About Fiscal Sponsorship
Fiscal sponsorship is a cost-effective way to implement new programs, bring together groups to collaborate on an issue, and test new approaches to social change. Fiscal sponsorship is a common mechanism used in the nonprofit sector that enables individuals and organizations to start new programs without establishing a new, separate nonprofit organization. These fiscally sponsored projects get their charitable status from their fiscal sponsor.
Fiscally sponsored projects of Tides are not separate and isolated entities; rather, they are an integral part of Tides. We receive charitable donations and grants on behalf of our fiscally sponsored projects; maintain the necessary legal and financial infrastructure for all project activities; and, allow project leaders to focus on creating a healthy, just and vibrant world.
Fiscal sponsorship from Tides provides the space for experimentation or for projects to accomplish a discrete goal. It enables our projects to inclusively participate in the nonprofit sector – a boon for small, grassroots groups or communities that may be kept out of the sector for lack of administrative expertise, capital resources, or unfamiliarity with regulations and requirements. In comparison to independent nonprofits, our projects find it easier to end once they have accomplished what they set out to do or no longer have revenues sufficient for financial viability. Other projects choose to stay with Tides for the long-term as they benefit from high quality operational services and lowered costs to operate.
For Frequently Asked Questions about becoming a fiscally sponsored project of Tides Center, click here.
- What is fiscal sponsorship?
- What is the relationship between Tides Center and its projects?
- Are Tides Center projects nonprofits?
- What is a 501(c)(3) nonprofit organization?
- Why choose fiscal sponsorship?
- Why Tides Center?
1. What is fiscal sponsorship?
Fiscal sponsorship is a practice that has evolved as an effective and efficient means of starting new charitable initiatives, delivering public services, and seeding social movements. Fiscal sponsors are nonprofits that enable the movement of resources from funders and donors to projects, activities, ideas, and organizations that share the fiscal sponsor’s mission. Fiscal sponsorship provides a legal framework to our projects.
2. What is the relationship between Tides Center and its projects?
Tides fiscally sponsors approximately 230 projects. Tides' projects are not separate entities or affiliated organizations. Because they are an integral part of Tides Center and not separate legal entities, projects are able to receive charitable donations and grants available only to tax-exempt organizations. Tides Center is legally and financially responsible for all our projects and activities.
3. Are Tides projects nonprofits?
Yes, Tides Center projects are nonprofits and have 501(c)(3) tax-exempt status. All Tides Center projects abide by strict federal regulations governing nonprofits, such as limits on lobbying and political activities, as well as Tides Center’s policies and procedures, including an annual audit, a whistleblower policy, conflict-of-interest disclosure policies, and other compliance-related requirements. The Tides Center Board of Directors is responsible for all legal, taxation, and regulatory issues for projects. Projects often also have their own advisory boards, which are designated caretakers of their project's mission, responsible for strategic planning, program oversight, fundraising, outreach, and assistance to and review of the project director.
4. What is a 501(c)(3) nonprofit organization?
The term 501(c) refers to a subsection of the United States Internal Revenue Code that lists the types of nonprofit organizations exempt from certain federal taxes. Section 501(c)(3) is one of the tax law provisions granting exemption from the federal income tax to nonprofit organizations that exist for religious, charitable, scientific, literary, or educational purposes, among others. See the IRS's website for more information on the designation of charitable organizations. Tides Center has been a designated 501(c)(3) nonprofit organization since our incorporation in 1996.
5. Why choose fiscal sponsorship?
Establishing an independent 501(c)(3) is expensive—in fact, the process can cost upwards of $100,000. Being fiscally sponsored is extremely cost effective and saving money is important, particularly for organizations that are just emerging, testing new approaches to difficult social problems, run entirely by volunteers, or working in issue areas where funding is scarce. In fact, in an environment where funding for all nonprofits is on the decline, it is important to emerging organizations not to compete with other organizations for limited funds. Fiscal sponsorship is an efficient, economic way to reduce the cost of running an organization and still maintain the integrity of the organization’s purpose. For more details on why projects may decide to work with a fiscal sponsor, see Why Choose Fiscal Sponsorship?.
6. Why Tides Center?
Tides has supported nonprofit leaders since 1976 and is the leading fiscal sponsor in the nation. It has a long history of providing high quality services and support to the nonprofit community and has sponsored over 800 projects throughout its history. Tides Center is committed to the missions of its projects, and all Tides Center projects share a vision of a just, healthy, and sustainable world.