Incubating for Impact: Considerations for Social Impact Leaders Using Fiscal Sponsorship

Jessica Love, Monique Mehta, Mariana Botero

Over the past 15 years, Arabella Advisors has supported the incubation of hundreds of social-impact initiatives. In this paper, experienced practitioners map the life cycle of a fiscally sponsored project and suggest questions for project leaders and funders to explore at each stage.

Fiscal sponsorship enables social impact leaders—funders and founders—to launch new charitable ideas or initiatives quickly and efficiently by building on administrative and operational support from an established nonprofit (the fiscal sponsor). Fiscal sponsorship can offer streamlined services and benefits across many projects, delivering economies of scale and access to deep operations expertise while allowing projects to focus on their individual impact goals. At a basic level, fiscal sponsors extend their own 501(c)(3) or 501(c)(4) status to a project, allowing it to receive philanthropic gifts. Beyond that, fiscal sponsors provide a wide range of accounting, human resources, and operational support.

Fiscal sponsorship comes with numerous benefits and considerations, but it’s almost never a static endeavor. We hope that, with this paper, nonprofit leaders will be empowered to identify opportunities, anticipate challenges, and move more quickly and seamlessly toward fulfilling their missions.

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