Fiscal Sponsorship Services


Overview

Fiscal Sponsorship is a financial and legal arrangement by which a federally recognized 501(c)(3) non-profit (such as Africatown International) provides limited financial and legal oversight for an entity that does not have its own 501(c)(3) status. Fiscal sponsors may lend their non-profit status for a short or long term basis or for a specific project or event. Once sponsored in this way, the entity is eligible to solicit and receive grants and tax-deductible contributions that are normally available only to U.S. 501(c)(3) organizations. As a sponsored project, you are treated as a separate legal entity responsible for your own tax returns, employment taxes, insurance, debts, liabilities and other legal obligations.

Africatown International Eligibility

Our fiscal sponsorship program is open and accessible to organizations throughout the U.S. that:

  • Are registered in their state as a charity/non-profit corporation
  • Is a legal entity with a U.S. Employee Identification Number
  • Have a board of directors
  • Has a dedicated person to serve as primary contact who is responsible for providing communicating with the fiscal sponsor and providing them with information upon request

Benefits

  • Financial Management and Bookkeeping: (Bill payments, receipt of grant funding and donations, creation of financial reports)
  • Timely processing of sponsored entity's requests for payments
  • Guidance on establishing a non-profit organization
  • Monthly financial reports showing your fund balance, income and expenses and budget vs actuals, etc.

Terms

  • The applicant is fully responsible for proper use of funds in accordance with the intent for which they were solicited (whether from a donor or a grantor). Failure to deliver on the intended use of funds is grounds for cancellation of our agreement and the applicant is responsible for any return of funds that may be required by the donor or grantor. Africatown International deducts an administrative fee between 10-15% depending on the level of support needed. This amount is negotiated upon receipt of an application.
  • Sponsored funds may only be used for charitable, non-commercial purposes
  • Provide Africatown International copies of all required documentation, including, but not limited to grant proposals, by-laws, annual reports, project goals and objectives, annual budgets, and personnel policies
  • Africatown International is to provide bookkeeping and fiscal management services excluding paying bills, outstanding invoices or making deposits
  • Africatown International will be responsible for processing payroll, recording transactions and reconciling bank statements on a monthly basis. Fiscally sponsored entities must adhere to Africatown International accounting procedures which include approval of all individual expenses reimbursements or payments to individual contractors
  • Maintain and make available to Africatown International upon request all financial reports and copies of documents and receipts and other evidence pertaining to income and expenses. This is to include copies of agreements or contracts from consultants.
  • As a fiscally sponsored project or entity, you are responsible for your own grant writing and fundraising unless you have requested grant writing services for an additional cost
  • Entities must provide copies of all grant proposals and donor solicitations prior to submission and mailing
  • Must comply with all IRS reporting requirements
  • Africatown International requires fiscally sponsored entities carry general liability insurance naming Africatown International as additional insured
  • Africatown International will adhere to IRS reporting requirements and report on its annual 990 form all the financial activity for the fiscally sponsored entity
  • Africatown International will issue 1099 forms as required by law and ensure that all city, state and federal filing requirements are met

Application Process

Applications are accepted on an ongoing basis; however, applications are subject to Africatown International Board approval. Please email us at info@africatowninternational.org for an application. Once an application is received it will take up 15-30 days to make a decision on whether or not AI will agree to provide fiscal sponsorship. The applicant will be notified and scheduled for a face to face meeting to go over a Memorandum of Agreement and the accounting procedures and other AI requirements.

You can submit an application online at:

Cancellation

All agreements are subject to cancellation by Africatown International for reasons including:

  • The project terminates or is significantly changed to the extent that it no longer fits within the eligibility criteria for fiscal sponsorship
  • Failure to follow Africatown International procedures
  • Failure to deliver on the terms of the Memorandum of Agreement
  • Failure to uphold the purpose for which funds were solicited

Funds Disbursement

Fiscally sponsored entities have their own separate bank accounts, debit cards and/or credit cards and are responsible for paying their own expenses and deposits. Africatown International is the recipient of grant funds on behalf of the entity and will release these funds in the form of a check or funds transfer within 10 business days. If you are requesting funds by wire transfer, Africatown International will deduct the wire transfer fee from the amount to be transferred. Funds may only be disbursed to the sponsored entity and not individuals.