Fiscal Sponsorship FAQ
[-][+] Fiscal Sponsorship and Eligibility
What is the difference between fiscal sponsorship and receiving a grant?
Fiscal sponsorship is not a funding program. Instead, it enables individual artists and artist-run organizations to use NYFA’s charitable 501(c)(3) status to raise tax-deductible money through grants and individual contributions.
Grants, on the other hand, are monetary awards to individuals or arts organizations.
What is fiscal sponsorship and why is it needed?
Fiscal sponsorship gives an artist or emerging arts organization access to funding opportunities and other resources through an affiliation with a tax-exempt 501(c)(3) organization. Fiscally sponsored Artist Projects and Emerging Organizations can apply for grants from foundations or corporate funders that are usually restricted to 501(c)(3) tax-exempt organizations, and offer individual donors the benefit of a tax-deductible contribution.
What does 501(c)(3) mean?
501(c)(3) is the tax determination given to a non-profit charitable organization at the federal level. It allows donors to receive a tax deduction for supporting a public charity.
How do I become fiscally sponsored?
There are two separate tracks for becoming fiscally sponsored: Artist Projects and Emerging Organizations.
What is the difference between an Artist Project and an Emerging Organization?
Artist Projects are specific projects done by individual artists or unincorporated artist collectives. NYFA Fiscal Sponsorship can contract with individuals or artists who have an LLC or corporation. We only accept contributed income for Artist Projects. Emerging Organizations must be incorporated as a nonprofit on the state level. They may also be their own 501(c)(3). We accept both earned and contributed income for Emerging Organizations.
Do I have to have a US Social Security number or be incorporated in the US to join NYFA Fiscal Sponsorship?
Yes. For Artist Projects, you must have a social security number, or be incorporated as an LLC or corporation in the US. Emerging Organizations must be incorporated as a nonprofit on the state level.
Do I have to incorporate to be fiscally sponsored for my Artist Project?
No. You can be fiscally sponsored as an individual artist.
Does my Emerging Organization need to be incorporated?
Yes. The organization must be incorporated or in the process of incorporating as a non-profit at the state level. You must be incorporated in order for sponsorship to begin.
Do I have to live in New York City or State?
No. NYFA Fiscal Sponsorship is an international program, but you do need a U.S. taxpayer identification number.
Does fiscal sponsorship support my entire artistic practice?
No. We fiscally sponsor specific projects for individual artists and emerging arts organizations incorporated at the state level for their ongoing activities.
How long can I be fiscally sponsored?
For an Artist Project, as long as you are actively fundraising for—and working on—the project, you may remain fiscally sponsored until the project is complete. Emerging Organizations are fiscally sponsored on an ongoing basis. Artist Projects and Emerging Organization both need to complete annual renewal fee payment and reporting requirements. For an Artist Project, as long as you are actively fundraising for—and working on—the project, you may remain fiscally sponsored until the project is complete. Emerging Organizations are fiscally sponsored on an ongoing basis.
What is “public benefit,” and why is it important for fiscal sponsorship?
Fiscally sponsored projects must benefit the public in some way. That could include a subject screening, exhibition, performance or talk, exploring an issue, or otherwise offering an opportunity for an underrepresented group of people. Because donations to fiscally sponsored projects are tax-deductible, projects must add value to the public sphere and not only benefit the artist’s private gain.
I’m a student. Can my school assignment or thesis be fiscally sponsored?
No. Fiscally sponsored projects may not be used towards earning an undergraduate or graduate degree.
[-][+] Applying to NYFA Fiscal Sponsorship: Guidelines
Why does the fiscal sponsorship program have an application process?
The application process ensures proposed projects meet NYFA Fiscal Sponsorship’s guidelines and standards of professionalism and protects artists and emerging organizations by ensuring that sponsored project activities are conducted according to IRS regulations.
What do I need to include with my application?
Complete applications must include a project narrative that addresses the project or organization’s mission, goals, timeline, audience and promotional plans; a budget that shows expenses and income; a fundraising strategy; resumes or bios for principal project staff; work samples; and at least one letter of support. If you have questions about the application, please contact email@example.com.
Do I have to have any money raised before I apply?
No. We do not expect any money to be committed before you are accepted into the program.
How long until I hear if my application was accepted?
There is a 3-week turnaround time for notification after each quarterly deadline. If you need a faster response, consider applying for an Out-of-Cycle Review by contacting firstname.lastname@example.org.
Can you review my application before I submit it or provide an application template?
Fiscal Sponsorship staff provides pre-application phone reviews for $50 an hour. Please contact the Fiscal Sponsorship Program Officers at email@example.com for more information. We do not provide copies of past applications, because every project is unique.
What administrative fees does NYFA charge for fiscal sponsorship?
It is free to apply to NYFA Fiscal Sponsorship's regular, quarterly deadline. If you are accepted into the program, NYFA Fiscal Sponsorship's non-negotiable fees are as follows:
One-time contract fee of $100 (only if accepted)
Annual contract renewal fee of $50
8% flat fee on all contributed funds raised for the project
One-time contract fee of $100 (only if accepted)
Annual contract renewal fee of $100
Quarterly account maintenance fee of $45
8% flat fee on both earned and contributed funds raised for the organization
Are “in-kind” donations of services or space considered tax-deductible?
No. As per IRS regulations, only tangible goods are considered tax-deductible for in-kind purposes. For budgeting purposes, you may estimate the value of space and services that are being offered to you free of charge.
Can I have investors?
No. However, you may use fiscal sponsorship during the research and development phase of your project, or close your project at any time. You may only solicit investors once the project is no longer fiscally sponsored. If you have questions about investment, we encourage you to reach out to staff at firstname.lastname@example.org.
Can I run a crowdfunding campaign?
NYFA offers custom online fundraising tools to Sponsored Projects and Emerging Organizations. If you are interested in conducting a crowdfunding campaign for your project, please contact Fiscal Sponsorship staff, as we are happy to help you identify your best strategy.
Can I have multiple fiscal sponsors for the same project?
No. NYFA is an exclusive fiscal sponsor. We make exceptions on a case-by-case basis if NYFA Fiscal Sponsorship does not meet the requirements for a specific grant.
Can I have multiple sponsored projects?
Yes. However, you need to apply separately for each project. Also, you cannot move money between different fiscally sponsored projects.
Can I take an artist fee?
Yes, you can take a fee for being the project director and for being an artist on the project. Typically, project directors don’t pay themselves more than 20% of the budget; however, the artist fee varies depending on the type of project.
Is there a maximum or minimum I must raise?
No. You can raise as much as you need to complete the project. There is no minimum amount you must raise, but NYFA Fiscal Sponsorship has a $15,000 budget minimum because we work with projects of a certain scale.
Can you raise funds on my behalf or introduce me to donors?
No. NYFA Fiscal Sponsorship does not raise money or solicit donors on your behalf. You know your project best, and are best equipped to identify and connect with potential donors. Program Officers can advise you on your fundraising strategy and review fundraising materials such as grant proposals and letters to individual donors to support your fundraising efforts.
Am I allowed to sell my work?
Yes. You are allowed to sell your work as long as the project remains nonprofit with a public benefit. For Artist Projects, earned income does not come through NYFA Fiscal Sponsorship.
Why does NYFA Fiscal Sponsorship oversee funds for a Sponsored Project?
NYFA Fiscal Sponsorship is legally responsible for the funds received on behalf of a Sponsored Project, and must ensure that the project uses the funds for charitable activities and that donor-reporting requirements are met by the project.
Can I mail in my application?
No. Please apply using our online application system. If you are applying for an Out-of-Cycle Review, please email email@example.com for more details.
How many projects do you accept into fiscal sponsorship and how are they selected?
There is no limit to projects we accept. Each project is evaluated based on its feasibility and public benefit. Successful applications are thorough, professional, and demonstrate the potential of being completed successfully. Remember that projects cannot be used towards an undergraduate or graduate degree, and cannot be for-profit.
Can I reapply if my application is rejected?
Yes. NYFA Fiscal Sponsorship provides feedback from the review panel in the hopes of strengthening future applications.
Can I work on international projects?
Yes. NYFA Fiscal Sponsorship can make international wire transfers and accepted incoming international wires. You can also live abroad, as long as you have a U.S. Taxpayer ID Number. You may take a cash advance from your project balance for travel and work overseas.
Does NYFA Fiscal Sponsorship have any creative control over the project?
No. Projects that are fiscally sponsored by NYFA are considered independent contractors and retain their own identity. Project directors retain creative control and ownership of their project/organization.
What other services does NYFA's Fiscal Sponsorship program provide?
We provide technical assistance in the form of fundraising consultation (via phone, email, and in-person), covering: proposal writing, online fundraising and crowdfunding, individual donor solicitation, event planning, budgeting, strategic planning, and board development. NYFA Fiscal Sponsorship also provides financial services like vendor payments, check writing, light book keeping, and 1099 tax form preparation.
Does NYFA Fiscal Sponsorship file my taxes for my project or organization?
No. Projects that raise funds through NYFA Fiscal Sponsorship are legally responsible for reporting money they receive from their project as income to the IRS. At the end of each calendar year, NYFA Fiscal Sponsorship issues 1099s to all sponsored projects. Upon request, NYFA Fiscal Sponsorship will process 1099 forms for vendors NYFA Fiscal Sponsorship paid on behalf of your project.
How long does it take to process donations to NYFA Fiscal Sponsorship projects and organizations?
Financial transactions and donations via check, credit card or wire transfer are processed weekly.
[-][+] Fundraising and Project Management