Find Seed Money
Where do you find initial funding?
Most of your agency's initial funding will come from:
- your stakeholders (you should ask each member of the Steering Committee/Board of Directors to give generously of both their time and MONEY)
- community support, such as churches (church and school drives may not ask for a receipt)
Before your organization has become an incorporated, tax-exempt nonprofit, you will need a fiscal sponsor (often called a fiscal agent).
What is a fiscal sponsor/agent?
Jeanne Vogel and Fundraising Innovations defines a fiscal agent as “an organization that manages the finances for another organization, generally until the second organization gets on its feet.”
Here is how it works:
The fiscal sponsor applies for funding under the auspices of its nonprofit status and passes the funding through to the second organization. The new nonprofit does the grant writing and other fundraising work.
Choose your fiscal agent carefully. Choose an agency that:
- has a mission/vision that compliments yours
- is willing to mentor you in other areas, such as fundraising, marketing, grant writing, etc.
- is not in direct competition with you for fundraising and grants
You must also:
□ get board approval from both boards
□ make sure the terms of the relationship are in writing
□ have a plan for becoming independent from the fiscal sponsor as quickly as possible