Fiscal Sponsorship Agreement Template and Key Clauses (2026)

What is a fiscal sponsorship agreement, and when do you need one? A fiscal sponsorship agreement is a contract in which an established tax-exempt organisation, the fiscal sponsor, lets a project or group raise and receive charitable funds under the sponsor's tax-exempt status, in return for oversight and usually a fee. It is a common arrangement in the United States, where a new project that does not yet have its own 501(c)(3) status can still attract tax-deductible donations and grants through a sponsor. The sponsor keeps legal control of the funds and makes sure they are used for charitable purposes. You need a fiscal sponsorship agreement when a project wants to start raising charitable money before, or instead of, forming its own tax-exempt organisation. It saves the time and cost of setting up a separate entity and getting exemption, and it gives funders the comfort of giving to an established sponsor. The agreement matters because it sets who controls the money, who carries the legal and tax responsibility, how much the sponsor charges, and what happens to the project and its funds if the relationship ends. This article is general guidance, not legal advice. Fiscal sponsorship engages tax-exemption and charity-governance rules that are specific to each country, so have a qualified professional review any agreement before you rely on it. ## The two main models Most fiscal sponsorship follows one of two models, often called Model A and Model C after the widely used framework by attorney Gregory Colvin: - Comprehensive (Model A). The project becomes an internal programme of the sponsor and is not a separate legal entity. The sponsor holds all legal and fiduciary responsibility, including for any employees, and takes on the project's activities. This model suits projects with staff or significant liability, because the sponsor carries it.

• Pre-approved grant relationship (Model C). The project stays a separate entity and runs itself. The sponsor receives charitable donations into a restricted fund and then makes grants to the project, checking that the money is spent on the charitable ends described. This model is common in the arts and suits projects that want to keep their own identity and control. In both models the sponsor must keep ultimate control over the funds and ensure they are used for charitable purposes. The template below fits either model with the bracketed choices. ## Fiscal sponsorship agreement template Copy the block below and fill the bracketed fields. ``` FISCAL SPONSORSHIP AGREEMENT This Fiscal Sponsorship Agreement ("Agreement") is made on [DATE] BETWEEN: [SPONSOR NAME], [address], a tax-exempt organisation ("Sponsor") AND [PROJECT NAME / LEADER], [address] ("Project") 1. MODEL AND RELATIONSHIP This is a [comprehensive (Model A): the Project is a program of the Sponsor] / [pre-approved grant relationship (Model C): the Project is a separate entity receiving grants from the Sponsor]. 2. CHARITABLE PURPOSE The Project will operate only for charitable purposes consistent with the Sponsor's tax-exempt status, as described in Schedule 1. 3. FUNDS AND CONTROL The Sponsor will receive and hold all charitable funds raised for the Project in a [restricted fund / program account]. The Sponsor retains final control and discretion over those funds and will [disburse them for Project activities / grant them to the Project] only for the charitable purpose, consistent with law. 4. FEE The Sponsor will charge an administrative fee of [X]% of funds received / [AMOUNT], to cover its oversight and services. 5. SPONSOR RESPONSIBILITIES The Sponsor will provide [fiscal oversight, receipting, reporting, and under Model A, employment, accounting and insurance as applicable], and ensure funds are used for exempt purposes. 6. PROJECT RESPONSIBILITIES The Project will carry out its activities lawfully, use funds only for the charitable purpose, keep records, report to the Sponsor [monthly / quarterly], and not make commitments binding the Sponsor without consent. 7. EMPLOYEES AND VOLUNTEERS [Model A: Project staff are employees of the Sponsor, managed per Schedule 2.] [Model C: the Project is responsible for its own personnel and liabilities.] 8. INTELLECTUAL PROPERTY Ownership of work created for the Project is [Sponsor-owned / Project- owned / shared] per Schedule 3, subject to the charitable-use rules. 9. LIABILITY AND INSURANCE [Model A: the Sponsor carries legal responsibility for Project activities and maintains insurance.] [Model C: the Project carries its own liability and the Sponsor's role is limited to funding oversight.] Each party indemnifies the other for loss caused by its own breach. 10. TERM AND EXIT Either party may end this Agreement on [N] days notice or for breach. On exit, remaining funds are transferred to [another qualified tax- exempt sponsor or organisation chosen for the same charitable purpose], never to a private individual, consistent with law. 11. GOVERNING LAW AND DISPUTES This Agreement is governed by the laws of [jurisdiction], with disputes subject to [courts / arbitration]. Signed for the Sponsor: __________ Signed for the Project: __________ Name / title / date Name / title / date

- **Funds and control (clause 3).** State that the sponsor receives and holds the funds and keeps final discretion over them. This is not optional: to protect the sponsor's tax-exempt status, the sponsor cannot simply pass money through at the project's direction.
- **Fee (clause 4).** Set the administrative fee, usually a percentage of funds received. Be clear whether it applies to all income or only certain income.
- **Exit (clause 10).** Decide in advance where the funds go if the relationship ends. Charitable funds must move to another qualified charitable purpose or sponsor, never to a private person, so the exit clause protects both the project and the sponsor's status. ## Key clauses explained, and how each side negotiates them - **Control over funds.** The project wants to direct spending; the sponsor must keep ultimate control and discretion to protect its tax status. The practical answer is that the sponsor approves disbursements within the agreed charitable purpose and budget.
- **Fee level.** Projects want the lowest fee; sponsors need enough to cover real oversight costs. The fee should reflect the model, because comprehensive sponsorship involves far more administration than a grant relationship.
- **Liability and employment.** Under the comprehensive model the sponsor carries employment and liability, which is why its fee is higher and its approval rights broader. Under the grant model the project carries its own liability. Match the clauses to the model.
- **Exit and portability.** Projects want the right to leave and take their funds to another sponsor for the same purpose. Sponsors agree, as long as the funds stay within charitable purposes. Write the portability right in clearly. ## Common mistakes to avoid - Writing an agreement that lets the project control the money, which can jeopardise the sponsor's tax-exempt status.
- Mixing up the two models, so the liability and employment clauses do not match how the project actually runs.
- No clear exit clause, leaving funds stranded or wrongly directed if the relationship ends.
- Treating the fee as a formality rather than matching it to the real oversight burden.
- Assuming fiscal sponsorship works the same way in every country; the concept is rooted in US tax-exemption law. ## A note on jurisdiction Fiscal sponsorship is primarily a United States arrangement, built on the rules governing organisations exempt under section 501(c)(3) of the Internal Revenue Code. The sponsor must ensure that funds it receives are used to further its own exempt purposes and consistent with those rules, which is why control of the funds cannot pass to the project. Other countries achieve similar ends through different mechanisms. In India, for example, there is no direct equivalent called fiscal sponsorship; a new initiative typically works under a registered trust, society or section 8 company, and foreign funds engage the Foreign Contribution (Regulation) Act, 2010. In the UK and elsewhere, umbrella bodies and charitable trusts play a comparable role under local charity law. Because the structure is tightly tied to national tax and charity law, treat this as jurisdiction-specific and take local advice; say "varies by jurisdiction" where you are unsure. Last verified October 2026. ## Where a contract workspace helps A template gets you a solid fiscal sponsorship agreement. The ongoing work is everything after signing: tracking which funds are restricted to which project, honouring reporting schedules and fee calculations, checking each agreement for a clean control-of-funds clause and a workable exit before you sign, and keeping versions straight as a sponsor takes on many projects. One AI workspace tuned to the sponsorship model you use can hold it together: drafting a fiscal sponsorship agreement from your own terms, reviewing a draft for a control-of-funds or exit clause that needs attention, and tracking which funds are restricted to which project along with each reporting deadline. [Adira](https://adiralaw.com) is one tool built around that way of working for sponsors and their projects. This template is enough to frame a fair fiscal sponsorship; a workspace just makes drafting, review and tracking one connected job.