There's a growing trend among US nonprofits to use what's known as a "fiscal sponsor"a 501(c)(3) organization that allows foreign nongovernmental organizations and smaller entities in the US to have "essential resources," as the National Network of Fiscal Sponsors puts itto expand their reach beyond the US.
But there's a catch: Fiscal sponsors have to adhere to global compliance rules, which can be expensive and time-consuming.
Here's what you need to know: The basics: A fiscal sponsor is a 501(c)(3) organization that allows foreign NGOs and smaller entities in the US to have essential resources, such as accountants, lawyers, and program and fundraising teams.
Donors can get tax deductions on their giving if they qualify, and the National Network of Fiscal Sponsors has more details on how to use a fiscal sponsor.
Why? One reason is that nonprofits must deal with ever more complexity in every aspect of their operations.
Another is that with budgets of less than $1 million, "it's almost impossible because of limited financial resources" to expand internationally.
Plus, if a fiscal sponsor has a major donor, they still have to adhere to global compliance rules.
The National Network of Fiscal Sponsors has more details on how to use a fiscal sponsor.
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