Fiscal Sponsor Facts and Stats
All 256 sponsors in the directory answered a 10-question survey asking about their experience, eligibility requirements, fee structure, services and philosophy — enough information that prospective projects can get a feel for which fiscal sponsors might make a good fit for them.
The Directory, launched Nov. 19, 2008, has grown to be the largest database of essential information about individual fiscal sponsors; it includes most major players and an increasing number of sponsors with only a few projects.
These sponsors operate in 37 states, Washington, D.C., and Ontario, Canada. California has the most, 94, more than a third of the total.
Community foundations comprise 4% of the fiscal sponsors in the directory.
Public Health Solutions is the most experienced fiscal sponsor in the directory — since 1957 — and sponsors three projects now. Third Sector New England started two years later and sponsors 59 projects today.
Fractured Atlas in New York City is the largest fiscal sponsor with almost 4,000 projects as of September 2017. It operates only online and practices only Model C fiscal sponsorship.
GROWTH: Mirrors the rise of nonprofits
Before the 1950s, only 152,000 501(c)(3)s were operating in the United States. The pace picked up in the 1970s and ’80s, adding roughly 190,000 new nonprofits in each decade. But numbers of brand-new nonprofits almost doubled — to 372,000 — in the 1990s. In 2017, GuideStar’s database had information on more than 1.8 million U.S. nonprofits.
Fiscal sponsorship, on a much smaller scale, has followed that trajectory. Starting in the late 1960s and into the 1970s, when community programs began to soar as the free-services-for-all concept took hold in California and spread throughout the nation, the need for cost-efficient financial management grew, and the business model gained currency.
New fiscal sponsors jumped in the 1990s. That’s when 44 of the sponsors in this directory — more than double the number of startups in each of the previous two decades — took on their first project. The pace of new fiscal sponsors has accelerated, with 151 of Directory participants, or 59%, forming since 2000, a percentage that has been rising as the Directory continues to add fiscal sponsors.
SCOPE: 13,632 projects
The role of the fiscal sponsor has taken off. Though the numbers of fiscal sponsors and the projects they host are minuscule compared with the vastness of the nonprofit sector, fiscal sponsors are an important factor in the increasing quality of nonprofit management, a trend widely acknowledged as awareness of fiscal sponsorship’s benefits spreads throughout the sector.
These 256 fiscal sponsors are home to 13,632 projects, almost a third of which are housed at Fractured Atlas. An educated estimate suggests these sponsors manage charitable funding of up to $1 billion. The majority of sponsors in the Directory are of modest size. About a third (34%) of the agencies sponsor 1 to 5 projects, 13% sponsor 51 to 100 projects. The 10 largest collectively sponsor 6,670 projects, 49% of the projects represented in the Directory.
A hidden efficiency for nonprofit board development is suggested by the projects-to-sponsor ratio, which is 53 to 1. This means more than 13,000 community organizations in the country didn’t need a board of directors. Projects come under their fiscal sponsor’s board of directors so they don’t need a board of their own to operate. This takes pressure off the pool of volunteer professionals across the country. A truism of community service is that many board members wear multiple nonprofit hats. If each of the 13,000-plus projects had to have its own board of directors, more than 130,000 civic-minded people in communities across the country would have to stretch themselves ever thinner.
ELIGIBILITY: Aligned mission and geography are key
Fiscal sponsorship must be largely a labor of love, because 22 or 86% of the sponsors in the Directory say “aligned mission/values” is chief among their eligibility criteria. The second most-cited eligibility criterion is “geographic,” with just under half of the sponsors requiring their projects to operate nearby, in the same metropolitan area, county, state or region.
PROJECTS: Arts is tops
There is some specialization among fiscal sponsors in terms of their projects’ services, but, not surprisingly, arts and culture, hands-down, is the most popular project category, with 188 — 73% — of the sponsors willing to take them on. And of these, film and video projects are a major subcategory. Education is the next largest category of service with 156, followed closely by youth development at 140, and children, youth and families at 135, a snug third.
FEES: Most charge 5%-10%
More than half of fiscal sponsors say they charge a flat fee, and 42% of the total are in the 5%-10% range. Also, of those with sliding-scale fees, almost two-thirds charge 5%-10%, usually depending on a project’s revenues. Thirty sponsors will charge 12% or more to handle government-funded projects, which can require adhering to higher federal audit standards. What mostly accounts for the disparity in fees is the range of services a sponsor provides.
SERVICES: Spectrum of assistance
Attorney Gregory Colvin’s Fiscal Sponsorship: 6 Ways to Do It Right, published in 1993 with an expanded and updated edition in 2005, a Kindle edition in 2015 and a 3rd Edition due in 2018, is the most significant publication in the field. Colvin’s book has had great impact on fiscal sponsorship. It changed the nomenclature of the field — from “fiscal agent” to “fiscal sponsor” — helping the culture of fiscal sponsorship evolve. The term “fiscal sponsor” has helped to professionalize the management model from the days decades ago of “fiscal agency,” when the relationship was called “a trap for the unwary” funder.
These highlights from the fiscal sponsors in the Directory were updated in September 2017.