* Apologies that I’m not able to engage more in depth with the arguments presented here at the moment. So only sharing some quick thoughts for now.
This is hard because the benefits of sponsorship are legible and predictable, and the costs are nebulous and erratic. But that makes it all the more important to deliberately investigate them.
I agree somewhat with the first sentence. Some benefits from fiscal sponsorship are much more predictable than others. Impact being one of the less predictable ones.
I agree strongly with the second sentence. I think it is part of any fiscal sponsor (and sponsees) due diligence to do that. Fiscal sponsorship relationships should be reassessed continually and with care. I think this white paper describes this very well.
My guess is that this will show that having multiple large orgs share a legal structure is not worth it, but using sponsorship for short term projects or a launching pad will continue to make sense.
This seems roughly right. However this depends a lot on:
The risk profile of the projects
How the legal structure itself is set up, for instance if the fiscal sponsorship relationship is set up as a Model L relationship, most of the liabilities actually remain with the sponsee.
Among other factors
I think something that I’m missing in this post is more mention that fiscal sponsorship is widely practiced (especially in the US). However, as Emma Geering puts it—way better than I could - :
“As a practical construct that addresses market failures and motivates social change, fiscal sponsorship needs formal recognition in the law. New state corporate codes and Internal Revenue Code provisions cementing fiscal sponsorship in the doctrines supporting nonprofit law are necessary to continuous growth in the nonprofit sector.” (The Legal Value of Fiscal Sponsorship: A Proposal of New Law)
(I work within the Special Projects team at RP, but all views are my own)
* Apologies that I’m not able to engage more in depth with the arguments presented here at the moment. So only sharing some quick thoughts for now.
I agree somewhat with the first sentence. Some benefits from fiscal sponsorship are much more predictable than others. Impact being one of the less predictable ones.
I agree strongly with the second sentence. I think it is part of any fiscal sponsor (and sponsees) due diligence to do that. Fiscal sponsorship relationships should be reassessed continually and with care. I think this white paper describes this very well.
This seems roughly right. However this depends a lot on:
The risk profile of the projects
How the legal structure itself is set up, for instance if the fiscal sponsorship relationship is set up as a Model L relationship, most of the liabilities actually remain with the sponsee.
Among other factors
I think something that I’m missing in this post is more mention that fiscal sponsorship is widely practiced (especially in the US). However, as Emma Geering puts it—way better than I could - :
“As a practical construct that addresses market failures and motivates social change, fiscal sponsorship needs formal recognition in the law. New state corporate codes and Internal Revenue Code provisions cementing fiscal sponsorship in the doctrines supporting nonprofit law are necessary to continuous growth in the nonprofit sector.” (The Legal Value of Fiscal Sponsorship: A Proposal of New Law)
(I work within the Special Projects team at RP, but all views are my own)