Fiscal Sponsorship FAQ

FISCAL SPONSORSHIP OVERVIEW

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?

You may submit an application online for NYFA’s program here. There is no fee for application if you apply with the quarterly deadlines. You will apply as either an Artist Project or Emerging Organization.

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 is the difference between an Artist Project and an Emerging Organization?

Artist Projects are specific projects (as opposed to your entire practice) 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 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.

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. 

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.

APPLYING TO NYFA FISCAL SPONSORSHIP

What are the fees involved in fiscal sponsorship?

Artist Projects pay a one-time contract fee of $100 and an annual contract renewal fee of $50 for the duration of the project.

Emerging Organizations pay a one-time contract fee of $100 and an Annual contract renewal fee of $100 for the duration of the partnership. There will also be a quarterly account maintenance fee of $45 

All fiscally sponsored projects will pay an administrative fee for all contributed funds raised with NYFA. The percentage is based on funds raised:

8% for $0 – $500,000  
6% for $501,000 – $2,000,000  
4% for $2,000,001 and greater 

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 [email protected]

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 protected] for more information. We do not provide copies of past applications, because every project is unique.

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 fiscal sponsors for the same project?

Yes. However, you need to apply separately for each project. Also, you cannot move money between different fiscally sponsored projects.

Can I include and artist fee in my budget?

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.

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 work on international projects?

Yes. NYFA Fiscal Sponsorship can make international wire transfers for a $50 fee and accept incoming international wires. You can also live abroad, as long as you have a U.S. Taxpayer ID Number.

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.

I’m a student. Can my school assignment or thesis be fiscally sponsored?

No.

FUNDRAISING AND SUPPORT FROM NYFA

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 accept private investment?

For qualified candidates, NYFA has an addendum to our contract. Please contact [email protected] if you are interested in accepting private investment or equity for a sponsored project. 

Can I run a crowdfunding campaign?

NYFA offers a crowdfunding partnership with Seed&Spark, as well as custom online fundraising tools to Artist 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 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.

Am I allowed to sell my work?

Yes.

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.

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.

More questions? Contact us at [email protected].

There are four deadlines to apply each year: March 31, June 30, September 30, and December 31 at 11:59 PM EST. NYFA also accepts Out-of-Cycle Reviews on a case-by-case basis; please email [email protected] for more details.

Ready to Apply?

Image Credit: (detail) Shadow Play (Sponsored Project), Shadow Play, 2017, Virtual Reality simulation, Shadow Puppetry motifs, Photo Credit: Lily & Honglei Art Studio