Tiny News Collective offers discounted fiscal sponsorship to LION members

One of the benefits of being a 501(c)(3) nonprofit news organization in the U.S. is the ability to accept tax-deductible donations from foundations and other philanthropic givers.

But for organizations that have chosen to be for-profit (like two-thirds of LION members), new nonprofit organizations waiting on their 501(c)(3) status, or nonprofit organizations other than 501(c)(3)s, a fiscal sponsor can receive those donations on their behalf.

That’s why LION is thrilled to announce a new membership benefit: discounted fiscal sponsorship through Tiny News Collective, which provides tools, resources and expertise to help communities build sustainable news organizations.  

LION members can apply here for fiscal sponsorship through Tiny News Collective. If you are not yet a LION member, you can learn about LION’s membership criteria and apply to join here.

The discounted fiscal sponsorship fee for LION members is 5% of all program grants and donations received. LION members that become fiscally sponsored by Tiny News Collective will also have access to their resources and efficiency, field experience, network of funders and changemakers, and other technical assistance. Tiny News Collective is fully committed to supporting the editorial independence of its fiscally sponsored projects.

If you’re interested in taking advantage of this membership benefit or learning more about how fiscal sponsorship can benefit your organization, feel free to reach out to Tiny News Collective’s Finance Manager, Jason Tompkins at  [email protected].

Find answers to some frequently-asked questions about fiscal sponsorship below. If you have additional questions about LION Publishers membership, please email [email protected].

FAQ

What is fiscal sponsorship?

Fiscal sponsorship is a practice that has evolved as an effective and efficient means of funding new charitable initiatives, delivering public services, and seeding social movements. In a typical fiscal sponsorship relationship, a nonprofit organization confers its 501(c)(3) tax-exempt status to groups that are engaged in activities that serve the host’s mission, typically for a fee. 

Donations to the projects are directed to the fiscal sponsor and are restricted by the fiscal sponsor to support activities of the project, and fiscal sponsor organizations are responsible for assuring the activities of the project fulfill their charitable purpose.

How does Tiny News Collective provide fiscal sponsorship?

Tiny News Collective provides a legal framework for their “Model C” fiscally sponsored projects, enables the movement of resources from funders and donors to projects, and facilitates a community of practice made of news organizations across the country that are also growing and scaling in real time.

What will fiscal sponsorship from Tiny News Collective cost my organization?

(Updated June 28, 2024) The discounted fiscal sponsorship fee for LION members is 5% of all program grants and donations received. For example, if your business receives a $25,000 grant, $1,250 (5%) of that grant would go to Tiny News Collective as the fiscal sponsor.

This fiscal sponsorship service is available to both for-profit LION members and members that are seeking, but have not yet received, a nonprofit designation from the IRS. Upon signing a fiscal sponsorship contract with TNC, you would also pay an initial administrative fee of $300 and then a recurring annual administrative fee of $300.

Why is fiscal sponsorship beneficial?

Fiscal sponsorship can provide: 

• Access to tax-deductible donations and grants that might not otherwise be available. Setting up a new nonprofit organization can be a time-intensive and expensive process, involving legal fees, paperwork, and other expenses. By working with a fiscal sponsor, organizations can avoid many of these costs and administrative burdens.  
• Administrative support and financial oversight
• Credibility for a new project or organization by associating with an established nonprofit organization.
• Access to established relationships with foundations, donors, and other organizations. This can facilitate securing additional funding and other resources.
• A streamlined nIt can provide a quick and easy way approach to starting a new project or testing a new program without having to go through the lengthy and expensive process of forming a separate nonprofit organization.  

Is fiscal sponsorship right for my organization?

Fiscal sponsorship is not a one-size-fits-all solution. You’re encouraged to reach out to Tiny News Collective’s Finance Manager, Jason Tompkins at [email protected] to discuss what option might be best for you. 

Here are some additional resources from LION:

• 5 Tips for Choosing a Fiscal Sponsor for Your Newsroom
• Non-Profit vs. For Profit: Which One is Right for You?