This is a sample agreement. Actual agreements with specific projects may be different.
GRASSROOTS CONNECT FISCAL SPONSORSHIP AGREEMENT
This Fiscal Sponsorship Agreement (“Agreement”) is made on _______, 202_, by and between Grassroots Connect and ______________ (“the Project”).
Grassroots Connect: Grassroots Connect is organized as a public benefit corporation as defined in ORS 65.001(31). Grassroots Connect is organized exclusively for charitable and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986 (or the corresponding provision of any future United States Internal Revenue Law), and subject to the limitations stated in the Articles of Incorporation, to engage in any lawful activities, none of which are for profit, for which corporations may be organized under Chapter 65 of the Oregon Revised Statutes (or its corresponding future provisions). Grassroots Connect organization is formed to fulfill the expressed mission of supporting and strengthening the capacity of locally-based, community social justice projects.
The Project: The Project is an unincorporated organization formed to ________[projects purpose]_______________. The Project’s mission is in direct alignment with Grassroots Connect’s previously stated mission and expressed purpose as outlined in Grassroots Connect’s bylaws.
The Agreement: Grassroots Connect is willing to receive tax-deductible charitable contributions on behalf of the Project. The Project will have direct and unrestricted access to the funds to be used toward the Project’s intended goal/purpose. Grassroots Connect will provide simplified options to track spending and maintain legal compliance, transparency, and accountability to donors and the broader community of stakeholders and observers.
By entering into this Agreement, Grassroots Connect and the Project agree to the following terms and conditions:
- Receipt of Funds: Grassroots Connect agrees to receive contributions and gifts, including grant funding if awarded, to be used for the Project, and to distribute those funds to the Project. All funds received for use by the Project shall be deposited and held in an interest-bearing bank account specifically for the Project. The Project will have access to the bank account.
- Reporting Charitable Donations: Grassroots Connect agrees that all contributions it receives for the Project will be reported as contributions to Grassroots Connect as required by law. Grassroots Connect agrees to notify the Project of any change in its tax-exempt status.
- Protection of Tax-Exempt Status: The Project agrees not to use funds in any way that would jeopardize the tax-exempt status of Grassroots Connect. The Project understands that the Grassroots Connect Treasurer and other board officers will review the Project’s financial activity and status quarterly, or more if needed. Grassroots Connect will also receive a copy of all bank correspondence, to maintain regulatory oversight. The Project agrees to comply with any written request by Grassroots Connect that it cease activities that Grassroots Connect officers believe might jeopardize Grassroots Connect’s tax-exempt status. The project also acknowledges that Grassroots Connect may terminate this Agreement in the event that the Project fails to comply with any such request. Any changes in the purpose for which contributions are used must be approved in writing by Grassroots Connect before implementation. The Project agrees to the following:
- The Project will follow all federal, state, and local laws.
- Project funds will not be used for any personal purpose, such as personal items or entertainment.
- Project funds will not be used to provide material support for a terrorist organization.
- The Project will not participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, ballot measure, or initiative.
- The Project will not use more than an insubstantial portion of funds to participate or intervene in lobbying or attempt to influence legislation.
- Employees: The Project agrees not to hire any paid employees. The Project can contract with contractors for services.
- Use of Funds: Grassroots Connect authorizes the Project to make expenditures, which do not exceed total contributions for the Project, for use in the Project. The Project agrees to use any and all of the Project’s funds solely for legitimate expenses of the Project.
- Reporting Requirements: The Project shall submit a full and complete financial and activity report to Grassroots Connect at least quarterly: within thirty (30) days after the end of each quarter of the calendar year, specifically thirty (30) days after March 31st, June 30th, September 30th, December 31st. The report shall list all income and expenditures and include receipts for all purchases.
- Financial Accounting and Reporting: Grassroots Connect will maintain books and financial records for the Project in accordance with generally accepted accounting principles. The Project’s revenue and expenses shall be separately recorded in the books of Grassroots Connect. Grassroots Connect will provide the Project with an annual report, within three months following the end of the fiscal year of Grassroots Connect.
- Minimum Balance: Grassroots Connect will open the Project bank account with $100 in it. The Project agrees to leave that initial $100 in the account to avoid monthly charges.
- Fundraising: The Project may solicit contributions that are earmarked for the activities of the Project. Grassroots Connect shall be responsible for the processing and acknowledgment of all monies received for the Project, which shall be reported as the income of Grassroots Connect for both tax purposes and for purposes of Grassroots Connect’s financial statements.
- Project Representatives: The Project designates __________________ and ____________ to act as Project Representatives. The Project Representatives shall act as principal coordinators of the Project’s business with Grassroots Connect, and shall be authorized signers on the Project’s bank account.
Project Representatives shall have regular meetings/calls with representatives from the Grassroots Connect Steering Committee.
- Grants: The Project must have prior written approval from Grassroots Connect to solicit grants on behalf of Grassroots Connect that are earmarked for the activities of the Project.
- Remuneration to Grassroots Connect: Grassroots Connect will take no percentage of money fundraised by the Project.
- Term of Agreement: This Agreement shall remain in effect until terminated.
- Termination: Either party may terminate this Agreement by giving 30 days’ written notice to the other party. However, if Grassroots Connect reasonably determines that its continued fiscal sponsorship of the Project may jeopardize Grassroots Connect’s tax-exempt status, Grassroots Connect may terminate this Agreement immediately upon notice to the Project.
- Successor Sponsor: If the Project will continue to exist but Grassroots Connect terminates its fiscal sponsorship of the Project, the Project may identify another nonprofit corporation that is tax-exempt under IRS Section 501(c)(3), is not classified as a private foundation under Section 509(a), and that is willing and able to sponsor the Project (the “Successor”). If and/or when a Successor is identified, the balance of assets held by Grassroots Connect for the Project, together with any other assets held or liabilities incurred by Grassroots Connect in connection with the Project, shall be transferred to the Successor within 30 days, subject to the approval of any third parties (including funding sources) that may be required. If the Project has formed a new organization qualified to be a Successor as set forth in this Paragraph, such organization shall be eligible to receive all such assets and liabilities as long as such organization has received a determination letter from the Internal Revenue Service which states the new organization is exempt from federal tax under section 501(c)(3) of the Internal Revenue Code. If no Successor is found one year after termination, Grassroots Connect may allocate the Project’s assets and liabilities in any manner consistent with applicable tax and charitable trust laws and other obligations.
- Inactivity: If the Project does not respond to communication requests from Grassroots Connect for one year the Project will be considered inactive, at which time Grassroots Connect may allocate the Project’s remaining funds in any manner consistent with applicable tax and charitable trust laws and other obligations.
- Confidentiality: Names of people associated with the Project will not be published publicly by Grassroots Connect. But Grassroots Connect cannot guarantee the confidentiality of the authorized signer’s name(s).
- Waiver and Acknowledgment: The Project acknowledges that Grassroots Connect will devote such time to management of the Project’s funds and to general supervision of the Project as it sees fit and in its sole discretion. The Project hereby waives and releases Grassroots Connect from any and all claims, loss, damage, liability and expense, including without limitation attorney’s fees and costs (collectively “Claims”), known or unknown, arising out of or in any way related to the Project, except damages arising solely from Grassroots Connect’s gross negligence or willful misconduct.
- Severability: Each provision of this Agreement is separately enforceable, and the invalidity of one provision will not affect the validity or enforceability of any other provision. This Agreement shall be interpreted and construed in accordance with the laws of the State of Oregon.
- Entire Agreement: This Agreement constitutes the only agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. This Agreement may not be amended or modified, except in a writing signed by all parties to this Agreement.
Please look through this FAQ to learn more about what it would mean to work with us.
What does 'fiscal sponsorship' mean?
Instead of starting your own nonprofit, you can work with an existing 501(c)(3) public charity under an arrangement known as fiscal sponsorship. You can then receive the benefits of being a nonprofit such as tax-deductible donations and the ability to receive grants, under the sponsor's exempt status.
What kinds of projects does Grassroots Connect sponsor?
We work with liberatory grassroots social justice projects that are connected to the Eugene/Springfield regional community and have demonstrated that they will follow through.
Ideally the project would: Have at least two dedicated people, have a mission statement or something that lays out what they are doing, and already be active in some way in physical reality.
Projects must demonstrate a commitment to Black and POC liberation, decolonization, feminism, trans-inclusivity, accessibility, anti-authoritarianism, horizontally structured, anti-capitalist, pro-sustainability, etc.
Projects must also align with our princples.
Will Grassroots Connect give me money or fundraise for me?
No. We do not provide money or fundraising services. We will get you set up with a bank account and can help you get set up with other fundraising tools.
How much does Grassroots Connect charge?
Most fiscal sponsors take 5-10% of the money their sponsored projects bring in. We don't want to profit off of your work so we have decided to not take a percentage of anything you fundraise.
We will have fundraising events to cover our costs and ask that projects help promote them.
Is Grassroots Connect going to take over my project?
No. We want to give you access to the advantages of being a registered non-profit organization without you having to deal with the government.
Legally, being fiscally sponsored means technically being apart of the sponsoring group. The government doesn't allow non-profits to just give that advantage to anyone. At Grassroots Connect, our goal is to shield you from from the bureaucracy as much as we can, and to make things as easy as possible, so you can continue operating as you want to.