What is incubation?
When a project begins to move toward a successful launch of independent operations, you can feel it. There is nothing more exciting than seeing an “idea” become a viable and sustainable effort on behalf of the community. More than just sponsorship, projects need coaching and technical assistance to build the infrastructure that will ensure their business success. Incubation
is about systems development, financial planning, organizational design, and long-term sustainability. The Charitable Ventures team works side-by-side with our project leaders to make sure they have the resources and education to succeed once they leave our platform.
What is fiscal sponsorship?
Some organizations use incubation and fiscal sponsorship interchangeably, but there is a difference. Fiscal sponsorship
is a technical term that refers to when one nonprofit sponsors another, allowing the sponsored project to operate under the nonprofit’s tax-exempt 501(c)(3) status. This allows an emerging, non-incorporated nonprofit to fundraise and operate in compliance with IRS regulations. While there are many different models of sponsorship, at Charitable Ventures, we offer two types – Model A
and Model C.
Model A: Direct Project
In a direct project relationship, the fiscally sponsored project and CV are legally considered one and the same. The project is implemented by the Sponsored Project staff and CV. Charitable donations are made to CV for the benefit of the project. CV is responsible for all government filings (e.g. 1040, 990). A fiscally sponsored project that has, or intends to have paid employees (as separate from independent contractors) must be a Model A project.
Model C: Preapproved Grant or Re-Grant
CV re-grants funds received from a donor to specified project that is charitable and carries out the sponsor’s tax-exempt purposes. The project does not become a program belonging to CV. Under a Model C agreement, CV has authority over the financial administration of an established restricted fund, and makes grants from the fund to support the project at its discretion. A Model C project has its own legal, tax and accounting identify. It could belong to an individual, nonprofit organization other than a 501(c)(3), a partnership or business corporation.
What services do you offer to incubated projects?
Once a project is accepted into the incubator, it has access to a full array of back office services on day one, including: HR services, including payroll support and benefits, finance services, legal support, insurance, and a fundraising platform. Charitable Ventures also offers sponsored projects one-on-one technical assistance with business planning, development strategy and fundraising, contract management, and personnel needs, including professional leadership coaching. Projects also have access to monthly workshops on critical topics such as building a board, fundraising, evaluation, managing volunteers, cash flow management, and many others.
Does CV sponsor projects outside of Southern California?
Many of our projects are based in Southern California, but provide services elsewhere. We can sponsor projects with national reach. We do not sponsor international projects.
Is there a minimum deposit required to open my project account?
New projects are expected to contribute a minimum of $25,000 to open an account, either in hand or committed. This level of minimal funding ensures that operations can begin immediately, and that the project is already engaged in resource development, which is critical to success.
What are the fiscal sponsorship fees?
Charitable Ventures charges a percentage fee on revenue deposited into your account. Average fees range from 9% to 12% depending on source and amount of funding. Projects raising more than $1M annually can negotiate discounted fees. Please inquire about our fee schedule.
How does Charitable Ventures handle our funds?
Charitable Ventures establishes a DBA (i.e., doing business as; aka a fictitious business name or a FBN) and a separate bank account for each project selected for sponsorship to both support project brand awareness and to protect and segregate project assets.
Can I apply for sponsorship if I already have my own 501(c)(3)?
In some rare instances, we may be able to sponsor a project that has previously operated under its own 501(c)(3), but now needs additional support, or has a unique reason to set up a fund. It is important to note that a nonprofit cannot operate simultaneously under two separate tax IDs, as there are legal complexities to manage. Please inquire further about this process.
How do I apply for sponsorship?
We ask interested projects to fill out a simple application that helps us (and you) better understand your vision, your business plan, and the supports you may need. We also request some attachments that can be uploaded into our system, including budgets, letters of reference, fundraising plan, and name of committee members, if present. For projects who have incorporated in the State of California, but not yet received their federal tax status, we ask for a copy of that paperwork.
If you have a hard time filling out this application, you may not be ready for sponsorship.