August 7, 2015

What's a Fiscal Sponsor and Does Your Film Need One?

Are you planning to finance your next film through grants and donations instead of investors? If you are, it may be worth your time to look into getting a fiscal sponsor.
The basic concept of a fiscal sponsor: your film gets umbrella non-profit status via your fiscal sponsor, the fiscal sponsor gets an administrative fee per donation (mainly to disperse your funds to you), and granting organizations and private donors can get the perks of donating to a 501(c)(3) non-profit (like tax deductions) while sparing you, the filmmaker, the tedious process of becoming a non-profit yourself. If you're interested in going this route, here is a quick crash course.

What is a Fiscal Sponsor?

Does getting non-profit umbrella status mean you can't make any profit off your film? Not at all. Does the fiscal sponsor own my film? No, and don't sign on to any sponsor claiming otherwise. Is fiscal sponsorship just some sort of quixotic workaround to channel tax deductible funds into otherwise ineligible films? Who knows — I'm a filmmaker, not a legal expert! However, if you want to find out more, there's a whole book on the subject of fiscal sponsors, Fiscal Sponsorship: 6 Ways to Do It Right, by Gregory Colvin of the Study Center Press, who defines a fiscal sponsor like this:
 
Fiscal sponsorship enables a nonexempt charitable project to raise funds and operate through an exempt sponsor who manages the project's money and reports to funders and tax agencies. Many other administrative services can be provided as well.
 

Having umbrella non-profit status doesn't mean your film has non-profit status. It just means that since your fiscal sponsor is accepting donations on your behalf, those donations receive the tax-deductible treatment of a donation to a 501(c)(3). Today, many major granting organizations that dole out funds for films, like the NEH or Cinereach, require that the project have a fiscal sponsor. So if you're looking to score a grant from an entity like this, a fiscal sponsor is a must.

If you want to look into the finer details of a fiscal sponsor, here are some great free resources to get started:

How Do I Choose a Fiscal Sponsor?

Once you've decided that you will be needing a fiscal sponsor, the next step will be deciding which one is the best fit for you. There are three main reasons you generally decide on a particular fiscal sponsor. The first is by a geographic location relevant to you or your film (e.g. the Austin Film Society might be a great fit if you or your film has a tie to the region/is shooting there.) The second is by an organization whose mission statement is in line with your film (e.g. a non-profit who raises awareness about endangered species, and your film is about the reintroduction of the Mexican Grey Wolf.) The third and most common means of choosing your fiscal sponsor is by its reputation within the film world (e.g. the Independent Filmmaker Project (IFP), known for Film Week and Filmmaker Labs, might be a good fit if you're looking to develop a relationship with this independent film organization.)

The Fiscal Sponsor Directory is an extremely useful database of information on every fiscal sponsor in the country, including what they charge and what their rules are. You should exercise caution with who you choose, because, ultimately, they will be handling your $$$! Some important points to research about a prospective fiscal sponsor:

  • How much do they charge, and how/when is it taken out? (The average fiscal sponsor fee is 10%.)
  • Any red flags, like do they retain any creative control of your project or what you spend $ on?
  • Do they offer any other services as a fiscal sponsor?

What Other Filmmakers Have to Say

To round off this round-up of information, here's some first hand experiences from a handful of fellow filmmakers kind enough to share feedback with No Film School about their fiscal sponsors (and why they chose them.)

From feature narrative director Leah Meyerhoff about the San Francisco Film Society:

"SFFS was a perfect fiscal sponsor for I BELIEVE IN UNICORNS since we filmed in the Bay Area and they were able to give practical production advice in addition to financial assistance"

From feature documentary producer Alex Reinhard about the IFP:

"IFP provided a support system that BRAVE NEW WILD lacked before finding a fiscal sponsor.  I can't say enough about the staff and how they were a phone call away from any questions we had. IFP simply cares about independent film."

From feature documentary director Laura Checkoway about Women Make Movies:

"Women Make Movies was a great match for LUCKY because the film follows one young woman's life and the circle of women who help her get by. We attended some illuminating informational sessions at WMM. It means a lot that they see the strength in this story and have been our fiscal sponsor since the beginning."

There are many, many more fiscal sponsors. For a great list, check out the PBS Fiscal Sponsor resource, or search for specific criteria using the Fiscal Sponsor Directory. For starters, here is a VERY short list of some reputable fiscal sponsors specific to independent film, with a link to their FSD page:

Have you had a positive (or negative) experience with a fiscal sponsor?     

Your Comment

2 Comments

Great article. Very happy you shared this.

August 7, 2015 at 4:25PM

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Jonesy Jones
Storymaker
719

Hey Oakley, great article. Did you speak with anyone or find any examples of option #2, partner with "an organization whose mission statement is in line with your film"?

April 22, 2016 at 3:17PM

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Matthew Andrews
Producer
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