What is Fiscal Sponsorship?
Fiscal Sponsorship is a contractual relationship between a nonprofit tax-exempt entity and a project that lacks tax-exempt status but that has been established to further the charitable mission and purposes of the sponsoring 501(c)(3) nonprofit.
Fiscal Sponsorship is a long-standing, well-established model of nonprofit funding in the arts and media. The model of sponsorship the IDA practices is often referred to as a "pre-approved grant" relationship model.
After entering into an agreement with a sponsoring organization, fiscally sponsored projects can seek grants and solicit tax-deductible donations to be made to the sponsor in support of the project.
How can my project benefit from Fiscal Sponsorship with IDA?
Fiscal Sponsorship is a valuable fundraising tool that can expand your fundraising options. Many individual donors, foundations and corporate funders will only donate to an established 501(c)(3) tax-exempt nonprofit organization. Fiscal sponsorship will allow you to apply for and accept such funding. Fiscal sponsorship is also an excellent alternative to investing your time and money into establishing a 501(c)(3) tax-exempt organization. As Fiscal Sponsors on your project, IDA will not infringe on your creative control, copyright, or prevent you from future sales or profiting from your project. IDA seeks to be as non-intrusive as possible in monitoring the project. The main thing we monitor is to make sure the money is being properly dispersed and used for the project as approved.
What types of projects do you sponsor?
We sponsor documentary projects in all stages of production and in many formats. In addition to film and video documentaries, we have worked with virtual reality projects, radio, podcasts, multimedia and experimental projects. If you have a project that is related to the documentary genre and to IDA's mission (i.e. a documentary film festival, a hybrid documentary project, a documentary related website, etc.) we may be able to work with you. If you aren't sure if your project is a good fit, contact the Fiscal Sponsorship department to discuss the specifics of your project before proceeding with the application process. We do not sponsor fiction films, docudramas or any project not directly related to the documentary genre or to IDA's mission.
To take advantage of the benefits of fiscal sponsorship your project must be artistic, educational, or charitable in nature. That does not mean your project can not be profitable. Projects we sponsor are mainly funded by donations, grants and the filmmakers themselves. If you have any further questions about whether your project qualifies for fiscal sponsorship, contact us at firstname.lastname@example.org before beginning your application.
What type of fundraising help and grant writing services do you offer?
You are responsible for raising all the funds for your own project. We do not fundraise for your project, nor do we provide any formal research or grant proposal writing services. However, we will do our best to answer questions, collaborate on grant proposals when necessary, point you towards helpful resources, and offer fundraising and grant-seeking advice whenever we can. And when you hit that wall fundraising for your film, we've been told we give a heck of a pep talk. We are here to help so don't hesitate to give us a call with any fundraising or grant-related questions.
Why do you take a percentage of the money if we do all the fundraising?
A program like this has significant staff, administrative, legal and accounting costs. The fiscal sponsorship fee covers the cost of running our fiscal sponsorship program and some of the overhead of running a nonprofit organization. Fees are what allows us to offer this valuable service to our members. Application fees alone wouldn't even begin to cover our program related expenses.
Can my project have more than one fiscal sponsor?
Maybe. If you already have a primary fiscal sponsor and are applying to IDA for additional sponsorship please contact the Fiscal Sponsorship department to discuss your specific situation before beginning our application process. Unfortunately, we cannot sponsor projects solely to administer a single, one time only pass-through grant. You must complete the entire application process and be actively fundraising to participate in our program. There may be situations where a specific grant requires an in-state fiscal sponsor in a state where we are not registered. Since we are registered as a public charity in California, if we are unable to sponsor you for a specific grant you are free to pursue secondary fiscal sponsorship with a local organization in the state where you will be applying for the grant. Whenever possible we will do our best to point you in the right direction by recommending organizations we trust. We do not approve secondary sponsorship in all cases, however. Please contact us with questions.
There is a grant application that is due in two weeks and they require a fiscal sponsor. If I submit my application, can you expedite it ASAP to meet the grant deadline?
If you have a specific deadline contact our office and we'll let you know if it's likely that we will be able to meet it. Our review process typically takes about a month. Please budget our review process into the timeline when you are considering deadlines.
How do I apply?
An application and detailed instructions on how to apply are available here: Fiscal Sponsorship Application.
Can I apply for fiscal sponsorship for my company if we are producing multiple projects?
We only sponsor specific projects, not individuals or companies. You must apply separately for each project you are working on. If you are applying for sponsorship for more than one project, you must be able to show in your application that you have the resources to work on more than one project at a time and explain how those resources will be divided between active projects.
If I am a member of IDA is my project automatically sponsored?
No. While you must be a member of IDA to take advantage of our fiscal sponsorship program, sponsorship is not automatic. You must apply to the program. Unless you have officially been accepted into the program and have signed an official fiscal sponsorship agreement you may not solicit funds through IDA's fiscal sponsorship program.
I'm not a U.S. citizen. Can I still apply for fiscal sponsorship with IDA?
Yes. You do not need to be a U.S. citizen to apply for fiscal sponsorship with IDA. You should note that there may be mandatory IRS withholding requirements of as much as 30% depending on the country you live in and where funds are to be spent. Please contact our office before proceeding with an application if you reside outside the US.
How much does Fiscal Sponsorship cost?
There is a $75 nonrefundable application processing fee when you apply. You will be required to maintain an active paid membership with IDA throughout the life of your project. Membership with IDA starts at $55 a year. We charge a 7% administrative fee for most grants and donations received on behalf of a sponsored project (this fee will be higher for some government grants). Our fees are very competitive with other fiscal sponsorship programs that offer similar services and resources.
What percentages of applications are approved for fiscal sponsorship?
Approximately 90% of proposals submitted are ultimately accepted into our program. Our goal is to help documentary projects get made and funded. We will work with you whenever possible to address problems in your application and help your project get accepted.
My film is mostly completed and I just need fiscal sponsorship for post-production and distribution. Can I still apply?
Yes! We can work with projects in all phases of development, production, post-production, distribution, and outreach.
Can I start accepting donations and applying for grants through IDA while I am waiting for my fiscal sponsorship application to be approved?
No. Until we have a signed contract, your project is not sponsored by IDA and may not solicit tax-deductible donations or apply for foundation grants on IDA's behalf.
I'm putting together my application and I've never written a documentary budget before. Can you help?
This article by Robert Bahar is a great place to start when trying to put together a budget for your project. The article, originally published in our magazine, Documentary, includes a detailed sample budget to help you get started. There is also a template you can use to create an Excel budget available via Doculink.org, here: Documentary Budget Template.
How detailed and complete does my budget need to be?
You should submit a complete budget that is as detailed as possible. Do your best to get well-researched estimates for all anticipated project-related costs. Your budget should not include things like "To be Determined." We need an actual dollar amount for projected expenses. We understand that production related costs and services can change. You can submit reasonable changes and amendments to your budget as your project progresses, but you should be as thorough as possible with your initial budget. If your project is in production and/or post-production, a comprehensive budget encompassing all phases of production is required. For projects in early development, you may provide a shorter development only budget, which you will be required to expand at a later date when the development phase is complete. If you are applying with a finished documentary and are seeking sponsorship ONLY for distribution, engagement and/or outreach you may submit a budget the reflects just those covered activities.
Can I include a salary for myself in my fiscal sponsorship budget?
Yes! We strongly encourage you to include a salary for yourself in your project budget. Actually, several of the funders we work with insist upon it. You deserve to be paid a fair price for your hard work. It is important however that any salaries specified in your budget be proportional to your overall budget and fall well within the accepted industry norms for independent documentary projects. Budgets with salaries or other expenses that are deemed excessive will be rejected.
Terms of the Program
If I have a project in fiscal sponsorship are my future projects automatically sponsored too?
No. You must apply separately for each project you work on. Even if you have worked with us before, sponsorship is never automatic.
If I find a grant that does not require a fiscal sponsor can I apply on my own?
Yes. You are free to pursue multiple sources of revenue to fund your project. If you find a grant that you qualify for as an individual filmmaker, you can apply and accept those funds outside of your fiscal sponsorship arrangement with IDA.
I have someone who would like to make an in-kind donation to my project. How can I get them a tax receipt for their donation?
If someone would like to donate a non-cash tangible good to your project, we can issue you a receipt under most circumstances. Some examples of this type of donation include things like equipment or office supplies to be used directly for the production of your documentary. The receipt we issue, in accordance with IRS regulations, will not specify a dollar amount for the deduction. We will simply describe the goods donated in detail, and the donor will have the responsibility of quantifying the donation and confirming it's deductibility. You will then be responsible for accounting for how donated goods are used for your project when you file your reports. If a donor has questions about the deductibility of a non-cash contribution they should contact their tax professional. We are not qualified to answer tax related questions.
We are unable to issue receipts for the donation of time or professional services, as these are considered volunteer work and are non-deductible by law. We also cannot issue receipts for donated space, rent or large ticket items like cars or boats.
Someone would like to make a credit card donation to my project. Is that possible?
Yes. We currently accept credit cards, checks, wire transfers, stock transfers, and PayPal donations. Refer to the Fiscal Sponsorship Handbook for detailed instructions.
I have a project in fiscal sponsorship, how can I get it up on the website to accept donations?
Login to the IDA website and visit the main fiscal sponsorship project management page to fill out the Submit or Edit Online Donations Information form.
Can you accept a stock donation to my project?
Yes. It may take longer to process a stock donation than a standard check or credit card donation but we can arrange it. Please contact our office for information on accepting stock donations.
Is my project eligible for matching gifts?
Yes. We can process and accept matching gifts from businesses when an employee has made an eligible donation. Each company has their own rules and procedures for processing these donations. Employees or businesses who would like to make eligible gifts should contact the appropriate person at their place of employment for details on how to proceed. After a matching gift has been initiated, please let us know that a matching donation will be arriving and ask your company to reference the project you are donating to somewhere on the check or accompanying letter.
I'm selling DVDs on my website, how can people who purchase them receive a tax deduction?
A donation is a gift made for charitable purposes. That gift must be given without return consideration. If any goods or services are received it is considered a purchase or a sales transaction, not a donation. Payment for DVDs, ticket sales, promotional merchandise, etc. should be made directly to you or your company, not to IDA.
I want to have a raffle or auction at my next fundraising party. How do I handle those donations?
We, unfortunately, cannot accept any money generated by raffles. As long as you comply with the laws in your state, you may still be able to hold a raffle to benefit your project but funds would no be considered a charitable donation and are not tax-deductible.
I have an overseas donor who would like to make a contribution in support of my project. Can they receive a tax benefit in their own country?
The tax receipt we provide to donors is only valid in the United States. Potential donors outside of the United States will need to consult with their own government and/or tax professionals about any potential benefit associated with donating to a US charity or nonprofit organization.
How often can I request funds from my fiscal sponsorship account?
We write checks approximately once a week. You can request funds when you are ready to spend them by filling out our official check request form.
Can I have funds transferred to my bank account instead of waiting for a check?
Wire transfers are possible for an additional charge. Wire transfers are not a standard procedure for issuing funds. Please contact our office for further details and information about fees and timelines.
What can I pay for with money received through fiscal sponsorship?
You can pay for any approved project-related expense with money from your fiscal sponsorship account. You should refer to the budget that was approved with your application for any questions about what is and is not an approved expense or line item. Using money from fiscal sponsorship for anything that is not directly related to producing your project is against the law and could have very serious consequences for you, your project, IDA, donors, and foundations who have given to your project. You will be required to report back to IDA on how all funds are spent and may be required to provide receipts, invoices or proof of payment at any time. If you have any concerns about what is or is not a legitimate project related expense please contact us.
Can I pay for equipment with money from my fiscal sponsorship account?
Yes. You can pay for equipment that is directly related to your project and purchasing it was accounted for in the budget that was approved with your fiscal sponsorship application. Typically the cost of purchasing equipment will be approved if you can show that it is less expensive than renting the same or similar equipment. If the equipment is necessary for your project but was not accounted for in your budget you can submit a revised budget for approval. The budget that was approved with your application should be your guide for what is and isn't an approved expense.
Do I need to keep receipts and records of how I spend the money you send me?
YES!!! Proper record keeping is essential and cannot be emphasized enough. IDA is legally responsible for all funds that come through the fiscal sponsorship program. As a project director, you are legally and contractually responsible for reporting back to us on exactly how any funds you receive are spent on your project. Please refer to our project report forms.
Do I need to have a separate bank account to accept fiscal sponsorship funds or can the checks be made directly to me?
You are not required to have a separate bank account for your project, but we strongly recommend it. Keeping track of finances for tax purposes is much easier with a dedicated account. Even if you are managing your project as an individual you can still speak with your bank about getting a separate account just for your project.
Do I need to report the money I receive through fiscal sponsorship to the IRS?
Yes! We strongly advise everyone consult a tax professional after your acceptance into the Fiscal Sponsorship program. You are responsible for reporting all income, including money received through fiscal sponsorship, to the IRS. If you are eligible for one, you will receive a 1099 from us at the end of each calendar year that you accept funds through our program. If you have been diligently keeping track of the money received and spent on project related expenses, you ideally shouldn't owe any taxes on the money we send you, except for what you will owe on your project related salary. However, we cannot guarantee that you will have no tax liability. You must speak to your own tax advisor to discuss your personal circumstances. Please consult a tax professional for any specific tax questions. We'll do our best to offer general guidance, but our staff is not qualified, nor permitted, to answer any specific tax related questions.