Launching, cutting overhead or giving back? The structure already exists.
Three things we learned this fall about who needs a fiscal sponsor, when to consider one, and why that moment may come sooner than they think.
Fiscal sponsorship isn't new. An established nonprofit receives tax-deductible donations for an approved charitable project and provides financial oversight and administrative support, so the project can get started without its own 501(c)(3) status. But this fall, three very different conversations kept leading us to the same place. Here's what stood out.
This month we ran a small Google Ads test in the Philadelphia area. We expected people to search for "fiscal sponsorship." Almost no one did. Nearly every search that showed our ads was a version of one question: how do I start a nonprofit?
People typed "how do you start a nonprofit," "how to apply for a 501c3" and, in the search that turned into a booked meeting, "how to start a transitional housing program with no money."
That last search says it all. The people who need a fiscal sponsor most often don't know the term yet. They have a program in mind, a community that needs it and very little money for legal fees, filing costs or months of waiting on an IRS determination letter.
So we're changing how we talk about it. Fiscal sponsorship can be the answer to "how do I start?" Our message is simple: start your program sooner. You don't need your own 501(c)(3) to begin raising charitable funds through a fiscal sponsor. And if you want your own nonprofit later, many sponsored projects make that move and take their programs and donors with them.
The trend runs the other way, too, and it’s not limited to small organizations. In December 2025, Prince Harry and Meghan Markle announced that their Archewell Foundation was becoming Archewell Philanthropies and shifting to a fiscal sponsorship model while keeping its tax-exempt status. Some organizations that already hold 501(c)(3) status are deciding their back office costs more than it returns.
Under a fiscal sponsorship, much of that work moves to the sponsor. The National Network of Fiscal Sponsors describes how an existing 501(c)(3) can “hibernate” while its operations run under a fiscal sponsor, calling it “a more efficient back office.” The X.Org Foundation went a step further in 2016: it joined Software in the Public Interest (SPI) as a sponsored project and filed to dissolve its separate nonprofit corporation. Its treasurer’s report credits the move with far more streamlined finances, significantly reduced legal costs, and lifting the “big time burden” of tax filing and account management.
For a small organization, that can mean fewer administrative hires, smaller tax-prep bills and more of every dollar going to programs. Same mission, less overhead.
Some of our most interesting conversations this fall were with business owners. A for-profit company can't accept tax-deductible donations, and most foundations won't fund them directly. A fiscally sponsored project can do both. So an owner who wants to start a youth program, a food pantry or a community clinic can do it alongside the business, without turning the company into a charity.
The key is keeping the charitable purpose separate from the business. If the company provides services to the project, clear safeguards are essential:
Done right, the charitable work can be up and running in weeks instead of a year.
Whether you're starting a program with no money, carrying a back office that's draining your budget or running a business that wants to do more good, the path is often shorter than it looks.
They change the world. We make it tax-deductible. If one of these sounds like you, let's talk.
About the Author
Shelly St John is a senior nonprofit brand strategist for Group 36 and nonprofits nationwide. Over 20 years, her companies The Auction Divas and Primary Objective have helped charities raise more than $148 million. Contact Shelly at shellys@group36.org.
