[OMS_MANAGERS] Fiscal Agent Agreement

[Elisa Joy Payne]

We are a fiscal sponsor for both our Farmers Markets and the Hillsboro
Tuesday Night Marketplace (party market) since they are both 501(c)4s. With
the Farmers Market, the agreement makes it clear that it is only for the
markets that they hold in our Downtown district, since they host in other
locations around our city, but this ensures it aligns with our mission. We
keep administrative fees for any project that they fundraise for - 15% or
max allowed by funding agent, with a $5,000 maximum per campaign/grant.
This makes it worth our time to work with them on accountability and
reporting.

We consulted with both our CPA and legal counsel before proceeding, and I
would recommend you to do the same. It was important for our CPA to be
confident in the arrangement so that he can help us report it correctly to
the IRS. Our lawyer wrote the contracts and has advised us on other
organizations that have requested us to be their fiscal sponsors that we
ended up turning down.

The benefit of doing this kind of agreement goes far beyond the
administrative fees for us as I'm sure it would for your Community
Foundation. Both agreements have made us stronger partners and have created
new stories for us to share - that we need each other and are equally
essential to our communities. My favorite example of this is that the
Tuesday Market was able to procure a $60,000 CARES Act grant from our
County last year, which kept the ED employed, but also allowed them to do
creative work that was paid to our businesses, non-profits, and local
artists. It takes a village...

*Elisa Joy 'EJ' Payne* *| *Executive Director
*| Hillsboro Downtown Partnership *| *Cultivating a vibrant community.*
*|* *o.* 503-640-6145* | **m.* 503-341-8639
*|* *e. *ej at downtownhillsboro.org *|* *w.* downtownhillsboro.org

Follow what's happening Downtown on INSTAGRAM
<https://www.instagram.com/dwtnhillsboro/>.


On Thu, Mar 4, 2021 at 8:33 AM Lizzy Caston <lizzy at albertamainst.org> wrote:

> 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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