In 2016, I wrote a post telling y’all how Burning Man had this great fiscal sponsorship program, and we had been working hard to expand it from Honoraria recipients to all Burning Man grant recipients, self-funded art heading to playa, civic projects, off-playa art projects, BWB projects, and fledgling nonprofit organizations. Now I am back with even more exciting news for anyone leading a project and looking for a fiscal sponsor.
First a quick recap; what the heck is fiscal sponsorship? Fiscal sponsorship is a technical tool for a 501(c)3 organization to extend its tax-exemption to outside projects or groups that further its mission. Burning Man offers a Model C: Pre-approved grant program. With this model, Burning Man is able to recognize a project or group as furthering the Burning Man mission and offer them a grant. The caveat is, this is a grant that they seek the funding for themselves. These donations that fund the pre-approved grant are tax-deductible.
So what’s the big change? Over the past couple years, we have seen a lot of growth in the diversity of projects taking advantage of the program, and we have been listening to them and taking notes. For 2018, we decided to revisit how the fiscal sponsorship program fits into our mission and do a deep dive into something that is very important: the fee structure.
The administration fee is something every project must take into account when engaging with a fiscal sponsor. This fee can vary widely from organization to organization, and it can change based on variables such as the model of fiscal sponsorship, the amount raised, the source of funding, services offered to the project by the nonprofit, etc. At Burning Man we started with a flat 10% fee, then we changed our model to a sliding scale from 6% – 10% based on amount raised. For some organizations this fee is an important part of their overall revenue stream, and they would not be able to offer the program at all without it. Here at Burning Man, we have seen the work of these projects benefit our mission to such a great extent that we did some cost/benefit analysis and realized that if we could facilitate just a little more money go directly to these projects, there is no telling how much more they could do, and this was worth an investment on our end.
So I am very pleased to announce that our Fiscal Sponsorship fee is now a flat 3%.
This 3% only covers the cost of transaction fees that we pay to outside service providers. Burning Man no longer will collect a fee for our administrative services. This is our gift back to these projects. This also makes Burning Man one of the most cost-effective fiscal sponsors in the nation. So if you are starting a project, we want to help and we have this powerful tool at our disposal to help you achieve success in your mission aligned projects.
We have also put together a new web page about the program.
Should you have any questions about our fiscal sponsorship program that are not answered on our page you can reach out to us at firstname.lastname@example.org.
Top image: Galaxia by Arthur Mamou-Mani, the 2018 BRC Temple, is a current sponsored project.