When a person or organization donates to a non-profit, they likely do so because they hope their money will support a cause, issue, or project they believe in. But they probably think very little about how that money gets to the non-profit, so it can then be used to do good work.
Fiscal sponsors, however, consider this process daily. These sponsors offer vital services such as fiduciary oversight, financial management, and other administrative services to support charitable projects. Not only are their services important, they are growing! According to a 2023 report from Social Impact Commons and the National Network of Fiscal Sponsors, 71% of the fiscal sponsors who responded to their survey saw demand for their services increase since 2020.
While fiscal sponsors serve an important role for charitable projects, allowing them to focus on their core mission in an increasingly complex and bureaucratic field, they also face a pressing challenge. The increase in demand for their services has left many of them feeling strained, with little support to help them grow.
In their revealing survey, the Social Impact Commons and National Network of Fiscal Sponsors found that "for every two new projects brought in, sponsors turned away one project." A staggering 86% of survey respondents admitted to rejecting projects, with over a quarter temporarily halting the intake of new projects in the previous fiscal year. Yes, that’s right. Nearly 9 out of 10 fiscal sponsors had to reject new opportunities, with 8 of them citing a lack of operational capacity as the main driver for their decision.
As the demand for fiscal sponsors skyrockets, their capacity to accommodate new projects has reached its limit. To alleviate this challenge, fiscal sponsors are searching for fresh and innovative ways to amplify their support while reducing their workload. The report underscores the most pressing needs lie in program/project management and finance. What’s more, two-thirds of sponsors expressed they were either unsure or knew they did not have sufficient technology capacity to support their projects
Financial management stands as a cornerstone service provided by fiscal sponsors. However, it's also an area fraught with challenges caused by manual processes, human error, and a lack of technology tailored to their requirement
Picture this scenario: A fiscal sponsor is collaborating with 100 different charitable projects, each with unique fundraising needs. Each of those projects processes their donations through their fiscal sponsor, who consolidates the funds in a single bank account, reconciles them, and then distributes the donations to each sponsored project.
While the process may appear straightforward, it's far from easy. Relying on a single fundraising account can cause confusion for projects and donors, potentially resulting in chargebacks and fraud reports. Moreover, this setup can make it difficult for fiscal sponsors to offer visibility and control over their funds to their clients. And let's not forget the arduous and manual reconciliation process, consuming valuable time and resources while ensuring compliance with PCI and other regulatory standards.
With so much to manage and the lack of adequate technological support, it's no wonder fiscal sponsors have been hesitant or refused to take on new projects in recent years.
The power of payment processing technology, however, can transform this industry.
At Give Corporation, we understand and appreciate the challenges confronting fiscal sponsors. With years of experience collaborating with them, we understand the intricate and unique requirements inherent to non-profit work. With Sync, we’ve engineered a solution that gives fiscal sponsors access to essential tools while reducing and in many cases getting rid of manual work.
Consolidated Payment Processing: With Sync, donations from multiple projects are automatically consolidated into a single portfolio account, owned and controlled by the fiscal sponsor. Customized and branded donation forms for each project ensure seamless processing without any confusion for donors.
Automated Reconciliation: While every donation gets settled in the fiscal sponsor’s account, Sync offers transparent fund allocation and effortless disbursement for each project, streamlining reconciliation, saving precious time and resources, and making IRS filings less daunting.
Customizable Processing Rates: Sync operates on a fixed processing rate of 2.54% + 30 cents. This gives fiscal sponsors the clarity and consistency they need, while also allowing them the flexibility to decide what pricing model they would like to use with their projects. Our system can require donors to cover the processing fees, charge it directly to the projects, or give projects and donors the choice. What’s more, fiscal sponsors may add additional service fees on top of processing rates to help cover operating costs.
Advanced Fraud Prevention: Nonprofits are notoriously associated with high rates of payment fraud. With Sync’s patent-pending fraud prevention technology and industry-leading accuracy in blocking fraud attempts altogether, fiscal sponsors and their projects are safe from the exploitation of bad actors. Our unique billing descriptors for each project also help to wipe out friendly chargebacks, as supporters will have full transparency as to whom they’ve donated money.
Control Mode: With Control Mode, fiscal sponsors gain multi-level oversight, allowing them to dive into project accounts, all the way down to a single donation or supporter profile, whenever needed. Fiscal sponsors can empower team members with customizable permissions to make sure only those who require specific access, get it. It's a superhero power to assist sponsored projects with any task, anytime!
Each of these tools is designed specifically to drive growth and productivity for fiscal sponsors, empowering them to streamline operations and better allocate their resources.
Imagine...
How much more could you achieve as a fiscal sponsor with the time saved? Or, perhaps more importantly, how many additional projects could you welcome aboard?
Elevating your role as a fiscal sponsor goes beyond saving time and operational costs—it's also about increasing the satisfaction and loyalty of the projects you support.
Sync not only provides the essential features and services that fiscal sponsors need, but also meets the expectations of your projects, offering:
Best of all, these tools come at no additional cost or effort for the fiscal sponsor. Plus, Sync is committed to continuous innovation, regularly introducing new products and enhancements to create more value and exceed client expectations.
With Sync, your projects have everything they need to thrive, ensuring they never need to seek fiscal support elsewhere.
We're unlocking a new era of trust, transparency, and efficiency in charitable giving. One that revolutionizes how nonprofits operate, and donors engage with causes they believe in.
With Sync, donors can contribute to their chosen cause, confident that their money will go to the right place. Our customizable payment forms instill trust, ensuring donors know they're supporting the right organization. And with clear, distinctive billing descriptors on their bank statements, donors can easily recognize and verify their contributions.
Our patent-pending fraud protection and security measures ensure that every transaction is safeguarded from start to finish. From the moment a donation is made, its secure transfer from the donor to the fiscal sponsor and finally to the intended project is protected every step of the way, ensuring a hassle-free experience with minimal fees.
What's more, Sync leads the industry as one of the first payment processors to achieve PCI DSS 4.0 compliance—an achievement that sets the standard for data security and regulatory compliance. With Sync, fiscal sponsors can rest assured that they're not just keeping up with current regulations but staying ahead of future requirements, sparing them from potential headaches down the line.
As the world of fiscal sponsorship grows and evolves, it’s time to redefine the landscape of charitable giving with transparency, security, and technology. The future of non-profit support has never looked brighter! At Give, we're thrilled to be at the forefront of this transformation, offering innovative solutions to the challenges faced by fiscal sponsors.
With Sync, the possibilities are endless. Not only can you save time and energy as a fiscal sponsor, allowing you to support new projects and causes, but those projects can also get back to the work they are passionate about, without being burdened with financial worries.
Are you a fiscal sponsor struggling to onboard new projects, or looking for more support from the technology and services you use to do your work effectively? We’d love to start the conversation!
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