Fiscal Sponsorship FAQ’s:

What should you know before applying...

1. Submit the online application.

2. Far Away Projects’ Board Member review and approval

3. Written approval or request for more information.

Step 1: Apply Here

Application Timeline

Applications are considered on an ongoing basis. There is no submission deadline. The review of your application will take place within one to two weeks of submission. You will receive notice of the decision within one to two weeks of submitting your application.

For example: When I apply for sponsorship on Feb. 1st; the review takes place within two weeks; I am accepted into the program on or before February 14th.

What Do We Sponsor?

Far Away Projects supports fiscally projects that are consistent with our IRS-approved charitable mission. Projects must be for public benefit in nature and may not be produced solely for commercial gain. The term “project” is used very broadly, and may refer to a one-time project, disaster relief projects, research, an ongoing group or company, or even the work and career of an individual maker/environmentalist/inventor/researcher/conservationist or other similar social contributor.

Examples of the types of projects we sponsor include:

  • Individuals’ ongoing work and creative development needing grant funding
  • One-time or finite events for awareness development and/or relief efforts
  • Grassroots or DIY initiatives, collectives or facilities
  • Emerging social impact organizations
  • Small but mature social impact organizations with limited staffs
  • Educators or education programs
  • Charitable organizations that have applied for a 501(c)(3) tax exempt determination and are awaiting IRS approval
  • All of the above that seek fundraising support specifically for sustainability or science-related endeavors

What Can’t We Sponsor?

  • Award programs, grant programs, scholarship programs, or any other scenario in which you’ll be re-granting the money you receive from us.
  • Commercial projects with the primary goal of making money.
  • Projects without a substantial mission-aligned component.

What is the Relationship Between Far Away Projects and its Sponsored Projects?

Fiscal sponsorship has many different models and programs differ. Far Away Projects’ fiscal sponsorship program is structured as a grantor-grantee relationship. In our program, sponsored projects are treated as separate legal entities that are responsible for their own tax returns, employment taxes, insurance, debts, liabilities and other legal obligations. Although fiscal sponsorship does not give projects 501(c)(3) status, it does enable them to access many of the benefits of Far Away Projects’ 501(c)(3) status.

Far Away Projects does not judge your work’s quality or merit.  Far Away Projects’ provides a legal and efficient mechanism for funders and donors to support charitable, education and science-related activities, as well as mentorship.

Fiscal Sponsorship Agreement

By submitting an application you agree to be legally bound by the fiscal sponsorship agreement. Please review it carefully before applying.

Step 2: Program eligibility and benefits

Program Eligibility

In order to be approved, you must demonstrate the following criteria:

  • Project activities are mission aligned with Far Away’s Stated Charitable Purposes
  • Activities must be approved by Intake Form completion
  • You have a legal entity with a US tax identification number (either a Social Security Number or Employee Identification Number) that will be responsible for all money released from the fund (which is taxable income – more on that shortly)
  • You have a United States mailing address
  • You have a valid email address that you regularly check
  • You have regular access to the internet

Program Benefits

The core program benefit is the ability to solicit tax-deductible contributions or grants in support of your activities. However, our program has some aspects that make it special when compared to other fiscal sponsorship programs:

  • We accept funds via cryptocurrencies as well as traditional currencies.
  • Fund releases are issued bi-weekly by ACH (electronic fund transfer).
  • Online tools for managing your sponsored fund (check your cryptofund balance, view donation and fund release history, access to donor contact information)
  • Access to a variety of fundraising templates (Donor acknowledgement forms, fundraising event planning spreadsheets,
  • Profile and website link featured on our website
  • Funds are disbursed only for project-related expenses, which means that any “income” from the fiscal sponsorship should be 100% offset by deductible expenses. (We can’t legally offer tax advice, but the idea here is that we’re trying to prevent you from personally owing any taxes on the money you receive. If you have questions about this, consult an accountant.)
  • Subsidized fundraising assistance is available for research assistance, grant applications, individual campaigns, events etc.
  • Far Away Projects staff is friendly, helpful, and knowledgeable — a great ally as you pursue your work!

 

Step 3: Policies and procedures

General Procedures Upon Approval

  • Keep your contact information on file up to date — if we don’t have a current email address we can’t alert you to donations your project received!
  • Authorize any users on your Far Away Projects membership that you want to act on behalf of your project (including anyone who will be contacting the Far Away Projects staff regarding the fund).
  • File an annual report at the beginning of each year for the previous year — don’t worry, we’ll contact you when this is due!

Fundraising Procedures

  • You may not begin fundraising until our Board of Directors has approved your sponsorship application.
  • As a fiscally sponsored project, you are responsible for your own fundraising. Take some time to think about your development strategy, project identity and whom you’ll contact as potential sources of funding.
  • All written solicitations (i.e. requests for money) must be approved by our staff before you send them out.
  • All grant applications (for which you will be using Far Away Projects as a fiscal sponsor) must be reviewed by  Far Away Projects staff before being submitted to the funding source.

Some Important Notes

  • The legal entity associated with the fund is responsible for reporting all money released from the fund to the IRS as taxable income.  Far Away Projects will issue 1099 forms as required by law.
  • The legal entity associated with the fund may be transferred at anytime by signing a contract amendment agreement.
  • If you are a U.S. project, considering applying to the IRS to become a 501(c)(3) tax exempt organization, we strongly suggest doing your research.

More banking questions answered…

Bank Accounts
It is generally good practice to open up a separate bank account to receive, manage, and hold the funds that your sponsored activities generate. Do not open a nonprofit bank account or use Far Away’s name to open the account. We will not provide you with our IRS Determination letter to open a bank account.

Keep in mind that smaller, independent banks (or better yet, non-profit credit unions) often charge the lowest fees and provide better customer service than the large corporate banks. In our experience, most banks will accept a Certificate of Assumed Name (aka DBA – “Doing Business As”) to open a business account as long as an individual is willing to personally guarantee the account. However, you are not required to have a business account; you can also open a separate personal checking account, so long as your own personal finances are not involved.

Taxes and Reporting

While we cannot offer tax advice, it may be beneficial for you as the recipient of these funds to consult with a tax professional when applying for Fiscal Sponsorship. It is each sponsee’s legal responsibility to properly and accurately complete any necessary tax returns.

Income distributed from your sponsorship must be reported to the IRS on Form 1099. Far Away Projects will file a 1099 reflecting these earnings at the end of the calendar year and send a copy to the project representative. This tax form will list the name and taxpayer ID number for the project representative we have on file as well as the amount of income distributed.

Almost There!

Whew! Now that you’re up to speed on how Far Away Projects fiscal sponsorship program works, it’s time for us to get to know you and your project. Please fill out the online application and let’s connect!