Fiscal sponsorship is typically a formal relationship between a nonprofit organization that is recognized by the Internal Revenue Service as 501(c)(3) tax-exempt (the fiscal sponsor) and an organization that may lack exempt status (the sponsored organization or project) to allow the sponsored organization to receive tax-deductible donations. This article will discuss why organizations may seek a fiscal sponsor as well as the factors a nonprofit should consider before becoming a fiscal sponsor.
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Pro Bono Partnership of Atlanta