposals, letters of inquiry, etc.) for approval
Provide detailed financial information to support all requests for funds
Provide the Arts + Business Council with quarterly narrative reports about your project activities
File any grant reports or other funding documentation and requirements in advance of the funder’s deadlines
Inform the Arts + Business Council promptly of changes in project or contact information
Respond to Arts + Business Council requests in a timely manner
Act as a good steward of the Arts + Business Council and Greater Nashville’s creative community.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
Your project must document and send information about its activities to the Arts + Business Council as you would for any other funder because the Arts + Business Council has assumed liabilities to the IRS about the nature of your project. The Arts + Business Council maintains records that document its oversight ensuring that your project is furthering our charitable mission and purpose. The only way that we can maintain those records is if you keep us apprised of your activities.
