A fiscal sponsorship agreement is a legal contract between a nonprofit organization and an individual or entity that agrees to provide financial support and administrative oversight to the nonprofit to help them achieve their charitable goals. Fiscal sponsorships have become increasingly popular in the nonprofit world due to the flexibility they offer and the potential for cost savings.
If you are considering entering into a fiscal sponsorship agreement, it is important to review sample agreements to understand the terms and conditions typically included in these contracts. Below are some common elements of a fiscal sponsorship agreement:
1. Purpose and scope: The agreement should clearly state the purpose of the fiscal sponsorship and the scope of the services to be provided by the sponsor. This may include administrative, financial, and fundraising support.
2. Term and termination: The agreement should specify the length of the sponsorship and the conditions under which it may be terminated by either party.
3. Financial arrangements: The agreement should outline how funds will be managed and disbursed, including any fees or charges for services provided by the sponsor.
4. Reporting requirements: The agreement should stipulate the reporting requirements for both the sponsor and the nonprofit, including financial and programmatic reporting.
5. Intellectual property: If the nonprofit is creating intellectual property, such as a new program or product, the agreement should address ownership and use rights.
6. Liability and indemnification: The agreement should address liability issues and outline the responsibilities for indemnification.
7. Governance: The agreement should specify the roles and responsibilities of each party, including any decision-making authority.
8. Conflict of interest: The agreement should address potential conflicts of interest and establish a process for resolving them.
9. Non-compete clause: This clause may be included to ensure that the sponsor does not compete with the nonprofit in the same market or program area.
By reviewing sample fiscal sponsorship agreements, you can gain a better understanding of the terms and conditions typically included in these contracts. Keep in mind that each agreement is unique and should be customized to meet the needs of your specific organization and sponsor. It is always a good idea to consult with an attorney to review and negotiate any fiscal sponsorship agreement before signing.