Fiscal Sponsor FAQS

What does it mean that the Colorado Nonprofit Development Center (CNDC) is a "fiscal sponsor" for projects?
• CNDC has legal and financial responsibility for its projects.
• CNDC acts as the 501(c)(3) umbrella for each project.


Why does CNDC charge projects a 9% fee?
• The fee covers the cost of services provided to projects. Services include accounting, inclusion in audit/tax returns, payroll service, benefits administration, coaching, and technical assistance.
• By sharing these costs with other CNDC projects, the fee is generally less expensive than what projects would pay vendors independently for the same service of a similar quality.

Is there a separation fee?

• • No, but projects do cover the costs associated with this process.  Currently, filing fees to the IRS are $750.

How can I apply to be a project of CNDC?
• CNDC receives more proposals for fiscal sponsorship than it can accept. Before submitting an application, make sure your project plan fits CNDC’s eligibility requirements and criteria and you are ready to apply.
• The application review process takes four to six weeks. On occasion, CNDC will expedite a review process for legitimate funding or other time-sensitive reasons. Contact the Director of Programs to discuss your particular situation.

What is the role of CNDC's board of directors versus the role of the project's advisory board?
• CNDC's board of directors is the legal governing body for all CNDC projects. Ultimate financial and legal responsibility for all project operations lies with the CNDC board of directors.
• However, the CNDC board is not involved in the development of each project. CNDC projects are required to maintain an advisory board, which provides governance and oversight for the project and ensures the project has the resources it needs to fulfill its mission.

Does CNDC raise funds for projects?
• Projects are responsible for their own fundraising.
• CNDC provides one-to-one coaching to projects on fundraising and will review project's grant proposals prior to submission.


Does CNDC offer office space to projects?
• CNDC does not provide office space to projects.
• Projects have access to CNDC's meeting space, computers, printer, and Internet free of charge.
• Projects may use CNDC's copiers at a minimal charge.


Is there a minimum or maximum amount of time CNDC requires a project to be under its umbrella?
• CNDC asks projects to be under its umbrella for a minimum of six months prior to starting paperwork to become a 501(c)(3).
• There is no maximum amount of time an active project can remain with CNDC.


What if I already have our 501(c)(3) designation from the IRS and have incorporated with the state?
• Projects cannot exist as separate legal entities from CNDC. In order to apply for fiscal sponsorship, you must be willing to dissolve your nonprofit organization while under CNDC’s umbrella.
• You may want to consider using CNDC’s Nonprofit Support Services, which provides professional accounting services to established 501(c)(3) organizations.

Does CNDC provide insurance for projects?
• General project activities are covered under CNDC’s general liability insurance and property coverage. The additional insurance costs to cover a project's property is passed on to the project. Depending on the nature of a project’s activities, CNDC may require the project to purchase additional insurance with the additional cost being paid for with project funds.

Will foundations fund CNDC projects?
• Most Colorado foundations accept proposals from CNDC-sponsored projects. CNDC has worked closely with the funding community to understand the accounting and oversight benefits of CNDC’s comprehensive fiscal sponsorship program.
• Nationally, comprehensive fiscal sponsorship is becoming more accepted among funders as a beneficial relationship for charitable organizations that do not have 501(c)(3) status.
• However, not all funders will accept more than one proposal from a 501(c)(3) organization or proposals from projects with fiscal sponsors. You may want to check with potential funders to see if they accept CNDC-sponsored projects.