Many people or teams with ideas for nonprofits tend to apply for their own independent nonprofit 501(c)(3) status – a status that requires registering with the IRS, their home state, any state they choose to hold programming or fundraising in, and the creation of a Board of Directors, bylaws, and compliance policies. All of this infrastructure and administration tends to pull organizers away from the work they originally set out to do.
As an alternative, fiscal sponsors place responsibility for implementing programs in the hands of project leaders while ensuring appropriate fiduciary oversight. Instead of starting a new nonprofit that would operate alone, organizers can sign a contract or agreement with an existing 501(c)(3) under a formal arrangement known as fiscal sponsorship.
Fiscal sponsorship means that individuals and small teams are then open to receiving tax-deductible donations and become eligible for grants without creating their own formal business entity. This creates the ability to raise funds in a number of ways that would not necessarily be available for valuable community projects. In this way, fiscal sponsorship has evolved as an effective and efficient mode of starting new nonprofits, seeding social movements, and delivering public services.
You can learn more about fiscal sponsorship as a financial, political, and resource-sharing movement from the National Network of Fiscal Sponsors – an organization of which CultureWorks is a Steering Committee member.
Take a closer look at our fiscal sponsorship services below and meet a few of our members!
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When a group is forming a new nonprofit, coalitions, and networks but is still working building systems and learning state and federal requirements.
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When a program is scaling beyond a start-up phase and is looking for expertise in compliance and financial systems from a co-management team.
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When a project or individual is not trying to scale up but hold consistent programming without creating an entire administrative infrastructure around it as an independent nonprofit.
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When an established nonprofit is looking to reduce administrative costs and overhead by participating in shared services.
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When the formal nonprofit system doesn’t match the needs of the group or network working for change.
MEMBER CRITERIA & INTAKE PROCESS
We support organizations and individual artists, curators, practitioners, and producers in all fields of the fine, performing, and design arts as well as history, heritage, and humanities.
- Fine and Performing Arts
- Music (jazz, classical, popular, traditional, contemporary, etc.)
- Theatre(classical, devised, popular, traditional, contemporary, etc.)
- Dance/Movement(jazz, popular, classical, traditional, modern, contemporary, etc.)
- Visual Arts(two-dimensional work, digital art, sculpture, traditional, graphic arts, etc.)
- Multidisciplinary & Social Practice(new forms, disciplines, modalities, etc.)
- Education(wherein the above fields are the core focus)
- Heritage & Humanities
- Special Collections(archives, libraries, repositories, etc.)
- Museums(exhibiting and interpretive institutions, etc.)
- Monuments (historic sites, memorials, parks, trailways, etc.)
- Letters(writing, spoken word, memoir, documentaries, scholarship, etc.)
- Mindfulness(cultural practices related to mindfulness, meditation, and secular spirituality)
- Education(wherein the above fields are the core focus)
- Creative Enterprise
- Design(graphic, web, architecture, planning, industrial design, textiles, fashion, etc.)
- Media(journalism, film, publishing, web media, video and digital production, etc.)
- Making(small-scale manufacturing, artisanal productions, craft, design, etc.)
- Marketing(advertising, marketing public relations promotion, etc.)
- Technology(new or emerging hard or soft technology development, etc.)
- Education(wherein the above fields are the core focus)
Our members exhibit intentionality, impact, and a desire for regular interaction with the community.
- Intentionality– There is seriousness of intention around the work.
- Impact– the work benefits people other than just the person doing the work.
- Interaction– There is regular communication with us, peers, and stakeholders.
The intake process can be found here with the following core sections:
- How you do identify yourself within the kinds of activity that define our community?
- What is your mission and purpose, and why do you want to do this work?
- How do you define the impact of your work and why is this impact valuable?
- How do you define your discipline and ensure your work advances in its field or tradition?
Projects accepted for fiscal sponsorship with CultureTrust match the following:
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A practice or plan in the arts, cultural, heritage, creative, and/or educational sectors
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Alignment with CultureTrust’s values as an equitable organization focused on anti-oppression practices.
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A clear sense of the work’s intention, impact, and interaction.
CultureWorks Greater Philadelphia offers two forms of fiscal sponsorship through its subsidiary CultureTrust Greater Philadelphia:
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Comprehensive “Model A” Fiscal Sponsorship
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Pre-approved Grant “Model C” Fiscal Sponsorship
Model A Fiscal Sponsorship:
This is the closest relationship between sponsor and fiscally sponsored project —there is no legal or corporate distinction between CultureTrust and the project. Each project becomes its own subtrust under CultureTrust, where income and expenses are held for the project. Functionally, a Project Director of a fiscally sponsored project in our Model A program acts as the head of their own department within CultureTrust. The project retains control over its mission, artistic/programmatic vision, and intellectual property, and CultureTrust serves as the direct contractor, insurer, and liability holder for all of the project’s activities, receiving all revenues and paying standard expenses.
Model C Fiscal Sponsorship:
This model is more arm’s-length than the Model A, which is why we offer this as an optional “incubator” relationship to CultureWorks members. The relationship between the sponsor and the project is one of grantor (CultureTrust) and grantee (the project) and only concerns contributed revenues. Earned revenues — income received in exchange for goods or services, like ticket sales or fees for consulting — are not touched by the sponsor. Funds are are received in CultureTrust’s account, and CultureTrust then re-grants them to the project when requested as a reimbursement.
CultureTrust allocates 12% of all incoming project revenues to cover the costs of shared services, staff labor, and General Liability and Directors and Officers insurance coverage we provide for Model A Fiscal Sponsorship.
CultureTrust allocates 7% of all incoming contributed project revenues to cover the cost of charitable compliance, staff labor, and oversight costs we provide for Model C Fiscal Sponsorship.
We also ask that you join CultureWorks as a shared workspace member (at whatever monthly rate makes sense for your needs) and retain that membership for as long as your project is fiscally sponsored. CultureWorks is a community that holds space and provides services for creative workers, and fiscal sponsorship is a deeper relationship within that community. This membership can be as low as $40 each month and is billed to your project for the use of shared space including a conference room, free and low-cost workshops, member discounts, and access to consulting.
CultureTrust does not leverage any fees beyond the 12% and the monthly membership rate, but your project may need to cover some additional administrative costs depending on its size, specialized insurance needs, and payroll or sales tax requirements.
Payroll: Not all projects have staff on payroll, but any projects that do are in charge of covering the following for their employees:
- Workers Compensation Insurance, which is an additional 1% of each month’s payroll for employees and contractors.
- Payroll taxes, which is 9.1% of the total amount paid out that month.
- Shared payroll fee, which generally amounts to $2-3 each month Payroll taxes do not apply for contracted employees, who are responsible for filing their own personal taxes.
Additional Insurances: When a project joins CultureTrust, they are added to CultureTrust’s shared General Liability Insurance policy and are charged a pro-rated fee. The cost of insurance is determined by CultureTrust’s underwriter and coincides with the potential project's risks. The size of the project, type and location of programming, and population served help calculate these risks. For example, a project that stages many large public events and festivals each year in public spaces will have more risk than a project that holds a small series of writing classes in a storefront.
After this initial enrollment in CultureTrust’s policy, the project is included in future CultureTrust General Liability Insurance policies and will not have to pay this amount again. There is no need to add any Directors and Officers Insurance, since the CultureWorks board, who are also the CultureTrust board, are already covered. If a project needs additional specialty insurances, such as renter’s insurance for a lease, real property insurance for a building they own, or Auto Insurance for a leased or owned car, the project will need to cover those costs specific to their needs. CultureTrust submits insurance requests to the underwriter and those rates are variable.
Software Platform Fees: CultureTrust projects use WeDidIt, a comprehensive donation, crowdfunding, and membership platform dedicated to fiscally sponsored projects. They charge a 2% platform fee per donation and have a standard 2.8% processing fee that donors can choose to cover as part of their donation. This may seem like a high fee at first, but comparable to other crowdfunding platforms or Patreon, the 2% is lower than other platform fees. In addition, CultureTrust does not allocate 12% on the total donation – only on the net amount received after platform and processing fees are deducted. This is not standard practice – it’s CultureTrust’s way of allowing project to keep as much of their funding as possible.
CultureTrust does not leverage any fees beyond the 12% and the monthly membership rate, but your project may need to cover some additional administrative costs depending on its size, specialized insurance needs, and payroll or sales tax requirements.
Payroll: Not all projects have staff on payroll, but any projects that do are in charge of covering the following for their employees:
- Workers Compensation Insurance, which is an additional 1% of each month’s payroll for employees and contractors.
- Payroll taxes, which is 9.1% of the total amount paid out that month.
- Shared payroll fee, which generally amounts to $2-3 each month Payroll taxes do not apply for contracted employees, who are responsible for filing their own personal taxes.
- Employee Benefits, which have a variable cost depending on the health plans employees choose.
Additional Insurances: When a project joins CultureTrust, they are added to CultureTrust’s shared General Liability Insurance policy and are charged a pro-rated fee. The cost of insurance is determined by CultureTrust’s underwriter and coincides with the potential project's risks. The size of the project, type and location of programming, and population served help calculate these risks. For example, a project that stages many large public events and festivals each year in public spaces will have more risk than a project that holds a small series of writing classes in a storefront.
After this initial enrollment in CultureTrust’s policy, the project is included in future CultureTrust General Liability Insurance policies and will not have to pay this amount again. There is no need to add any Directors and Officers Insurance, since the CultureWorks board, who are also the CultureTrust board, are already covered. If a project needs additional specialty insurances, such as renter’s insurance for a lease, real property insurance for a building they own, or Auto Insurance for a leased or owned car, the project will need to cover those costs specific to their needs. CultureTrust submits insurance requests to the underwriter and those rates are variable.
Software Platform Fees: CultureTrust projects use WeDidIt, a comprehensive donation, crowdfunding, and membership platform dedicated to fiscally sponsored projects. They charge a 2% platform fee per donation and have a standard 2.8% processing fee that donors can choose to cover as part of their donation. This may seem like a high fee at first, but comparable to other crowdfunding platforms or Patreon, the 2% is lower than other platform fees. In addition, CultureTrust does not allocate 12% on the total donation – only on the net amount received after platform and processing fees are deducted. This is not standard practice – it’s CultureTrust’s way of allowing project to keep as much of their funding as possible.
CultureTrust asks for the following materials in order to consider your project for approval:
- An articulated, clearly-defined mission and vision for the project.
- Clear, realistic goals for the project.
- For Comprehensive (Model A) fiscal sponsorship: Initial funding of $10,000 or more in actual cash or pledges from individuals, organizers, or funders.
- For Pre-approved Grant (Model C) fiscal sponsorship:Initial funding of $100 - $4,999 in actual cash or pledges from individuals, organizers, or funders.
- A completed project budget reviewed by staff
- If not, a budget template located here can be used.
- A fundraising plan or business plan for project.
- If not, a fundraising template located here can be used.
- A marketing plan or business plan for project.
- If not, a marketing plan template located here can be used.
- A web presence (website OR social media, etc.) for project.
CultureTrust brings on new projects throughout the year.
Our ability to take on new projects is generally limited. Our staff and Board of Directors approves each new project, and acceptance as a fiscally sponsored project is based on a comprehensive conversation ahead of intake and onboarding. Please contact us for more information.
Are you interested in joining us? Please fill out our inquiry form.
