What Are Fiscal Sponsorships?

Fiscal sponsorship is a powerful way for charitable projects or groups to make an impact without forming their own nonprofit organization. It’s a partnership where an established 501(c)(3) nonprofit, like Paramount Impact, extends its tax-exempt status to a project, allowing it to receive tax-deductible donations and grants. This arrangement lets project leaders focus on their mission—whether it’s supporting education, community development, or other charitable causes—while the fiscal sponsor handles administrative tasks like accounting, compliance, and financial reporting. It’s a win-win, offering a streamlined path to create change without the complexities of starting a standalone nonprofit.

Types of Fiscal Sponsorships

Fiscal sponsorships come in several models, each with unique structures to suit different projects. The most common models, as outlined in resources like Fiscal Sponsorship: 6 Ways to Do It Right by Gregory L. Colvin, are:

Model A (Comprehensive or Direct): The project operates as a program of the fiscal sponsor, with no separate legal entity. The sponsor takes full legal and financial responsibility, managing all funds, staff, and operations. This model is ideal for new or small projects that want to focus on their mission without handling administrative burdens.
Model B (Independent Contractor): The project is run by an independent contractor under the sponsor’s oversight. The sponsor retains control over funds but delegates project activities to the contractor, who manages their own expenses and operations.
Model C (Pre-Approved Grant): The project is a separate legal entity, and the sponsor acts as a financial steward, receiving donations and re-granting them to the project. This model suits established organizations awaiting their own 501(c)(3) status or those needing specific grant support.
Model L (Single-Member LLC): The project operates as a limited liability company (LLC) owned by the sponsor, blending legal separation with tax-exempt benefits. This model offers liability protection while allowing the project to receive funds in its own name.
Model F (Technical Assistance): The project has its own 501(c)(3) status but relies on the sponsor for administrative support, such as bookkeeping or HR, to enhance efficiency.

Each model offers unique benefits, from full operational support to greater project autonomy, depending on the project’s needs and structure.

Paramount Impact’s Model A Approach

At Paramount Impact, we proudly use Model A (Comprehensive Fiscal Sponsorship) to support our fiscally sponsored projects. As a 501(c)(3) public charity founded in 2024, we believe this model best aligns with our mission to empower communities through education, philanthropy, and support for underserved populations. Here’s why we choose Model A and how it benefits our partners:

All-in-One Support: With Model A, Paramount Impact takes care of everything—accounting, compliance, and legal responsibilities. This allows project leaders to focus solely on fundraising and creating impact, whether it’s providing educational resources or supporting community initiatives.
Quick Start: Projects can launch rapidly under our tax-exempt umbrella, bypassing the time-consuming process of obtaining 501(c)(3) status. This is perfect for grassroots efforts or urgent initiatives.
Mission Alignment: We partner with projects that share our commitment to empowering families, individuals with disabilities, or those experiencing poverty. As the project becomes part of our programs, we ensure its activities align with our charitable goals.
Expert Guidance: Our team, led by experienced professionals like Michael Glover, offers strategic support to help projects grow sustainably, leveraging our expertise in managing significant nonprofit funds.
Exclusive Portal Access: Fiscal sponsors with Paramount Impact gain access to a secure online portal, streamlining financial management. Through the portal, project leaders can:
- Use debit cards for project-related expenses.
- Manage per diem accounts for travel or operational needs.
- Pay vendors directly, ensuring smooth transactions.
- View real-time account statements to track funds and monitor financial activity.

For example, a local group providing school supplies to homeschooling families can operate under Paramount Impact’s Model A sponsorship. We handle the financial and legal details, provide access to our user-friendly portal for expense management, and support their mission to make a difference. This comprehensive approach fosters sustainable growth and maximizes community impact.

Why Choose Fiscal Sponsorship with Paramount Impact?

Fiscal sponsorship with Paramount Impact is more than just administrative support—it’s a partnership to amplify your charitable vision. By using Model A and offering our intuitive portal, we provide a turnkey solution that simplifies operations, opens doors to funding, and ensures compliance with IRS regulations. Whether you’re launching a new initiative or scaling an existing project, we’re here to help you succeed with tools and support that make financial management effortless.

Ready to bring your charitable idea to life? Contact us at team@paramountimpact.org or visit paramountimpact.org to learn how our Model A fiscal sponsorship can support your mission. Let’s make a lasting impact together!