Fiscal Sponsorship Program | Frequently Asked Questions
Frequently Asked Questions
Fiscal sponsorship is a formal arrangement in which a 501(c)(3) nonprofit sponsors a project that lacks tax-exempt status and is in keeping with the sponsoring nonprofit’s mission. The specific model of sponsorship The Redford Center offers is referred to as a “pre-approved grant” relationship. The pre-approved grant model differs from the “direct project” model in that the fiscally sponsored project does not become a program that legally belongs to the sponsor and that is implemented by its employees. The pre-approved grant model means that you, the filmmaker, own the rights to your project and retain creative control. Fiscally sponsored projects are able to seek grants and tax-deductible donations in support of the film project.
In raising funds for film projects, you will find that there are many individual donors, foundations, and other funders that will only donate to an established 501(c)(3) tax-exempt nonprofit organization. Starting your own 501(c)(3) as an alternative is a very time-consuming and expensive process.
The Redford Center sponsors film or video projects in any stage of production that further the charitable, tax-exempt purpose of our 501(c)(3), to advance education to improve society and the environment. The Redford Center’s mission is to transform social and environmental issues into relatable stories, films, and campaigns that inspire positive change. We get involved where there’s a pressing need for awareness and hope, and where public engagement and the right timing can make all the difference.
You are responsible for soliciting and raising your own funding. We can help guide you to the right resources and answer any questions you have, but you will own the fundraising outreach effort.
A program like this creates a significant amount of administrative, legal, and accounting work for our staff. The fiscal sponsorship fee covers our administrative and associated overhead costs.
Your budget should be as detailed as possible and demonstrate you’ve taken into account all categories of project expenses given in our budget template example. Do your best to get well-researched estimates for all project-related costs that you anticipate. We understand that these are liable to change as the project moves forward. We also expect and encourage you to include a fair and industry-standard salary for yourself in your project budget. Your budget should also contain a revenue section which will share your fundraising revenue success to date, as well as a list of prospects and targets.
We advise everyone to consult a tax professional about the tax implications of receiving funds through fiscal sponsorship. Generally, you should only owe taxes personally on the salary paid to you. Funds received for the project’s other direct expenses are written off as expenses, if you have kept track of all receipts, and thus not liable for taxes.
Yes, but each project must apply for sponsorship separately. If you are applying for sponsorship of more than one project, we will need to see that you have sufficient resources and staff to manage multiple projects.
Yes, you do not need to be a U.S. citizen to apply, but if you are filming or producing any part of your film in the U.S. at least one of your directors will need to have a Social Security Number or an LLC with an Employer Identification Number for IRS tax reporting requirements. If you are filming and producing your film entirely outside of the U.S. then you are not required to have a Social Security Number or an LLC, and we can fund international projects directly.
We charge an administrative fee for grants and donations received on behalf of sponsored projects. This fee can range from 5 to 8 percent depending on the amount of funds raised and the source of funds. Our fees are competitive with other fiscal sponsorship programs that offer similar services and resources. We also charge a $25 application fee to help cover the cost of screening administration. As you raise funds over the lifetime of your project, the fee is reduced as follows:
- <$100K: 8% Admin Fee
- $100K–$200K: 7% Admin Fee
- $200K–$500K: 6% Admin Fee
- $500K+: 5% Admin Fee
Crowdfunding Online–Raised Funds: 8% Admin Fee regardless of amount
We can work with projects in any phase of production or post-production and outreach but we do expect to see a clear fundraising plan if you haven’t started filming yet.
We are unable to process donations for sponsored projects until our board has approved the project and we have a signed contract.
Terms of the Program
Yes. You are allowed to directly receive funds that do not require fiscal sponsorship, but be aware that you will need to consult with your tax advisor to ensure you are accounting for those funds and their tax liability correctly.
Yes, we accept credit cards, checks, wire transfers, stock transfers, and PayPal donations. Please note that credit cards and PayPal donations are charged a processing fee from those service providers that is in addition to our admin fee. If possible, checks are still the best way to receive donations.
You can receive foreign funding, but your donors will most likely not be able to use the donation as a tax write-off in their home country. Tax deductions for 501(c)(3) donors are only valid in the United States. Potential donors in other countries will need to consult with their own government and/or tax professionals about any potential benefit associated with donating to a U.S. charity or nonprofit organization.
We generally write checks quarterly, but you can request funds by filling out the paperwork and properly documenting your prior expenses.
Funds from your fiscal sponsor account should only be spent on film project–related expenses. Any misuse of funds is a serious issue and could have legal consequences for you, The Redford Center, and any of your donors. If you have any questions or concerns about whether or not something qualifies as a legitimate expense, please contact us at email@example.com.
The Redford Center is legally responsible for all funds that come through the fiscal sponsorship program. As a project director, you are legally responsible for the accounting and reporting of exactly how any funds you receive are spent on your film project. We recommend you receive the funds from us through an LLC with its own independent bank account. You will need to work with an accountant/tax professional to set up your LLC bank account and ensure tax reporting is up to code. You can also receive funds into an individual bank account, but we still recommend you open an individual account separate from the film project’s funding. We shall review your budgets and spending periodically to ensure funds are being spent correctly, but the tax reporting of your LLC or your own individual account is in your hands.