[OMS_MANAGERS] Fiscal Agent Agreement

[Lizzy Caston]

There are nonprofit entities that do this for other nonprofits - acting as
fiscal agents. It’s not uncommon.

We encounter this all the time.

The biggest thing you’ll need to do is have a clear, legal tight contract
to protect both entities and make sure everything is on the up and up. And
also make sure it isn’t breaking both city law & your bylaws. I imagine
your city’s attorney or an attorney for that nonprofit can handle it.

There’s also a third option to hire a third party  fiscal agent to handle
it all for you. This also isn’t uncommon but they usually charge a fee
unless it’s in-kind

On Tue, Mar 2, 2021 at 7:07 PM W Darin Rutledge, Executive Director <
darin at downtownklamathfalls.org> wrote:

> 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
>
-- 
Lizzy Caston
Alberta Main Street
cell 503-803-3326
Albertamainat.org
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