Fiscal sponsorship501(c)(3) nonprofit status in just 24 hours for your mission
Organizing an event, project, or organization to serve the public good or your community? Consider fiscal sponsorship before the pain of paperwork distracts you from your goals.
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Why organizers go after 501(c)(3) statusEvery year, 1.6 million nonprofits in the U.S. apply for and renew 501(c)(3) status through the IRS for charitable recognition and tax exemption for their funding. It can take anywhere from 2-12 months to hear a decision back from the IRS, and in general, nonprofit organizers should be prepared for:
    $3,000 in up-front costs, from forms to state fees to support from legal counsel
    The potential for the IRS to reject an application
    Hiring bookkeepers and accountants to prepare taxes and provide upkeep annually to stay in good standing
    Closing costs averaging around $5,000 if you lose or terminate status
Legal status sounds great and all, but why go through the hassle of applying when it’s so expensive and time consuming?Because as a legally recognized 501(c)(3) nonprofit in the U.S., your organization gains access to loads of legal tax benefits like:
    The ability to receive tax deductible donations from sponsors.
    Reduced taxable income for your U.S. supporters, which incentivizes giving.
    Exemption from U.S. federal income tax and unemployment tax.
    Potential exemption from state income, sales, and employment taxes.
    Potential for reduced rates on postage, marketing, advertising, legal counsel, and more.
Unfortunately between the costs and time needed to organize a nonprofit, many charitable initiatives are prevented from exiting an idea phase or progressing at a pace originally hoped. Imagine how much more valuable impact could happen on the world if these barriers didn’t exist.As it turns out, there’s an alternative route for startups, student-led initiatives, or anyone looking to avoid a headache with the IRS to obtain all the benefits of 501(c)(3) status. That’s where fiscal sponsorship comes in.
Fiscal Sponsorship?By legally working with an existing nonprofit offering fiscal sponsorship, projects and events can claim most of the legal benefits of individual 501(c)(3) status. Piggy-backing off this existing status, organizations also gain access to resources from their fiscal sponsor like:If you’re brand new to nonprofit organizing or unsure where your project will take you, fiscal sponsorship is a great tool to help manage your finances and gauge whether becoming an independent nonprofit down the line is practical or financially feasible.
Requirements for Fiscal SponsorshipDepending on the fiscal sponsor you choose, requirements for working together can vary. Fiscal sponsors generally ask that your nonprofit’s goals be similar to theirs. They also usually ask that your organization or event commits to remaining charitable in nature and refrains from activities that may result in loss of 501(c)(3) status.
HCB, the #1 fiscal sponsorWhile many fiscal sponsors require that their partners relate to their mission in similar ways, at HCB, we’ve built our infrastructure to support hundreds of causes in all areas of charitability.Check out some of the resources we’ve built our fiscal sponsorship foundation on:Looking for nonprofit status and not a religious or political organization? We’d love to meet you and chat about working together. Feel free to apply here or email our team if you have more questions about fiscal sponsorship!
At its core, Hack Club is a nonprofit encouraging students to learn how to code by building and making cool things. HCB was built out by teenagers at Hack Club and continues to be a real-world space that high schoolers can contribute to every day.