Fiscal Sponsorship

When you create your ioby campaign page, under “Group Tax info,” you’ll share whether or not you already have a fiscal sponsor. If you do, great! You’re good to go. If you don’t have a fiscal sponsor, check “no” and we’ll reach out to provide more information about our fiscal sponsorship and what you’ll need to do for us to be your fiscal sponsor.

At the conclusion of your crowdfunding campaign, we’ll email you a straightforward fiscal sponsorship contract. As your fiscal sponsor, ioby requires a certain level of documentation for all transactions. All project-related purchases must be substantiated by receipts or invoices. Once you’ve finished crowdfunding and are ready to receive your funds, we’ll send you a form where you’ll submit your receipts to ioby.

Like most fiscal sponsors, ioby retains a small percentage of what is raised to help cover our administrative costs of managing the funds. We’ve kept our fee to 8%*--much lower than most--in an effort to best support your community-based work.

*Please note that as of June 30, 2023 our project fee has been updated to 4%, and our fiscal sponsorship fee has been updated to 8%

ioby sends an automatic thank you email to every donor to an ioby campaign. This email includes text confirming that their donation is tax-deductible to the fullest extent of the law, and serves as your donors’ documentation of their charitable donation.

ioby supports crowdfunding campaigns by local leaders who are working to build a base of supporters and donors in their community. If you are NOT interested in running a crowdfunding campaign, we’re not the right fiscal sponsor for you. Check out our tips on finding a fiscal sponsor here.

However, if you receive a grant during the course of your ioby crowdfunding campaign, we can accept it on your behalf and apply it toward your total fundraising goal online. The amount disbursed to you at the end of your campaign would be the total of any grant funds plus all the online donations you’ve raised, and ioby’s fiscal sponsorship fee would apply to that total. Please note that in order for us to receive a grant on your behalf, the grant must not exceed 75% of your crowdfunding budget. You must crowdfund at least 25% of your budget.

Awesome! Direct aid—giving financial assistance directly to individuals—can be a powerful and relatively simple way of lending a hand in challenging times. ioby can offer support and fiscal sponsorship to direct cash assistance campaigns, there are just a few additional requirements. 

Great! You are welcome to crowdfund on ioby with a different nonprofit fiscal sponsor, you'll just need to provide us with a bit more information, like their federal nonprofit determination letter. Once you've finished crowdfunding, we'll pass the funds you raise to your fiscal sponsor and they will distribute the funds to you according to the agreement you have in place.

Fiscal sponsorship is an arrangement in which a legally incorporated nonprofit agrees to accept and manage funds for another entity, such as an individual or informal group. It occurs when a group or individual wishes to receive tax-exempt contributions for charitable or community-focused activities without building a full organizational infrastructure. 

Fiscal sponsorship arrangements can vary, but two are most common:

• Comprehensive: Ongoing sponsorship and support which may include things like human resources management, IT support, and other services. If your project is raising more funds than what is described in your ioby campaign, or if you’ll need long term sponsorship that extends beyond the life of your project, comprehensive fiscal sponsorship from another organization may be an option to consider.
• Project specific: Limited to a specific project. ioby’s fiscal sponsorship is a type of project specific, and limited to the project that you’ve described on ioby.

They typically sponsor projects with a charitable purpose that is consistent with the sponsor’s own mission. They can:

• Receive and administer donations on your behalf, so that your donors can make tax-exempt contributions.
• For comprehensive sponsorship, offer a number of support services like human resources management, IT support, and other services.

In exchange for these services, most sponsors will charge an administrative fee for its services, typically a percentage of the budget of the project or program. ioby charges a 8% fee for campaigns that use ioby's fiscal sponsorship service, a charge we deliberately keep low so that you can use your funds to get good done while allowing ioby to continue to offer services to leaders like you. 

Because sponsors manage funds on behalf of another individual or group, and become responsible for those finances, they take on significant legal and financial risk. If you are seeking fiscal sponsorship from an organization, it is important that they be well-informed of the risks, and are structured to manage and accept those risks.

(Information via Community Partners)

Fiscal sponsorship can benefit you and your project in a number of ways. 

• Receive tax-deductible donations. Fiscal sponsorship allows you to receive tax-deductible donations, which may often encourage supporters to give to your project (or give more generously).
• Move quickly and get off the ground faster. Since you won’t have to undergo the formal (and often long) process of becoming a nonprofit, it can help you start working towards your goal faster than waiting to incorporate as a nonprofit. For small groups, groups with short-term goals, time-sensitive projects, and groups seeking to test-drive ideas this can be a big benefit.
• Expand your base of support. If your fiscal sponsor has a solid track record with foundations and other funders, this may benefit a “project” of that organization. If you don’t already have pre-existing relationships with funders, having a reputable charity supporting you with fiscal sponsorship could put you in a better position to secure grants or charitable donations.
• Technical and administrative support. Many sponsors provide comprehensive fiscal sponsorship, and can provide additional support like insurance, payroll and accounting space, publicity, and more. This support can help free up your time to hone in on your mission, and spend less time on administration. Because of economies of scale, your sponsor may also be able to provide these services at a lower cost than you would be able to procure them on your own.
• Lower Insurance Costs. Often, sponsors will be able to obtain lower insurance rates than would be available to a small start-up nonprofit corporation, which means savings that can be passed along to your project.

If you’ve decided to crowdfund with ioby and don’t have your own 501(C)(3) status, you might benefit from using ioby’s fiscal sponsorship service. You'll be able to receive tax-deductible donations to your crowdfunding campaign, and receive grants towards your project (as long as you crowdfund at least 25% of the total project amount).

If you’re looking for comprehensive fiscal sponsorship than what ioby offers, here are a few tips on where to look and what to keep in mind as you search:

• Nonprofits with missions similar to yours are more likely to be able to offer fiscal sponsorship. You might start with your current affiliations.
  • NEXT STEP: Make a list of the professional societies, educational associations and institutions, religious organizations, social and recreational clubs, and other groups with which you are already associated.
• The Fiscal Sponsor Directory allows you to search by state, service category, or keyword for nonprofit fiscal sponsors. Profiles include eligibility requirements, fees, services, and types of projects supported. The site also provides statistics and resources on fiscal sponsorship.
• The National Council of Nonprofits also provides very helpful suggestions for Fiscal Sponsorship Resources, including further tips and tools for finding a fiscal sponsor.
• If you're looking for more comprehensive fiscal sponsorship, you may want to check out this great guide from Candid.
• When approaching prospective sponsors, be ready to give a verbal or written proposal that explains:
  • Your project: Why it’s needed, and its goals, objectives, method, evaluation, staffing, and budget. This is similar to a grant proposal.
  • How it advances the nonprofit’s mission.
  • Other ways the nonprofit can benefit from being associated with your project.