A Fiscal Sponsorship Agreement is a legal document that outlines the relationship between a fiscal sponsor (a 501(c)(3) nonprofit organization) and a project or individual (the sponsored project) who seeks to raise funds for a specific project or cause. This agreement establishes the terms and conditions under which the fiscal sponsor will accept and disburse funds on behalf of the sponsored project.
Key Elements of a Fiscal Sponsorship Agreement
A well-crafted fiscal sponsorship agreement should include the following essential elements:
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1. Parties to the Agreement
Fiscal Sponsor: Clearly identify the 501(c)(3) nonprofit organization that will act as the fiscal sponsor.
Sponsored Project: Specify the name of the project or individual who will be receiving the funds and carrying out the project.
2. Purpose of the Project
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Project Goals: Provide a detailed description of the project’s objectives and how the funds will be used to achieve these goals.
Alignment with Mission: Explain how the project aligns with the fiscal sponsor’s overall mission and values.
3. Financial Responsibilities
Fund Acceptance and Disbursement: Outline the procedures for accepting and disbursing funds, including any restrictions or limitations.
Financial reporting: Specify the frequency and format of financial reports that the sponsored project must provide to the fiscal sponsor.
Recordkeeping: Detail the recordkeeping requirements for both parties, including the retention period for financial records.
4. Intellectual Property Rights
Ownership: Clearly delineate the ownership of any intellectual property created as a result of the project, such as copyrights, trademarks, or patents.
Licensing: If applicable, specify any licensing agreements or permissions required for the use of intellectual property.
5. Indemnification
Liability Protection: Outline the indemnification provisions, which typically require the sponsored project to indemnify and hold harmless the fiscal sponsor from any claims or liabilities arising from the project.
6. Term and Termination
Duration: Specify the duration of the agreement, whether it’s a fixed term or a term that can be terminated by either party under certain conditions.
Termination Procedures: Detail the procedures for terminating the agreement, including any notice requirements and potential consequences.
7. Governing Law and Dispute Resolution
Governing Law: Specify the jurisdiction whose laws will govern the agreement.
Dispute Resolution: Outline the dispute resolution process, such as mediation or arbitration, to resolve any disagreements between the parties.
8. Insurance
Insurance Requirements: Specify any insurance requirements, such as general liability insurance, that the sponsored project must maintain.
9. Miscellaneous Provisions
Notices: Detail the procedures for providing notices or communications between the parties.
Assignment: Specify any restrictions on assigning the agreement to a third party.
Severability: Indicate that if any provision of the agreement is deemed invalid or unenforceable, the remaining provisions will remain in effect.
Entire Agreement: State that the agreement constitutes the entire understanding between the parties and supersedes any prior agreements or representations.
Design Elements for a Professional Agreement
To create a professional and trustworthy fiscal sponsorship agreement template, consider the following design elements:
Clear and Concise Language: Use clear and concise language, avoiding legal jargon whenever possible.
Consistent Formatting: Employ consistent formatting throughout the document, including font, font size, and line spacing.
Professional Layout: Use a clean and professional layout, with headings and subheadings to organize the content.
White Space: Incorporate ample white space to improve readability.
Professional Font: Choose a professional font like Times New Roman, Arial, or Calibri.
Page Numbering: Include page numbers for easy reference.
Signatures: Provide clear spaces for both parties to sign the agreement.
By carefully considering these elements, you can create a professional and effective fiscal sponsorship agreement template that protects the interests of both the fiscal sponsor and the sponsored project.
