"Creating Your Own Project" series - Fiscal Sponsorship

"How Philly Moves" photo shoot (Photo: JJ Tiziou

Freelancers are more likely to start their own projects than company dancers. While those with company contracts spend much of their time focusing their energy towards getting promoted, freelancers often have extra time to flex their creativity muscles. For many years, I have been focused on simulating the season of an annually contracted dancer through my freelance career. As I traveled the world from company to company, I watched many of my other freelancing friends create their own projects. Well, now that I've settled down in Philly for the past 3 months, I've had more time to develop my own ideas and see where they take me. In a handful of coming posts, I'll be sharing more about a project that I am creating. But for the time being, I'd like to discuss fiscal sponsorship, an important aspect of raising funds for your own projects. 

When I first started brainstorming ideas to give myself a platform to work more on my choreography, I knew that I would need to navigate the tricky technique of fundraising. I don't like asking people for financial support and have always had great pride in my ability to do things on my own. But when it comes to major arts projects, very few artists can execute their plans without a solid base of funding. Most people's first fundraising thought darts straight into the land of crowd-sourcing (like Kickstarter, Indiegogo, and Rockethub, which I will discuss in a future blog). While this method of fundraising can be a great supplemental tool, there are many more strategic and fruitful ways to fund a project. 

Initially, the people that are going to provide the base of funding for your work will be your friends and family, as well as people that have shown previous interest in you as an artist. But without the ability to offer tax-deductible donations, you are unlikely to field sponsorship beyond $100. Most people don't mind giving a small amount of money without much benefit for themselves other than the gratification of giving and seeing somebody else's passion project come to fruition. Anything over $100 will be difficult to field without a benefit for the donor. What is the best perk you can give somebody who wants to offer a substantial gift? A tax deduction.

How does a lone individual like me offer tax-deductible donations when I am my one single entity. I'm not prepared to start a non-profit organization or field a board for my very first try at self-producing my art. In all of my research over the past few months, I have found that there is a way that I can offer such benefits to anybody that is inspired enough by my work to help commission my process. I can do this through fiscal sponsorship.

Fiscal sponsorship is when a not-for-profit organization (often 501(c)3) offers a pathway for funds an individual raises to be filtered through their company back to the creator in order to help them offer tax-deductible benefits to donors, often for a fee of 5-10% of the donation amount. Essentially, donations are legally funneled through the organization to appear as if the company is receiving the gift.

Beyond the benefit of receiving tax credits on donations, fiscal sponsorship also allows an individual to apply for grants in a way that they couldn't have before. Again, using the umbrella of the sponsoring non-profit, one can reach out beyond seeking offerings for individuals and apply for grants that are only available to not-for-profit companies. Using fiscal sponsorship, you can open many more pathways to receive larger amounts of funding to make your project a reality.

How do you find an organization to fiscally sponsor you? I did a great deal of research on my path to funding my work. After checking out a handful of potential sponsors, I settled on New York Live Arts (often referred to as NYLA). In order to apply for sponsorship, I had to sign up as an Associate Artist ($100 fee). From there, I had to write a proposal. This included information about my project, its mission, a loose timeline, a budget, and how I planned on raising funds. Once I submitted all of this information, I had to travel to New York City for an in-person meeting to discuss specific details of my project. I was lucky enough that NYLA was happy to fiscally sponsor me with no further questions beyond my proposal.

While I set my sights on NYLA for sponsorship, there are many other organizations that help artists gain a non-profit-like status. Among those I researched were Fractured Atlas and The Field. These organizations regularly offer fiscal sponsorship to artists. Along my path, I also found that you can reach out to any non-profit organization and request that they allow funds to be allocated through their organization. If you have a relationship that could open up this door, be sure to have clear terms on how this set up will work in writing. Every organization will be different in the percentage of funds they keep for helping you out,  how long it takes for that money to be released, how you apply for grants, what type of grants you can apply for, and much more. Be sure that all of this is clear before you sign any contract. Also be aware that you will be responsible to pay taxes on the money that you raise. Keep tabs on your expenses to make sure that you deduct the expenses to minimize how much you have to pay back at the end of the year.

Fiscal sponsorship is a god-send to many self-creating artists like myself. It is very unlikely for most individuals to receive larger donations without offering something to funders beyond your final product. With fiscal sponsorship, you not only open up the possibilities of greater funding, you vastly expand your pool of grant applications. If you ever consider creating your own work; whether for one show, a tour, an installation series, or anything else that inspires you, definitely look into connecting with a respectable non-profit organization that will allow your funds to be stream-lined through their system.