Fiscal sponsorship is an excellent alternative to investing your time and money into establishing a 501(c)(3) tax-exempt organization. Many individual donors, foundations and corporate funders will only donate to an established 501(c)(3) tax-exempt nonprofit organization. When raising funds for socially beneficial creative projects, Fiscal Sponsorship is a valuable fundraising tool that can expand your fundraising options and allow you to apply for and accept such funding.  Often Fiscal Sponsorship is a good choice when:

• An idea is being tested or incubated.
• The project involves the work(s) of a single individual or collaborative group.
• The project leaders are not prepared to manage the administration.
• The project and/or funding is time sensitive.

The two most common models of fiscal sponsorship are referred to as comprehensive (Model A) and the pre-approved grant relationship (Model C). The National Network of Fiscal Sponsors (NNFS) provides the following definitions:

Comprehensive  (Model A)

In a Comprehensive Fiscal Sponsorship relationship, the fiscally-sponsored project becomes a program of the fiscal sponsor, and is a fully integrated part of the fiscal sponsor that maintains all legal and fiduciary responsibility for the sponsored project, including its employees and activities. This model of fiscal sponsorship is particularly valuable when a project has employees.

Pre-approved Grant Relationship  (Model C) – Compathos operational framework  

In a Pre-Approved Grant Relationship Sponsorship, the fiscally-sponsored project does not become a program belonging to the sponsor, but is a separate entity responsible for managing its own tax reporting and liability issues. In addition, the sponsor does not necessarily maintain ownership of any part of the results of the project’s work—ownership rights may be addressed in the fiscal sponsor agreement and could potentially result in some form of joint ownership. The sponsor simply assures that the project will use the grant funds received to accomplish the ends described in the grant proposal.

Compathos Foundation uses the Pre-Approved Grant Fiscal Sponsorship “Model C”). As such, the sponsored project does not belong to Compathos and is responsible for its own legal, tax, and accounting affairs. The role of Compathos is to enable the project to receive tax-exempt donations and grants by overseeing the use of project funds.

Compathos sponsors creative projects that are educational and charitable in nature. These include documentaries, arts related, music, interactive, experimental or new media technologies such as augmented or virtual reality, as well as media-rich P2P collective learning platforms. We sponsor documentary and new media projects in all phases of development including: production, post-production, distribution, and community engagement.

Projects must have an educational, charitable and public benefit or social mission that creates community or pertains to the common good. Projects we sponsor are typically funded by donations, grants, crowdfunding and/ or the artists themselves. You must apply separately for each project you work on. Given our bylaws and stated mission, we do not sponsor projects that are directly affiliated with political parties or religious groups.

If you have any questions about whether your project qualifies, or if you are uncertain that the project is a good fit, please contact us before proceeding with the application process at info@compathos.com.

We do not fund-raise for your project, nor do we provide grant writing services. Each project is responsible for raising its own funds. As a fiscal sponsor, we assist by guiding you to grant-related resources, providing necessary sponsor information for grant proposals, and offering advice whenever possible. We offer the use of various crowdfunding sites where we are a verified nonprofit for the purpose of tax exempt contributions for donors.

Fiscal sponsorship programs require administrative, legal, insurance and accounting costs. The fee covers the programs related expenses as well as some of the overhead associated with running a nonprofit organization and making valuable services available to our members.  Our fees are competitive with other fiscal sponsorship programs that offer similar services and resources.

There is a $75 nonrefundable application processing fee when you apply. We charge a 5-7% administrative fee for grants and donations received on behalf of a sponsored project (8% fee for government grants). Our fees are low compared to other fiscal sponsorship programs that offer similar services and resources and are subject to change at the time of annual review. 

Promotional assistance, features on our websites, partner websites, online events, newsletters, and social media, as well as distribution and engagement strategies and consultation require an additional administrative fee.  Please contact us at info@compathos.com to discuss your specific needs. 

Typically we do not approve secondary sponsorships. However, in situations where a specific grant requires an in-state fiscal sponsor in a state where we are not registered (California), you may be free to pursue secondary fiscal sponsorship with a local organization in the state where you will be applying for the grant.

You must apply separately for each project you are working on. If you are applying for sponsorship for more than one project, you must be able to show in your application that you have the resources to work on more than one project at a time and explain how those resources will be divided between active projects.  

Yes. You do not need to be a U.S. citizen to apply for fiscal sponsorship with Compathos. You should note that there may be mandatory IRS withholding requirements of as much as 30% depending on the country you live in and where funds are to be spent. If you are producing a film or creative project outside of the U.S. we can fund international projects directly. If you are producing any part of a film in the U.S. at least one of your directors will need to have a SSN or an LLC with an Employer Identification Number for IRS tax reporting requirements.  Please contact us before proceeding with an application if you are not a US citizen at info@compathos.com

You should submit a detailed budget that is as well researched and thought out as possible including actual dollar amounts for projected expenses. We realize that project related costs and services can change and revisions to your budget are normal as your project progresses. For projects in early development, a shorter development budget which can be expanded are acceptable.  If your project is in production and/or post-production, a comprehensive budget encompassing all phases of production is required. We also welcome finished documentaries, media campaigns and creative projects that are seeking sponsorship for distribution, engagement and/or outreach.

Budgets must account for the rental or purchase (whichever is less expensive) of equipment directly related to your project. Budgets should include a salary within fair industry-standards for yourself as project manager or director. Your budget should also contain a revenue section along with a list of prospects and targets. Any subsequent amendments to the budget must be submitted for approval. Sample Budget Template 

Yes. Compathos is legally responsible for all funds that come through the fiscal sponsorship program and appropriate record keeping is mandatory. As a project director, you are legally and contractually responsible for the accounting and reporting of how the funds you receive are spent on your project. If your project is in an underdeveloped country where receipts may not always be available, you can request hand written receipts for purchases related to the project that include purchase total, and name and address of the vendor.

You can pay for any approved project-related expense with money from your fiscal sponsorship account. You should refer to the budget that was approved with your application for any questions about what is and is not an approved expense or line item. Funds from your fiscal sponsor account should only be spent on project–related expenses. Any misuse of funds could have serious legal consequences for you, your project, Compathos Foundation, your donors, and foundations who have given to your project. You will be required to report back to Compathos on how all funds are spent and may be required to provide receipts, invoices or proof of payment at any time. If you have any concerns about what qualifies as a legitimate project related expense please contact us at info@compathos.com.

You are not required to have a separate bank account for your project, but we highly recommend it. Keeping track of finances for tax purposes is much easier with a dedicated account, so as an individual consider a separate bank account specifically for your project.  To set up an LLC bank account, you will need to work with an accountant/tax professional and ensure tax reporting is up to code.

Whether you choose to make your project an LLC or  a sole proprietorship – it will not affect your taxes. You will need to make that decision based on your own liability protection requirements. When starting a new bank account exclusively for the project under the project name, you will I need a new federal tax ID. Check out this website for help. We request to review your budgets and spending periodically to ensure funds are being spent correctly, however the tax reporting of your entity, LLC or your own individual account is up to you.

Compathos can disburse funds to an International account; however, there will be an additional charge to cover transfer fees or outgoing wire charges. We apply extra scrutiny to overseas projects to align with U.S. regulations regarding offshore disbursements.

We can issue a receipt for donations for non-cash tangible goods that are used directly for your project. However, we cannot issue receipts for donated space, rent or large ticket items. The receipt we issue, in accordance with IRS regulations, will not specify a dollar amount for the deduction but will describe the goods donated. The donor has the responsibility of quantifying the donation and confirming it’s deductibility and you are responsible for accounting on how the donated goods were used when you file your reports. We do not issue receipts for donated professional services as they are considered volunteer work and are non-deductible by law. Regarding questions about the deductibility of a non-cash contribution please contact your tax professional.

Methods of payment currently include checks, PayPal and Paypal Giving. The preferred method is a check made out to Compathos Foundation specifying the project name. Credit card and Paypal services add an additional processing fee not covered by our admin fee. Wire transfers are not standard and are require an additional charge. We do not accept stock donations at this time.

You are responsible for reporting all income, including money received through fiscal sponsorship, to the IRS. You will receive a 1099 from us in January, at the end of each calendar year indicating that you accept funds through our program. A 1099 is a report of Miscellaneous Income over $600 for services paid to an individual, partnership, or estate. Please contact us at info@compathos.com for team members who are not U.S. citizens as they require separate forms.  

Typically, if you keep track of the money received and spent on project related expenses which are written off as expenses, you should only owe taxes on your project related salary.  We do not guarantee that you will not incur any tax liability and we encourage you to consult your own tax professional regarding your unique situation as we are not qualified, nor permitted to answer specific tax related questions.

Yes. We can process and accept matching gifts from businesses when an employee has made an eligible donation. Each company has their own rules and procedures for processing these donations. Employees or businesses who would like to make eligible gifts should contact the appropriate person at their place of employment for details on how to proceed. After a matching gift has been initiated, please let us know that a matching donation will be arriving and ask your company to reference the project you are donating to somewhere on the check or accompanying letter.

You can receive foreign funding, however, the tax receipt provided to donors is only valid in the United States. Likewise, U.S. donors wishing to contribute to out of country projects cannot  receive tax deductions unless it is through a 501(c)(3). Please consult with your non U.S. government and/or tax professionals regarding questions associated with donating to a U.S. charity or nonprofit organization.

We generally write checks on a bi-monthly basis or a timeline based on the project requirements and Agreement. You can request additional funds by contacting us and properly documenting your prior expenses.