Nonprofit Kit For Dummies. Phillips Frances

responsible.

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Both parties should agree to and sign a contract or memorandum of understanding, detailing the responsibilities of each. See File 2-2 at www.dummies.com/go/nonprofitkitfd5e for a sample fiscal sponsorship agreement.

      ❯❯ The fiscal sponsor customarily charges a fee for sponsoring a project – usually between 5 percent and 15 percent of the project’s annual revenues, depending on the services it provides to the project.

      ❯❯ Some fiscal sponsors provide payroll services, bookkeeping, office space, group insurance coverage, and even management support, if needed. Be sure to ask if these additional services are included in the fiscal sponsor’s fee.

      ❯❯ Contributions to the sponsored project should be written to the sponsor, with a note that instructs that they be used for the project.

      

Some foundations are reluctant to award grants to fiscally sponsored projects, even announcing in their guidelines that they won’t do it. One reason for this reluctance is their concern that the board of the sponsoring organization exercises less oversight toward fiscally sponsored projects than it does toward their agency’s other programs. Those foundations also may be concerned that the sponsoring nonprofit is providing convenient access to 501(c)(3) status to entities engaged in activities that don’t qualify for that tax status from the IRS. Not all foundations share these prohibitions, however. In fact, some are proponents of fiscal sponsorship as a way of supporting new ideas and timely programs. You can read much more about foundations and grant proposals in Chapters 16 and 17.

       Finding a fiscal sponsor

      You may be able to find a fiscal sponsor near you by using the Fiscal Sponsor Directory (www.fiscalsponsordirectory.org). Another place to search is at your local community foundation. Community foundations have wide connections in the areas they serve and likely are aware of qualified fiscal sponsors.

      

If your area doesn’t have a community foundation nearby, find another nonprofit in your area that provides referrals and ask for help in finding the right agency to sponsor your project.

      You don’t want to go with just any fiscal sponsor. You have to do your homework to find one that fits your needs. First determine whether the sponsor’s mission covers the type of program you’ll be offering. Then do a little research to find out whether the sponsor is trustworthy and financially healthy. For example, you can perform an Internet search for the fiscal sponsor’s name. Does its name appear in news stories detailing nonprofit misconduct or other skullduggery? Ask others in your community, including individuals who are knowledgeable about nonprofit activities in your town. While you’re at it, read its 990 tax form posted on GuideStar (www.guidestar.org) to see if it’s financially sound.

      When you’re vetting a fiscal sponsor, ask the sponsor these questions to determine whether it’s a good fit for your project:

      ❯❯ Do your board of directors and accounting and legal advisors approve of each fiscal sponsorship?

      ❯❯ Do you charge for specific services, such as access to insurance programs, over and above your basic sponsorship fees? What additional services do you offer?

      ❯❯ Do you allow sponsored projects to hire salaried employees, and do you provide payroll services and access to health insurance?

      ❯❯ Do you provide coaching and mentoring in nonprofit management and fundraising?

      ❯❯ How frequently do you write checks to pay bills? What’s the frequency and format of financial reporting for the sponsored program?

      ❯❯ Do you require projects to maintain a minimum annual income?

      ❯❯ Do you formally acknowledge gifts and donations?

      ❯❯ Do you help sponsored projects raise funds through your website?

      

The National Network of Fiscal Sponsors (www.fiscalsponsors.org) has developed guidelines for best practices in fiscal sponsorship. If you’re considering using a fiscal sponsor, we suggest reviewing these guidelines to help you make a choice about which fiscal sponsor is best for your project.

Chapter 3

      Creating Your Mission Statement

      IN THIS CHAPTER

      ❯❯ Identifying the key components of a strong mission statement

      ❯❯ Creating an effective mission statement with the help of your board, staff, and volunteers

      ❯❯ Using your statement to make organizational decisions

      A good mission statement clearly states a nonprofit’s purpose – including who benefits from its work – and how it works to fulfill that purpose. The process of developing your mission statement is important because it can help you refine your ideas, test them with other people, and inspire those involved in the mission-writing process.

      Mission statements can be one-liners or long declarations that go on for two or more pages. We suggest aiming for something between these two extremes. A mission statement contained in one line resembles an advertising slogan, and a long, rambling statement is rarely read or remembered, even by the board of directors and staff members.

      Take some time to think about what you want to include in your mission statement because it defines what your organization hopes to accomplish. After you’ve decided on your organization’s mission statement, you can use it as your go-to reference when making decisions about your nonprofit’s activities. You’ll also include your mission statement in your 990 tax report to the IRS, in brochures, and in grant proposals. You may even print it on your business cards or coffee mugs.

      In this chapter, we give you some guidance about how to create a simple yet compelling mission statement.

      

Check out File 3-1 at www.dummies.com/go/nonprofitkitfd5e for a list of web resources related to the topics we cover in this chapter.

      Mission Statement Basics

      The mission statement is an organization’s center. We were tempted to use the word heart rather than center, but we think that’s stretching the metaphor a little. We also could have said that mission statements are living, breathing organisms from which all organizational life flows, but that’s really going too far. People are at the heart of and bring life to an organization. Mission statements just help give this human energy direction.

      Can organizations operate without good mission statements? Yes, and some do. We’re sure that some nonprofits out there haven’t looked at their mission statements since the first Bush administration, and they’re still doing good things. But the world has changed since the early 1990s, and organizations have likely adapted to those changes. An organization’s chances of success in making that adaptation are better if the nonprofit and the people associated with it know exactly why it exists, what they’re trying to do, and how they’re going to do it.

      

A mission statement should state what the organization’s purpose is, how the purpose will be achieved, and who will benefit from the organization’s activities. It may also include organizational values and vision. In addition, the mission should be

      ❯❯ Memorable: You want to carry it around with you at all times.

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