Fiscal Agency Against Fiscal Sponsorships
There are certain things that one needs to know about third party groups or individual when dealing with grants and sponsorships. One cannot be too careful in who handles ones finances, you providing the grant or you receiving the grant, it would be negligent of you to just release funds to anyone or allow someone else receive funds for you. It would be advisable to have documentation of all transactions.
In dealing with grants and sponsorships, one might hear the term fiscal agency or fiscal sponsors. What do they actually mean? You might ask whom should I be dealing with? Well let us first try to define these terms as simple as possible.
To make it easy to understand the fiscal agent is an individual who represents or acts in behalf of someone or a group. They’re actions are controlled and directed. The term often used to the one giving direction or in control of the agent is the principal.
The principal usually is liable for any actions done by the agent since technically the agent action should be in the principal’s directive.
Now being charitable is a noble endeavor. Charitable institutions and grant makers have different reasons to provide grants and charities, from tax exemption to legal requirements. Whatever the reason for the charity, it is still wise to know whom you are being charitable to. You would want to know that the funds you are giving are being put to good use or the program is benefiting the intended group or individuals.
The problem with dealing with fiscal agency or agents is that there is the possibility of the funds being misused and the agent is not held liable since usually there are no documentations. If anything goes wrong with the program, the agent is usually bypassed and it is assumed that the grant is given directly to the principal. The agent does not become liable.
And in cases where the principal misuses the funds, the agent can deny any responsibility and decline any refund that the grant maker demands. There is perhaps a greater risk of fraud though I am not saying that all fiscal agency or agents are fraudulent. One just needs to be careful, making sure you are dealing with legitimate and trustworthy groups or individuals.
In the case of a fiscal sponsorship, the grant maker has the options of being the fiscal sponsorship or a third party may be involved as the fiscal sponsor. Documentation of the roles and responsibilities of the fiscal sponsors and the grantees and grant makers are usually outlined and agreed upon. Fiscal sponsors may ask to be paid for their services and the amount is usually indicated in the agreement at the start of the project.
If you look at it closely, liability and documentation is the difference between fiscal agency and fiscal sponsorship. It is more reliable to deal with fiscal sponsorships. More or less liability is shared.
Fiscal sponsorship allows mutual benefits to both parties allowing smooth functions on the sides of the two parties involved. With clear roles and functions, the rights and obligations of both are served.
The grant makers are sure that the funds are being put to what it has been intended for specially if the grant maker is also the fiscal sponsor since they will be the administrative body in control of the actual distribution of the funds for the project.
In dealing with grants and sponsorships, one might hear the term fiscal agency or fiscal sponsors. What do they actually mean? You might ask whom should I be dealing with? Well let us first try to define these terms as simple as possible.
To make it easy to understand the fiscal agent is an individual who represents or acts in behalf of someone or a group. They’re actions are controlled and directed. The term often used to the one giving direction or in control of the agent is the principal.
The principal usually is liable for any actions done by the agent since technically the agent action should be in the principal’s directive.
Now being charitable is a noble endeavor. Charitable institutions and grant makers have different reasons to provide grants and charities, from tax exemption to legal requirements. Whatever the reason for the charity, it is still wise to know whom you are being charitable to. You would want to know that the funds you are giving are being put to good use or the program is benefiting the intended group or individuals.
The problem with dealing with fiscal agency or agents is that there is the possibility of the funds being misused and the agent is not held liable since usually there are no documentations. If anything goes wrong with the program, the agent is usually bypassed and it is assumed that the grant is given directly to the principal. The agent does not become liable.
And in cases where the principal misuses the funds, the agent can deny any responsibility and decline any refund that the grant maker demands. There is perhaps a greater risk of fraud though I am not saying that all fiscal agency or agents are fraudulent. One just needs to be careful, making sure you are dealing with legitimate and trustworthy groups or individuals.
In the case of a fiscal sponsorship, the grant maker has the options of being the fiscal sponsorship or a third party may be involved as the fiscal sponsor. Documentation of the roles and responsibilities of the fiscal sponsors and the grantees and grant makers are usually outlined and agreed upon. Fiscal sponsors may ask to be paid for their services and the amount is usually indicated in the agreement at the start of the project.
If you look at it closely, liability and documentation is the difference between fiscal agency and fiscal sponsorship. It is more reliable to deal with fiscal sponsorships. More or less liability is shared.
Fiscal sponsorship allows mutual benefits to both parties allowing smooth functions on the sides of the two parties involved. With clear roles and functions, the rights and obligations of both are served.
The grant makers are sure that the funds are being put to what it has been intended for specially if the grant maker is also the fiscal sponsor since they will be the administrative body in control of the actual distribution of the funds for the project.