These are some of the common questions about fiscal sponsorship that have come up over the years. Remember, these are generalized answers. Your project's fiscal sponsorship grant agreement may contain specific provisions that are a little different. In all cases, the Agreement is the binding document. Please do not hesitate to call the Rose Foundation if you have any questions about how the fiscal sponsorship arrangement works.

1) How does the fiscal sponsorship relationship work? The project solicits grants, gifts, or contributions to the Rose Foundation, earmarked for the Foundation's restricted fund for this project. Checks should be made payable to Rose Foundation - Your Project so that it is clear that they are specifically earmarked for your project's restricted fund. You can either have people send the checks to you, and then forward them to the Foundation, or have checks sent directly to Rose. An administrative charge of 6% of donations shall be deducted by the Rose Foundation to defray the Foundation's costs of administering the restricted fund. The project shall keep the Rose Foundation appraised of its fundraising activities and provide copies of fundraising solicitations. Generally, the Rose Foundation must pre-approve all fundraising solicitations. The cost of any reports or other compliance measures required by funding sources are borne by the project.

2) How often does the Rose Foundation disburse fiscal sponsorship grants?
As funders make donations earmarked for the project to the Rose Foundation, the contributions are placed in the Foundation¹s restricted fund for the project. In cases where the Foundation is receiving numerous small donations on behalf of a project, Rose will generally consolidate the contributions in its project-specific restricted fund and award lump-sum grants once or twice per month. These grants to sponsored projects are generally disbursed on or about the 1st and/or 15th of each month. In instances where a large contribution is received for the support of the project, the Foundation will typically award sufficient funding to cover 3 to 6 months operations. Upon receipt of the project¹s quarterly report, some or all of the balance of funds remaining will be released to the project. At its discretion, the Rose Foundation may elect to maintain a positive balance in its restricted fund for the project.

3) Why do I have to send information to the Rose Foundation? Your project needs to send information to the Rose Foundation about its activities because the Rose Foundation has assumed liabilities to the IRS about the charitable nature of your activities. The Rose Foundation has to maintain records that document its oversight ensuring that your project is furthering the Foundation's own charitable mission and purpose. The only way that the Rose Foundation can maintain those records is if you keep us appraised of your activities. Typically, the Rose Foundation may retain a positive balance in its restricted project fund pending receipt and acceptance of appropriate reports.

4) What reports or materials do I have to send to the Rose Foundation? And how often? The project must submit a quarterly narrative and financial report that summarizes program activities and describes income and expenditures. The project should also submit an annual report that encapsulates activities for the entire year. In addition, the project should always send copies of fundraising solicitations, and any major work products or widely disseminated materials. Remember, in many instances, you may be required to receive the Rose Foundation¹s pre-approval before distributing these materials. As a guideline, here is a typical list of materials that should be sent to the Rose Foundation:

€ Quarterly reports that detail activities and expenses for the quarter.
€ Organized Annual Reports which summarize activities and expenses for the year.
€ Copies of any fundraising solicitations, especially all grant requests and reports to funders.
€ Brochures, Action Alerts and other flyers.
€ Copies of major policy memos, comments to administrative bodies, etc....
€ Internal governing documents, including but not limited to roster of officers, roster of Steering or Advisory Committees, operating bylaws or charter, and a complete and filed IRS Form SS-4. If you change your governance process or anything else, (for example, any change in your project's tax or legal status, or executive staff) send us the amended version.

5) Is fiscal sponsorship forever? No. We will typically renew the terms of the grant agreement as needed. This provides an opportunity to modify the agreement if necessary to accommodate your project's growth.

6) What happens if major changes occur with my project during the year? If the project wants to initiate any significant activities that are not described in your original sponsorship application, we need to amend the sponsorship agreement to include these activities. As long as the new activities are still within the Rose Foundation's charitable scope, this will not be a problem. However, please remember that under the agreement, the Rose Foundation reserves the right, if the project's conduct jeopardizes the Rose Foundation's legal or tax status, to withhold, withdraw, or demand immediate return of grant funds, and to expend such funds as to accomplish the purposes of the project as nearly as possible within the Rose Foundation's sole judgment. This is a legal requirement required for the Foundation to maintain its own charitable standing.

7) Can my project lobby? (and, What is lobbying??) Various kinds of activities can fall under the catchall term "lobbying". Lots of these activities are actually OK for a charity and are not "lobbying" in the legal sense -- you can avoid confusion by properly calling these activities education and advocacy. Generally, it depends on to whom you are talking and what you are asking them to do. 501(c)(3) organizations can legally engage in limited amounts of certain types of lobbying. However, the Rose Foundation's policy is that fiscal sponsorship projects may not lobby at all without the Foundation¹s expressed advance permission. This is reflected in your Fiscal Sponsorship Grant Agreement, which states ³fiscal sponsorship grants from the Rose Foundation may not be used in any attempt to influence legislation within the meaning of IRS Code 501(c)(3).² Any violation shall result in immediate termination of the sponsorship relationship, and may require return of past funds granted to the project. Generally, you are on safe ground contacting appointed officials, because these officials are not elected and are not legislators. Contact of this type is not lobbying as defined by the IRS, and you do not need to seek the Rose Foundation¹s pre-approval before initiating such contact. Contacting elected officials is permissible, within limits specified by the IRS. Any involvement in campaigns for public office is strictly forbidden.

Here are some general guidelines and examples:

a) Contact with appointed officials: Most contact with an administrative agency, such as the Board of Forestry, Air District or Water Board is fully permitted and is not "lobbying", although people commonly (and mistakenly) use that term to describe that kind of activity. However, if you ask these appointed officials to take a position or action about pending legislation you would cross the line into ³real² lobbying and the Rose Foundation¹s advance permission would be required. A common area of confusion is when an elected body, such as a city council, also serves as an administrative agency, such as a redevelopment agency. In these circumstances, care must be taken to ensure that your communications all relate to the administrative function, not the legislative. Practically speaking, however, this may be hard to do. In these instances, communicate with the Rose Foundation before initiating contact with the officials or agencies involved for guidance.

b) Contact with elected officials: Ask the Rose Foundation before you initiate contact with elected officials: Talking with elected officials is not necessarily lobbying. For example, you can meet with a legislator to provide background context or current information about your issue. You may ask the legislator to contact an administrative agency to express an opinion. You can even work with a legislator on model legislation, respond to questions about the potential effects a particular bill may have on your issue, or provide various kinds of technical assistance upon written request from a legislative committee chair -- although this type of contact should be screened with Rose first.

Taking or advocating a position on specific legislation is lobbying. Your project may not advocate positions on actual legislation without the express advance consent of the Rose Foundation.

c) Involvement in political campaigns for public office: Any project sponsored by the Rose Foundation shall not participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office. Even simple endorsements of candidates is prohibited. No exceptions are possible. Involvement in electoral campaigns is completely illegal for charitable organizations. Don't even think about it.

8) Who owns the project's work products? The project owns all of its work products. Any tangible or intangible property, including copyrights, obtained or created by the project are the sole property of the project.

9) In addition to soliciting funds from outside sources, may the project apply to the Rose Foundation for grants? Yes. Fiscal sponsorship projects may compete for grants on an equal footing with any other entity. However, one of the primary purposes of the fiscal sponsorship relationship is to facilitate the project's ability to attract funds from other sources besides Rose.

10) Does fiscal sponsorship make my project a 501(c)(3) charity? 501(c)(3) is a specific section of federal code which describes the type of activities (ie -- educational, research, etc...) which are defined as charitable under federal law. The IRS then interprets the law and, practically speaking, either recognizes or denies recognition of charitable status. Since your project has not yet applied to the IRS for recognition, it is acting under the "charitable umbrella" of the Rose Foundation. Essentially, we have formed and documented the basis for an opinion that your project's activities are charitable in nature and will further our charitable purposes. That's why we need to be sticklers about record keeping. The Rose Foundation needs to be able to justify your project's actions as furthering the Foundation's own charitable purposes.

11) What tax forms do I need to file? Depending on your project's legal status, you report the fiscal sponsorship grant income on the appropriate IRS and state tax forms (990, 1040, etc.). If your project grosses below $25,000/year, the IRS does not require filing a 990. You must also file the appropriate employer taxes, W-9's etc. As always, send Rose a copy of any IRS or Franchise Tax Board filings.

12) Is my project a part of the Rose Foundation? Mostly no. The project is a separate legal entity and is not an agent or legal representative of the Rose Foundation. The project owns its own work products and equipment. Project staff do not work for Rose. Project correspondence should not be on Rose letterhead. The project is a part of the Rose Foundation only in the sense that any grantee is part of the foundation which provides enabling support. Collectively, all the projects to which the Rose Foundation makes grants comprise a significant part of the Foundation's overall program. In that sense, your project is part of the overall mosaic which is Rose.

13) How do I express the relationship to funders and others? Your project is an independent entity, acting under the fiscal sponsorship of the Rose Foundation. After you notify Rose of the funding source(s) you intend to approach, and at the appropriate time in the application process, Rose will prepare a letter to the funder confirming the sponsorship and providing any other information they require. Generally, this type of information is sent along with a full proposal, and not with initial inquiries. Don¹t wait until the last minute to tell us you need the letter et al for the funder you are approaching with a full proposal. Give Rose at least one week advance notice before your submittal deadline, and send us a copy of the funder¹s specific instructions so we can prepare exactly what they need. But remember, when a funder asks for your organization's budget, financial statement, Board of Directors, or other materials -- what they really want is your information, not Rose's. Create some project letterhead, sign up a prestigious list of individuals to serve as a Board of Advisors, think through your own budget, write a brochure or flyer that describes your project and how people can get involved... These are the steps that help reflect your project vision as a living reality.

14) How does my project apply for fiscal sponsorship? First, review Rose Foundation¹s mission and goals to see if they are compatable with the mission of the organization that is seeking fiscal sponsorship. The mission and goals can be found on the funding guidelines web page. If your organization is not based in California, then please call us before applying. Then download the fiscal sponsorship application. The application may be submitted by mail or e-mail. We receive applications from all types of groups: large and small, established groups and start-up organizations. Therefore some of the questions may not apply to your group. We will contact groups within a couple of weeks of receiving the application. If you don't hear from us after two weeks, please give us a call. The Board makes fiscal sponsorship decisions on a quarterly basis, so the process of final approval may take 3 month.

To Download a
Fiscal Sponsorship Application
Click on the format you desire
Word or PDF
or send us an e-mail and we will send you the application

15) Are there any geograhic limits on the projects that the Rose Foundation sponsors?
For the most part, Rose only sponsors projects that are located or doing work in California.

Back to Fiscal Sponsorship Page

List of Fiscal Sponsorship Services