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What Is A Fiscal Sponsor and Why Do I Need One? 

What Is A Fiscal Sponsor

Sneak Peak!  This page is a sample from the Lights, Camera, Pitch! Documentary Cash-Winning Guide (course) compliments of the instructor.

What is a fiscal sponsor?  When someone wants to give money to your documentary project, who do they make the check out to? You personally? Your production company? Or is there a better option?

Unless you're Michael Moore and expecting to make millions in profits from your documentary, you are more than likely embarking on a non-profit endeavor.

Instead of investment capital (for-profit), you will be seeking out donations (non-profit). It is preferable to offer donors the option of a tax deductible donation/gift. In order for the donor to receive a tax deduction, the gift must be made in the name of a non-profit 501©3 organization.

You can either 1) create your own non-profit or 2) partner with an existing non-profit.

The only time you might want to consider creating your own non-profit is if you anticipate producing more than two or three documentaries. Otherwise it's probably not worth the hassle. (You have to create a board of directors, submit articles of incorporation, submit annual financial statements and sometimes you have to get permits for fundraising. Application and preparation fees can range from a few hundred dollars to $1500 depending on the type of non-profit you are creating and it can take many months for the application to go through.)

My personal recommendation is to find an existing non-profit organization to be your fiscal sponsor.

Fiscal Sponsorship: 6 Ways To Do It Right
by Gregory Calvin

Fiscal Sponsorship: 6 Ways To Do It Right
by Gregory Calvin
(Buy On Amazon)

What Is A Fiscal Sponsor And Why Do I Need One?

What is a fiscal sponsor? A fiscal sponsor is a 501©3 registered non-profit organization that agrees to “sponsor” or represent your documentary project.

They agree, in a sense, to become the project's parent or guardian. As your fiscal sponsor they accept and process donations on your behalf and then transfer the money to you.

It's optimal to have a fiscal sponsor for several key reasons.

Benefits Of A Fiscal Sponsor

  1. By donating to a 501©3 non-profit organization, people who donate to your project through the fiscal sponsor are able to get a tax deduction for that gift.

  2. By partnering with an established and respected organization, it not only provides instant credibility for your project, it offers peace of mind to potential donors that their money is being handled properly.

  3. The fiscal sponsor processes all the donations whether they come in by check, online, gift of stock, life insurance, property, etc. This eliminates a huge hassle for you trying to figure out how to deal with various forms of payment. They handle receipts, accounting and legal issues.

  4. Depending on what organization you choose as your fiscal sponsor, they may also be able to provide some great perks including fundraising support, financial advice, feedback on your grant proposals, office space and access to in-house video production equipment.

  5. Since most foundations do not give grant money to individuals, the fiscal sponsor can receive grant funding on behalf of the documentary project. 

Fiscal Sponsors

As a general rule, fiscal sponsors will charge a 5-10% management fee on all the donations that come in for your project. That covers staff time to handle all the paperwork and manage your account. You may even be able to negotiate other perks.

Carol Dean of From The Heart Productions says that as part of her fiscal sponsorship program, she provides filmmakers financial advice, guidance on fundraising trailers and help with proposal packages.

Learn more about Carol's fiscal sponsorship program.

Examples of other organizations that specialize in being fiscal sponsors for filmmakers:

How To Find A Fiscal Sponsor

As long as an organization is a registered 501©3 non-profit organization, they can be a fiscal sponsor. Be picky who you choose. And realize that the smaller the organization, the easier it will be for you to create a partnership (especially if this is your first project).

A common strategy for finding a fiscal sponsor is to pinpoint a non-profit that is aligned with the subject of your documentary. For example, if you are doing a documentary on the Civil Rights, you might try to find a non-profit that is focused on Civil Rights issues. With this strategy, the non-profit may or may not charge a management fee because your documentary will directly support their mission.

The organization can also be a great resource for providing potential leads for funding within the Civil Rights community.

For a comprehensive list of fiscal sponsors: Fiscal Sponsor Directory.

Tips For Working With A Fiscal Sponsor

  • Create a written legal agreement outlining how the partnership will work, including any fees and exactly how and when the filmmaker/production company will get paid. View a sample Fiscal Sponsor agreement from the Southern Documentary Fund

  • Make sure you're working with someone you trust and who you feel is genuinely interested in your documentary project and helping you succeed.

  • Ideally, choose a fiscal sponsor located within driving distance in order to more easily meet face to face on a regular basis.

  • Unless you want to negotiate otherwise, make it clear that the filmmaker is the sole owner of the documentary, not the fiscal sponsor. (This can be very touchy since the fiscal sponsor may feel they are co-owners, particularly if they invest significant time and effort in the project. Make sure the ownership language is clear and in writing.)

  • Make it clear that the filmmaker holds all creative rights over how the documentary is put together (assuming that's the agreement you want to make).

  • Understand that all agreements will be different and must be a win-win for both the filmmaker and the fiscal sponsor.

  • Once all is agreed to, ask the fiscal sponsor to provide a strong letter of endorsement for your project that you can use to raise funds.

"Pre-Nups" Between Filmmakers & Funders

Ellen Schneider, former executive producer of PBS's P.O.V., is the founder of an organization called Active Voice. She recognizes that there are some touchy issues when it comes to filmmakers and funders.

“Who owns the rights if I give you money?”

“Can I see rough cuts of the film?”

Schneider says filmmakers and funders MUST have a clear understanding about the process before a partnership is formed and money exchanges hands. This issue also applies to fiscal sponsors.

Active Voice created “The Prenups” and identified three key areas that must be resolved before a filmmaker and funder should “tie the knot”:

  1. Visions and Expectations: What is each party's background? How's the chemistry? What are each party's goals? What's the final product(s), and where will it be shown in order to have the desired impact?

  2. Roles and Participation: Who controls the story? What's the process for giving input during production, and who gives it?

  3. Business and Legal: Who owns the film? How will it be distributed? What's a reasonable budget? How long will it take to make? What about legal liability? Reporting?

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