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FlSCAL SPONSORSHIP GRANT AGREEMENT
On _______________, 1999, ___________________ ("Grantor") decided that financial support
of the following purposes __________________________________ ("the project"), more particularly described in a proposal dated _____________________________,1999 ("the proposal"), from _____________________________________("Grantee") will further Grantors tax-exempt purposes under Section 501(cX3) of the Internal Revenue Code ("lRC"). With regard to the selection of Grantee or any other beneficiary to conduct the project, Grantor has exercised and shall retain full discretion and control over the selection process, acting completely independently of Grantee or any funding source. Grantor has created a restricted fund designated for the project and has decided to grant all amounts that it may receive and deposit to that fund (less any administrative charge set forth below), to Grantee, subject to the following terms and conditions:
1. Grantee's separate legal existence, for all purposes including tax reporting, is established by the following: [choose one]
Grantee is a ___________________nonprofit corporation which is, and shall be throughout the duration of this Agreement, organized and operated for tax-exempt purposes described in IRC Section 501(c)(3). Grantee has applied to the Internal Revenue Service for recognition of its tax-exempt status and shall keep Grantor informed on the progress of its application. OR
Grantee has provided Grantor with a completed and filed IRS Form SS-4, along with any other registration or governing documents, showing Grantee's separate existence as an unincorporated association. OR
Grantee is an individual person, acting as a sole proprietor. OR Grantee is a partnership comprised of _______________________.
2. Grantee shall use the grant solely for the project described in the proposal, and Grantee shall repay to Grantor any portion of the amount granted which is not used for that project. Any changes in the purposes for which grant funds are spent must be approved in writing by Grantor before implementation. Grantor retains the right, if Grantee materially breaches this Agreement, to withhold, withdraw, or demand immediate return of Grant funds, and to spend such finds so as to accomplish the purposes of the project as nearly as possible within Grantor's sole judgment. Consistent with Interpretation No. 42 of Statement No. 116 issued by the Financial Accounting Standards Board, Grantor retains the unilateral power, without approval from any funding source, from Grantee, or from any other interested party, to redirect use of grant funds away from Grantee to another beneficiary capable of fulfilling the purpose. of the project. Any tangible or intangible property, including copyrights, obtained from third parties or created by Grantee as part of this project shall remain the property of Grantee. The amount and date of each disbursernent of grant funds to Grantee shall be within the discretion of Grantor.
3. Grantee may solicit gifts, contributions, and grants to Grantor, earmarked for the purposes of the project. Grantee's choice of funding sources to be approached, and the text of Grantee's fundraising materials, are subject to Grantor's prior written approval. All grant agreements, pledges, or other commitments with funding sources to support this project shall be executed by Grantor. The cost of any reports or other compliance measures required by such funding sources shall be borne by Grantee. Grantor shall be responsible for the processing, acknowledgment, and deposit in the restricted fund of all monies received for the project, which shall be reported as the income of Grantor for both tax purposes and for purposes of Grantor's financial statements.
4. Grantee assumes the risk that any funding source may exercise the discretion to not grant or not appropriate funds to Grantor for support of the project. Any amount advanced by Grantor to Grantee, with the expectation that a pending grant request will be approved by a funding source, shall be treated as an obligation to be repaid by Grantee to Grantor, either from monies deposited in the restricted fund or from Grantee's assets, upon demand by Grantor. Regarding any funds awarded to Grantor by the City and County of San Francisco ("City") for support of the project, the parties agree as follows: Grantor's rights under this Agreement may be assigned to City without the prior consent of Grantee. This Agreement shall incorporate all the applicable terms of any Grant Agreement executed between Grantor and City, including but not limited to the City's audit and inspection rights. Grantee shall be listed as a "permitted subcontractor" under any such City Grant Agreement.
5. An administrative charge of ________ percent ( _____ %) of all amounts deposited to the restricted fund shall be transferred to Grantor's general fund to defray Grantor's costs of administering the restricted fund and this grant. In addition, any interest earned on the restricted fund shall be retained in Grantor's general fund.
6. Grantor shall not be responsible for the community programs, public information work, fundraising events, accounts payable and receivable, negotiation of leases and contracts, insurance, day-to-day disbursement of project funds, or other matters related to activities conducted by Grantee. No one working on the project shall be an employee of or independent contractor with Grantor. Grantee shall assume full and complete responsibility for all liabilities to third parties incurred in connection with the project including but not limited to any and all claims whether asserted or unasserted while this Agreement is in effect. With regard to the selection of any subgrantees to carry out the purposes of this grant, the Grantee retains full discretion and control over the selection process, acting completely independently of Grantor. There is no agreement, written or oral by which Grantor may cause the Grantee to choose any particular subgrantee.
7. Nothing in this Agreement shall constitute the naming of Grantee as an agent or legal representative of Grantor for any purpose whatsoever except as specifically and to the extent set forth herein. This Agreement shall not be deemed to create any relationship of agency, partnership, or joint venture between the parties hereto, and Grantee shall make no such representation to anyone.
8. Grantee shall submit a full and complete report to Grantor as of the end of Grantee's annual accounting period within which any portion of this grant is received or spent. The initial report shall be submitted by Grantee no later than sixty (60) days after the end of such period. The report shall describe the charitable programs conducted by the Grantee with the aid of this grant and the expenditures made with grant funds and shall report on the Grantee's compliance with the terms of this grant.
9. This grant is not earmarked to be used in any attempt to influence legislation within the meaning of Internal Revenue Code Section 501(c)(3). No agreement, oral or written, to that effect has been made between Grantor and Grantee.
10. Grantee shall not use any portion of the funds granted herein to participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office, to induce or encourage violations of law or public policy, to cause any private inurement or improper private benefit to occur, nor to take any other action inconsistent with Section 501(c)(3) of the Internal Revenue Code.
11. Grantee shall notify Grantor immediately of any change in (a) Grantee's legal or tax status, or (b) Grantee's executive staff or key staff responsible for achieving the grant purposes.
12. Grantee hereby irrevocably and unconditionally agrees, to the fullest extent permitted by law, to defend, indemnify and hold harmless Grantor, its officers, directors, trustees, employees and agents, from and against any and all claims, liabilities, losses and expenses (including reasonable attorneys' fees) directly, indirectly, wholly or partially arising from or in connection with any act or omission of Grantee, its employees or agents, in applying for or accepting the grant, in expending or applying the funds furnished pursuant to the grant or in carrying out the program or project to be funded or financed by the grant, except to the extent that such claims, liabilities, losses or expenses arise from or in connection with any act or omission of Grantor, its officers, directors, trustees, employees or agents.
13. Either Grantor or Grantee may terminate this Agreement on thirty (30) days' written notice to the other party, so long as another nonprofit corporation which is tax exempt under IRC Section 501(c)(3), and is not classified as private foundation under Section 509(a) ("a Successor"), is willing and able to sponsor the project. The balance of assets in Grantor's restricted fund earmarked for the project shall be transferred to the Successor at the end of the notice period or sooner if all parties so agree. Grantee shall be eligible to be a Successor itself so long as Grantee has received, no later than the end of the notice period, a determination letter from the Internal Revenue Service indicating that Grantee meets the qualifications for a Successor stated above.
14. In the event of any controversy, claim, or dispute between the parties arising out of or related to this Agreement, or the alleged breach thereof, the prevailing party shall, in addition to any other relief, be entitled to recover its reasonable attorneys' fees and costs of sustaining its position.
15. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to agreements made and to be enforced entirely within such State.
16. This Agreement shall supersede any prior oral or written understandings or communications between the parties and constitutes the entire agreement of the parties with respect to the subject matter hereof: This Agreement may not be amended or modified, except in a writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Fiscal Sponsorship Grant Agreement effective on the ______________ day of _________________ , 199_.
GRANTOR: __________________________________________
By: ______________________________
Name:____________________________
Title:_____________________________
GRANTEE: __________________________________________
By: ______________________________
Name:____________________________
Title:_____________________________
EXHIBIT 1: SPONSORSHIP POLICIES
Sponsorship Policies of FS
Accounts Payable
Acceptable invoices received by end of business on any Monday will be paid and mailed by end of business on the following Friday. "Acceptable invoices" must be original, approved, coded documents (small receipts to be mounted on 8.5 x 11 paper). It will be the responsibility of each project to submit a completed IRS Form W-9 for each new vendor.
Cash Advances
Under no circumstances does FS advance money to projects. Deposited funds must be cleared by the bank prior to any requested draw, which may take up to two weeks.
Employees
FS does not allow projects to pay individuals who satisfy the IRS definition of employees as contractors. FS management is available to discuss employee vs. contractor classification issues with projects.
Payroll
ANY request to change a payroll record (pay rate, termination, regularly scheduled hours) must be communicated to FS management via an employee action sheet at least five business days prior to the effective date of the change. In order to receive a paycheck, an employee must have submitted a completed; INS Form I-9, IRS Form W-4, California Development Department Form DE-4 (if applicable), signed acknowledgment of receipt of a personnel policies manual, and an employee action form at least five business days prior to payday. FS management will provide action forms, file all payroll tax returns, and IRS Form W-2's. The head of each project will need to sign a statement agreeing that their project will not deviate from the personnel policies manual.
Bonuses are a very regulated benefit for tax-exempt organizations in California. In fact, the payment of discretionary bonuses is expressly prohibited. FS management is available to discuss incentive compensation arrangements with projects to help avoid conflicts with regulatory agencies.
Benefits
No project can offer or deny benefits to its employees which differ from the personnel policies manual.
Job Descriptions
Projects are asked to develop and maintain job descriptions for each employee.
Grants, Awards, and Scholarships Made
For any grants, awards, or scholarships made by a project, FS management requires a copy of the signed grant agreement along with a completed check request form. FS's Executive Director's signature is required for amounts over $5,000. If the grant is made to an organization that is not a 501 (c) (3) charity that FS currently lists in its database, additional paperwork will be required. Forms and procedures are subject to the Executive Director's review.
Grants Received
FS's Executive Director must co-sign all original grant agreements and be copied at least one week in advance on all progress and final report submissions. Grants involving government or public agency monies have very heavy reporting and auditing requirements that a project must discuss in advance of acceptance with the Executive Director.
Donations
FS will accept, process, and acknowledge contributions to each project. This includes issuing receipts for tax deductions. Donations should be made payable to "XXX, a project of FS".
It is not the FS accounting staff's responsibility to meet with a fund's donors and walk them through paperwork. FS management will work with funds to educate them on the necessary forms to liquidate a noncash gift. Donations over $250.00 will be individually receipted. Stock gifts can only be made through FS's designated broker.
Credit Accounts and Other Liabilities
Project Directors may not incur debts or liabilities beyond the project's ability to pay; individual Project Directors are personally liable for any excess. A project's ability to pay is measured strictly by its cash balances, without including anticipated grants or contributions.
Fundraising Activities
Fundraising activities are very labor intensive to administer. FS management requires at least one month's notice of any fundraising events. A copy of all mailings and solicitations must be approved by FS management in advance of mailing or other distribution. The project must complete a Fundraising Checklist form prior to each event. Please remember, other than bingo, any fundraising device involving an element of chance (ex. raffles) are a misdemeanor in California. FS management is available to answer any questions a project may have regarding fundraising activities.
Volunteers
The use of volunteers exposes FS to additional liability. ALL volunteers who provide services to, or perform services for, a project without compensation for their time must sign the standard volunteer indemnification and release form. (Reimbursement of expenses does not constitute compensation for time spent.)
Financial Statements
FS management will provide a statement of monthly activity and a detailed trial balance within 30 days of each month end. Any corrections to the project's accounts must be requested within 30 days after receipt of that statement.
Bank Accounts
No project shall maintain any bank account other than those maintained on its behalf by FS.
Multiple Funds
FS has the ability to set-up cost centers within a fund. FS also has the ability to set-up multiple funds for a project. In situations where projects need multiple funds on the general ledger, FS management is available to advise on inter-fund transfers to help compliance with charitable trust rules.
Advisory Board
Each project will need to maintain a current listing of the names, addresses, and phone numbers of all members of a project's Advisory Board. Advisory Boards will be provided with standard Articles of Association and FS will register those articles with the State of California. Each project should forward a copy of meeting minutes to the FS Executive Director, as they are finished, as well as the Advisory Board roster and any other governing documents.
Administrative Fees
Except as stated below, FS will charge each project 10% of its gross receipts as an administrative fee. The forgoing rate does not apply to receipts attributable to grants from governments or public agencies, which are subject to a 15% administrative fee.
In addition to the administrative fee on gross receipts, FS will retain one-half of all interest earned by a project's funds on deposit.
FS will charge projects $50.00 for each employee to cover setup costs.
FS will charge projects $50.00 for each manual check required.
Insurance Provided by FS
FS maintains general liability insurance, and workers' compensation insurance for all employees at no additional charge.
Fiscal Year
All projects must use a fiscal year ending on June 30.
Lobbying
Funds are prohibited from excessive lobbying, or any other activities that would jeopardize FS's charitable tax-exempt status. FS has the right to determine, in its sole discretion, what constitutes excessive lobbying by a project, or what activities jeopardize FS's tax-exempt status. All lobbying expenditures must be reported to FS management.
Mail Services
FS is applying for a bulk mail permit that may be available to projects. To be eligible to use FS's permit, a mailing must go through FS's designated mailhouse. Costs for this service will be charged against the project.
Sponsor Identification
All project letterheads and external communications must include the identifying line, "A project of Fiscal Sponsor."
Amendments
These policies may be amended from time to time with consent of Project's authorized representative.
Acknowledgment
I have received, understand, and agree to the forgoing sponsorship policies of Fiscal Sponsor, on behalf of my project.
_____________________________ ________________________
Program Director's Name & Signature Date
or
__________________________________ ________________________
Advisory Board Chair's Name & Signature Date
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