What are Single Entity Funds (SEFs), also known as Model C fiscal sponsorship?

A Single Entity Fund, also called Model C fiscal sponsorship, is a practical way for organizations without their own 501(c)(3) status to access charitable funding. A 501(c)(3) is a type of nonprofit recognized by the IRS as tax-exempt because it serves charitable purposes and donations to it are tax-deductible for donors. The application process to be granted this status is typically long and costly, which is why some people choose fiscal sponsorship instead.

Here’s how Model C fiscal sponsorship works: Tides Foundation, a registered 501(c)(3) nonprofit, partners with an organization that doesn’t have its own 501(c)(3) status. This partnership allows the organization to raise and receive tax-deductible donations to support its charitable project, without the hassle and cost of forming a new nonprofit or applying for its own 501(c)(3) status. Tides Foundation reviews the organization’s proposed project to ensure it is charitable and eligible to receive tax-deductible donations.

Once the project is approved, donations for the sponsored charitable project are made to Tides Foundation, which then grants those funds to the organization for its approved charitable activities. The organization manages its own project, while Tides Foundation oversees the use of funds to ensure they are spent for their intended charitable purpose and in compliance with relevant IRS rules and in line with Tides’ mission. This structure helps organizations get started quickly, with less paperwork and lower costs, while ensuring they can receive tax deductible donations for their charitable project in a way that is compliant with the law.