[OMS_MANAGERS] Fiscal Agent Agreement

[W Darin Rutledge, Executive Director]

I am involved with one organization where the entity (in this case, your Main Street organization) is a DBA (doing business as) of an existing nonprofit (in this case, the Community Foundation). The DBA has its own EIN and functions with an adequate level of autonomy. It’s a very efficient way to operate, but requires a good working relationship between the parent and the DBA. It’s well-suited when the DBA has a mission that is aligned with the host’s mission. The benefit for the Main Street (at least the “nonprofit arm”) is that you don’t necessarily need to build out all the governing documents, procedures, policies, etc. as you would by setting up a standalone nonprofit. Depending on how the arrangement is structured, you may also be able to take advantage of existing accounting, HR, IT support. Even if you have to pay a fee to access those existing services, its better than sourcing them on your own if the host is willing to extend them. 

 

The disadvantages are that, even though the DBA is a legal entity, it is still governed by the host’s bylaws, policies, procedures, board of directors, etc., unless all of those are updated to formally give autonomy to the DBA. If you evaluate that and it’s going to take too much work to do that and make everyone comfortable with the relationship, you’re essentially setting up a standalone nonprofit anyway. 

 

That’s one option, but it doesn’t sound like it may be the best option given the organizations involved. I’ll look back through my old files – when I was Chamber president we had a fiscal agreement with another entity we set up as our nonprofit arm – I’ll see if I can dig it up. In the meantime, I bet you’ll get replies from several others with experience in that scenario. 

 

D

 

From: OMS_MANAGERS <oms_managers-bounces at omls.oregon.gov> on behalf of WINNER Megan <Megan.Winner at ci.coburg.or.us>
Reply-To: Oregon Main Street program managers <oms_managers at omls.oregon.gov>
Date: Tuesday, March 2, 2021 at 3:54 PM
To: Oregon Main Street program managers <oms_managers at omls.oregon.gov>
Subject: [OMS_MANAGERS] Fiscal Agent Agreement

 

Hi All,

 

Sure hope this message finds you in good spirits! As a tier 2 member, we are working on developing our Main Street program in Coburg and I'm reaching out today because the topic of accepting donations/applying for grants for projects has arisen. Our Chamber of Commerce (501c6) hosts Main Street, but we would like donations to go through the Coburg Community Foundation (501c3). Does anyone have any experience or examples of agreements for this type of partnership? I've heard some of your main street organizations have been fiscal agents for other entities. Our challenge is ensuring the funds held by a 501c3 go for an allowable nonprofit purpose and meets the purpose of the fiscal agent’s organizational purpose as well. Your thoughts are greatly appreciated!

 

Thank you, hope you enjoy the evening!

 

Best,

 

Megan Winner

Planning & Economic Development Assistant

City of Coburg

541.682.7862

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