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Advocacy & Fiscal Sponsorship

 

For regular listeners of the pod, you may recall that we’ve discussed fiscal sponsorship in past episodes. Fiscal sponsorship is a great way for a new charitable organization to work with an existing 501(c)(3) to get up and running (including engaging in important advocacy) whether waiting to receive its own IRS tax-exempt status or not. Today, we’re going to look at this topic form a different point of view – that is, from the fiscal sponsor’s perspective. On this episode, we’ll chat about considerations fiscal sponsors should keep in mind when engaging in, and when supporting projects engaging in, advocacy. And we’re very happy to be joined today by Josh Sattely from Social Impact Commons. 

 

Attorneys for this episode 

Sarah Efthymiou 

Melissa Marichal Zayas 

Victor Rivera 

Josh Sattely, Social Impact Commons 

 

Shownotes 

  • Overview of fiscal sponsorship  

  • Our focus today is on 501(c)(3)s, but fiscal sponsors come in different forms, including 501(c)(4)s 

  • There are different types of fiscal sponsorship, but the two most common are: 

  • Model A (Direct/Comprehensive): Project operates within sponsor’s organization.  

  • Model C (Grant Relationship): Sponsor collects donations and grants funds to the project. 

  • Why Advocacy Matters for Fiscal Sponsors  

  • Enhances impact, credibility, and systemic change. 

  • What type of advocacy is allowed under fiscal sponsorship?  

  • Lobbying: Direct vs. grassroots lobbying. 

  • Non-Lobbying Advocacy: Educational activities, voter engagement, rulemaking, corporate influence, litigation. 

 

  • What are some of the Key Concerns for Fiscal Sponsors Engaging in Advocacy?  

  • Differentiating advocacy, lobbying, and political activity. 

  • Compliance and reporting at state/federal levels. 

Best practices for educating projects on compliance: 

  • Use existing resources like AFJ.  

  • Discuss advocacy/lobbying expectations early. 

 

  • Case studies of advocacy in action:  

  • Network to Abolish the Death Penalty 

  • Lift Louisiana, a fiscally sponsored project of Tides Center 

 

  • Common Misconceptions About Advocacy & Fiscal Sponsorship  

  • Overly conservative approaches due to funder restrictions. 

  • Misunderstanding grant/lobbying reporting obligations. 

 

  • Options for Projects Wanting to Go Beyond 501(c)(3) Limits  

  • Form a 501(c)(4) or partner with an existing one. 

  • Consider PACs or for-profit structures. 

 

  • Key Takeaways 

  • Stay engaged in advocacy but ensure compliance.  

  • Push back on unnecessary funder lobbying restrictions.  

  • Don’t overlook state/local advocacy.  

  • Consider existing (c)(4) partnerships before starting a new one. 

 

Resources