Delivered September 30, 2020. Contributor: Michelle A.
To obtain the amount of money spent globally on both fiscal sponsorship and equivalency determination.
According to NGOsource, grantmakers could spend between $5,000 and $10,000 in fees in order to obtain an equivalency determination (ED).
NGOsource's business model is to facilitate ED for non-profits. The cost includes a membership fee (ranging from $1,000 - $10,000 per year), as well as a per ED fee that ranges from $250 to $1,760.
This document outlines the benefits of using NGOsource to obtain EDs, and also lists some clients, including the Bill & Melinda Gates Foundation, DuPont, and the Rockefeller Foundation.
Although this does not include data on EDs, it does provide information on the amount U.S. foundations are giving to foreign companies/nonprofits, which provides insights into the size of the international giving space.
Nonprofit Quarterly published an article in February 2018 where they examined the types of organizations that serve as fiscal sponsors. Thirty four percent of nonprofits examined were in the art, culture & humanities industry, followed by 16% in the philanthropy, voluntarism & grantmaking industry. No other industry accounted for more than 10% of the sample.
The Fiscal Sponsorship Directory lists 333 U.S. non-profits that function as fiscal sponsors. They also report that these companies sponsor a total of 15,906 projects.
Fractured Atlas, the largest fiscal sponsor, accounts for more than 25% of the projects, and charges a fee of 8% of donations, in addition to a nominal membership fee.
The average fee is generally 10%, but it can range from basically 0 to 25%. Fees can be taken from revenue or from expenses.
According to a report published in 2006, the majority of fiscal sponsors who use a flat fee model had fees that ranged from 1-5% of the project budget. Twenty eight percent had fees between 6 and 9%. Although this data is about 15 years old, it was the most comprehensive data available so it has been included.
Summary of Findings
No data was found in the initial search on the amount spent per year on fiscal sponsorship or equivalency determination. To attempt to find this data we looked for market reports, examined data provided by experts in the field such as Fiscal Sponsor Directory, and consultants that focus on nonprofits such as Learning for Action.
We were able to find some limited data on the fees charged by fiscal sponsors, and also examined the 990 for Fractured Atlas, the largest fiscal sponsor, to see if we could obtain the requested information. Although there is a great deal of financial data provided in the 990, it was not 100% clear how much was collected in fees. Additionally, it is not practical to examine the 990s for the over 300 fiscal sponsors that operate in the U.S.
Only the project owner can select the next research path.