Frequently Asked Questions

  1. What services does Community Initiatives provide its fiscally sponsored projects?
  2. What is the relationship between a fiscal sponsor and its projects?
  3. How and why may the relationship end?
  4. What does Community Initiatives charge for its services?
  5. Does it matter where I set up my project?
  6. Are project donations accepted from any source?
  7. What types of activities does Community Initiatives accept for sponsorship?

1. What services does Community Initiatives provide its fiscally sponsored projects?

We pride ourselves on providing prompt, attentive service in the following core areas:

  • Financial management
  • Human resources/payroll/benefits
  • Grants management

Please see our services pages for more information on each of these areas.
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2. What is the relationship between a fiscal sponsor and its projects?

Greg Colvin, in his groundbreaking book Fiscal Sponsorship: 6 Ways To Do It Right, identified six ways to structure a fiscal sponsorship relationship. Community Initiatives is open to using any of these models, but has found, in practice, that three models have served our fiscally sponsored projects most usefully. The most common model (about 90 percent of our projects) is the Direct Project, or “Model A” relationship, in which the project and Community Initiatives are legally considered one and the same: Community Initiatives receives assets on behalf of, and incurs all liability for, the project. Please see descriptions of “Model A,” “Model B,” and “Model C” project sponsorships. Note: the nature of a project’s fiscally sponsored relationship with Community Initiatives is determined at the time of acceptance by our Board of Directors. To learn more about the policies that govern these relationships, please see our Mutual Expectations.

Community Initiatives follows the Best Practices of the National Network of Fiscal Sponsors (NNFS). The NNFS promotes the understanding and professional practice of fiscal sponsorship.  While models and missions differ, the organizations that comprise NNFS share common questions and aspirations to ensure responsible use of the tool of fiscal sponsorship.

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3. How and why may the relationship end?

Fiscally sponsored projects (FSPs) terminate their work with Community Initiatives in various ways. An FSP may do any of the following:

  • Complete the project work. Our projects typically end when they have completed their work and spent down all their funds. If funds remain after the project is completed, the FSP may designate a like-minded 501(c)(3) to receive the funds; if appropriate, the balance may be returned to the donor or granted to Community Initiatives.
  • Transfer to another 501(c)(3) organization that will serve as its fiscal sponsor. Any remaining project funds on account with Community Initiatives are transferred to the new fiscal sponsor, and the FSP’s grantors are notified of the transfer of sponsorship.
  • Evolve into its own 501(c)(3). This new nonprofit organization assumes responsibility for its own operation, and any remaining project funds on account with Community Initiatives are transferred to the new entity. Community Initiatives staff works with the FSP to make this a smooth transition.
  • Merge with another 501(c)(3) organization. In this case, a merger agreement is executed between the two entities and the FSP’s funds are transferred to the new entity.
  • Be terminated by Community Initiatives. Community Initiatives’ fiscal sponsorship of a project may be terminated without advance notice to the project in either of the following circumstances:
    • The FSP’s account has a zero cash balance
    • No significant activity has occurred in connection with the project for one year or longer

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4. What does Community Initiatives charge for its services?

Community Initiatives will charge each FSP an administrative fee equal to 10% of its gross receipts. Receipts attributable to grants from government entities or public agencies are subject to a 15% administrative fee; this will be automatic in all cases when an A-133 audit is required. Projects must receive a minimum of $24,000 in annual revenues during the fiscal year, resulting in a minimum annual FSP administrative fee of at least $2,400. Community Initiatives’ fiscal year begins July 1 and runs through June 30 of the subsequent year. Fee tracking resets on July 1 every year. If insufficient revenue has been received during the fiscal year, FSPs may be subject to a $200 monthly minimum service fee which is the responsibility of the FSP project director. (If and when subsequent grant or donation revenue is received, these assessments may be rebated.) At fiscal year end in June, additional minimum assessment fees will be charged so that total fees equal at least $2,400. In addition to the administrative fee on gross receipts, Community Initiatives will retain all interest earned by an FSP’s funds on deposit with Community Initiatives. FSPs are subject to other charges:

  • For setting up a new employee on payroll and benefits ($50 per employee);
  • For requests for manual checks outside of the weekly check run ($50 per check);
  • For extraordinary costs, for which the FSP will be given notice. These include, for example: legal fees, additional insurance, staff time in managing FSP legal matters.

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5. Does it matter where I set up my project?

Most of Community Initiatives’ projects are located in California, but we are now accepting projects located or doing business in other states.

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6. Are project donations accepted from any source?

Yes, in U.S. currency only. These can include earned revenues or contributions from foundations, corporations, governments, or individuals. We can also accept gifts of stock. Note: we require that a project provide $24,000 in identified funding (in-hand or formally committed) in order to be considered for fiscal sponsorship.

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7. What types of activities does Community Initiatives accept for sponsorship?

We accept all types of charitable activities. Historically, our projects have been categorized as follows: Arts & Culture (11%), Education (11%), Environment (4%), Health (10%), Human Services (21%), and Public Affairs (43%). These content areas also represent the following types of projects:

  • New, incubating organizations
  • Projects of limited duration
  • Community efforts responding to crises and urgent calls to action
  • Collaborative, philanthropic efforts among foundations

These are discussed in greater detail, with examples, in our brochure/annual report.

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“Community Initiatives is a great fit; they manage our finances and human resources, including payroll, benefits management, insurance, and employer-paid taxes. Relying on Community Initiatives’ administrative expertise to handle these back-office details allows Active Voice to concentrate on its mission and grow.”
Ellen Schneider Founder, Active Voice