Fiscal Sponsorship FAQ’s:

What should you know before applying…

What is required for fiscal sponsorship?

  1. Review our project policies and grant agreement and range of services
  2. Submit the online application.
  3. Far Away Projects’ Board Member review and approval (general timeframe for review, 1-2 weeks)
  4. The director will contact you with written approval or request more information. 
  5. Sign grant agreement.

 

Step 1: Apply Here

What Is The 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 another 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, such as being able to apply for grants and tax-deductible charitable gifts.

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. 

What Does The Fiscal Sponsorship Agreement Look Like?

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

What Are The Eligibility Requirements?

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 valid mailing address
  • You have a valid email address that you regularly check
  • You have regular access to the internet

What Are The 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. 
  • We accept stock donation and real properties. 
  • Fund releases are issued bi-weekly by ACH (electronic fund transfer).
  • Access to a variety of fundraising templates (Donor acknowledgment 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!

 

Full range of services available here: Range of Services

 

What Are General Procedures Upon Approval?

 

  • Keep your contact information on file up to date if it has changed before your annual review email hello@farawayproject.org  — 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!

What Are 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 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.

 

What Other Legal Or Tax Details Should I Know?

  • 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 any time 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!