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[Letterhead of fiscal sponsor]Attn: ___FUNDER ORGANIZATION ADDRESS ADDRESSDateDear ___:The enclosed grant application is submitted by [name of Fiscal Sponsor], an organization qualified under Section
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Fiscal sponsorship refers to an arrangement in which a nonprofit organization provides financial and administrative support to a project or organization that does not have its own 501(c)(3) status. The six common forms include: 1) Comprehensive Sponsorship, 2) Pre-Approved Grantmaking, 3) Group Exemption, 4) Fiscal Agency, 5) Project Sponsorship, and 6) 501(c)(3) Friends Organization.
Organizations or projects that wish to benefit from charitable donations while operating under the umbrella of a fiscal sponsor are required to file for the six ways of fiscal sponsorship. This typically includes nonprofit organizations and projects without 501(c)(3) status.
To fill out the six ways of fiscal sponsorship, organizations must complete the relevant application forms, provide necessary documentation such as a budget, project descriptions, and a narrative explaining the work. Additionally, they should ensure compliance with IRS regulations and the sponsor's policies.
The purpose of fiscal sponsorship is to enable projects or organizations to operate as if they are charitable entities without needing to establish their own tax-exempt status. It provides access to funding, grants, and tax-deductible donations, while also offering administrative support.
Information that must be reported includes financial statements, project progress updates, compliance with grant conditions, donor information, and any changes in project management or objectives. Reports often include financial transparency and accountability measures.
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