Skip the Nonprofit Paperwork (For Now)
I get asked about starting nonprofits constantly. My first question back is always: “Have you considered fiscal sponsorship?”
Here’s why I bring it up: I’ve watched too many brilliant people spend months drowning in 501(c)(3) paperwork while their actual mission sits on the back burner. Meanwhile, similar projects under fiscal sponsors are already fundraising and making an impact.
In this particular moment, immediacy and discretion may be your top priorities. Fiscal sponsorship may help with that.
The setup is straightforward: An existing nonprofit becomes your administrative backbone. They handle the tax-exempt status, financial oversight, and compliance headaches. You focus on the work that actually matters. Think of it like renting office space instead of buying a building.
Who this works for: Early-stage initiatives testing their concept before committing to full nonprofit status. Grassroots movements that need immediate fundraising power. Small or temporary projects that don’t want to manage their own board and bylaws.
The trade-off is real: You’ll pay an administrative fee (usually 5-15% of what you raise) and give up some control. The fiscal sponsor holds your funds and may set restrictions. Some funders prefer t
o work directly with independent 501(c)(3)s.
But here’s what you get immediately: credibility with donors, access to grant opportunities, existing infrastructure for accounting, insurance coverage and legal compliance, and someone else handling the IRS reporting.
I’ve managed multiple projects this way. Some eventually spun off into their own 501(c)(3)s once they had proven their model and built capacity. Others stayed put because the arrangement worked better than going solo.
The question isn’t whether fiscal sponsorship is perfect—it’s whether it gets you closer to your mission faster than filing paperwork for the next six months.
Sometimes the smartest move is admitting you don’t need to create everything from scratch, and tapping into existing infrastructure.
Want to know how to find a good fiscal sponsor for your project? Stay tuned!
