Nonprofit vs. fiscal sponsor: how much time does the application process take?

By M. Melanie Beene

Now that we’ve covered the costs of starting a nonprofit vs. becoming a fiscal sponsor, let’s address the issue of time involved in each endeavor. If you intend to start your own nonprofit organization, you will need to allocate time to the following legal matters:

  • Finding a reputable nonprofit attorney
  • Meeting with that attorney
  • Providing the attorney with written materials
  • Reviewing the materials the attorney has prepared (articles of incorporation and by-laws)
  • Waiting for the state to respond to your filing for incorporation
  • Meeting with your attorney to file the IRS 1023 application
  • Reviewing the draft 1023 application
  • Submitting the 1023 application
  • Waiting for your application to be approved.

This list does not include time you will spend on developing your organization’s programming, budget, and fundraising plan.

At this juncture, due to a backlog at the IRS, the average time between applying for and receiving a determination on your application can be six to 18 months. So you should plan on this option taking a minimum of a year before you can start your nonprofit organization.

With fiscal sponsorship, you should allocate time to:

  • Find fiscal sponsors in line with your nonprofit objectives
  • Meet with those fiscal sponsors
  • Evaluate your options and choose the best sponsor for your needs
  • Provide the fiscal sponsor with written materials (usually an application)
  • Wait for the fiscal sponsor to act on your application

This process can take from one week to two months on average, giving you a headstart of close to a year on serving your organization’s mission.

Posted April 11, 2014 in Fiscal sponsorship

2 thoughts on “Nonprofit vs. fiscal sponsor: how much time does the application process take?

  1. Melanie, I’m delighted to follow these helpful blog posts. Many thanks to you and Clair. One small thing I would add to the early steps of creating a nonprofit organization is defining your statement of purpose, which will become part of the forms you will file.

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