Incubator - Springboard For The Arts

Incubator Fiscal Sponsorship Incubator is Springboard for the Arts’ fiscal sponsorship program, allowing artist-led, nonprofit projects to apply for grants and receive tax deductible donations. The Incubator program offers support for projects that are just starting out, those in the process of setting up their own 501(c)(3), time-limited projects, and others who do not have 501(c)(3) status. About Incubator Raising funds is a key component of any successful and sustainable creative project, and there are many avenues that artists can take to fund their work. Grants and individual donations can be a good option, but many of those opportunities require 501(c)3 nonprofit status. Fiscal sponsorship allows for groups to develop their work and foster a community around it before they set up their own 501(c)(3) nonprofit corporation. By establishing a fiscal sponsorship through Springboard’s Incubator, artist-led projects can solicit funds and Springboard will re-grant those funds back to the project to cover their expenses. Fiscal sponsorship is limited to artist-led, nonprofit purpose projects in Minnesota that fit into Springboard’s overall mission. It is free to apply to the Incubator program, with a sliding scale annual fee of $60-120 once accepted, and a 7% fee on all funds received and held by Springboard. The Incubator program offers support for projects and organizations in development, helping to draft mission statements, create project budgets, and promote events. Our Incubator supports close to 200 artist-led projects annually, holding $1,400,000.00 in trust for artists and their work. This investment in infrastructure is an important way that we increase more equitable access to resources and support vibrant creative economies. Header Image Description: artists participants of Springboard events in Saint Paul and Fergus Falls, MN. Photos by Ne-Dah-Ness Green, Destiny Roberts, and Thaiphy Phan-Quang. Frequently Asked Questions What is a fiscal sponsor? A fiscal sponsor is an organization that agrees to accept, and be responsible for, tax-deductible contributions and charitable gifts on behalf of a project that does not have its own tax exemption. Using a fiscal sponsor, a non-exempt individual, project, event, or organization can take advantage of a lot of the benefits of a tax exempt nonprofit organization. What are fiscal sponsorships for and what do fiscal sponsors do? Fiscal Sponsorship is a good solution for organizations (or certain individual projects or events) that only want to do a few small projects over a specified period of time, those who don’t have the time or staff for a lot of organizational administration, or those who need to be able to receive tax-deductible donations while they wait for 501(c)(3) nonprofit status approval from the IRS. A fiscal sponsor: Accepts and safeguards charitable donations on behalf of a project Takes on legal liability for those funds Creates and maintains some accounting records for the project Qualifies the project for some grants and funding that would otherwise be inaccessible Brings experience to the project and may provide such additional aids such as administrative services and/or strategic planning assistance Legally, any existing tax exempt nonprofit organization can act as a fiscal sponsor (including a church or library) but, because of the legal complexity and administration required, not all non profits will do so. If you’re looking for a fiscal sponsor, it’s best to partner with an organization with which you have a good relationship, and/or one that has an existing fiscal sponsorship program. Who is eligible for Springboard’s Fiscal Sponsorship program? Springboard’s program is designed for artist-led groups and projects. Our sponsored projects must have a nonprofit purpose, and the arts product or process must be based in Minnesota. A “nonprofit purpose” means that the organization or project’s mission comes before any individual’s advancement or profit motive. That mission must also be in service of some aspect of the “public good.” Springboard can sponsor organizations that are registered as sole proprietorships, nonprofit corporations, or single-member LLCs that are non-profit in purpose and meet all other eligibility requirements. Springboard cannot manage funds meant for for-profit purposes and can only enter into a fiscal sponsorship agreement with a for-profit corporation (S and C corps) or S, C, or P classification LLCs to support a nonprofit project that is distinct from their standard for-profit activities. Is the program free? Sponsoring organizations nearly always charge fees to cover administration costs. It’s free to apply to Incubator, but programs that are admitted into the program are charged an annual fee on a sliding scale of $60.00 -$120.00, and 7% of any funds that are deposited with us. We also charge rush fees if we need to accommodate requests for materials on short notice. Springboard offers fiscal sponsorship because it is an important part of our non-profit mission; the fees do not cover the full cost of the program’s costs. What are my tax responsibilities under fiscal sponsorship with Springboard? All of Springboard’s fiscally sponsored projects and organizations are self-managed, which means that they are responsible for filing their own tax return. If your project is a sole proprietorship, single-member LLC, or unincorporated association, you will need to account for your project on your personal tax return(s). This mean you will need to: Fill out a 1099-MISC form for any individual(s) you pay a total of $600 or more during the calendar year. Claim all income from Springboard on your tax return and deduct project expenses by filling out a Schedule C. If you are a corporation in Minnesota that has yet to file their application for 501(c)(3) or is waiting on the IRS as a sole proprietor, then you may need to complete a 990, depending on your budget size. Consult a tax professional for more inf