You have a unique vision and want to do something meaningful for your community.
Now what?
Well, that depends on your vision and the work you want to accomplish.
Once upon a time, if you wanted to pool a sum of money and make grants to existing nonprofits you would have set up a Private Foundation.
However, today, this can be accomplished with much greater ease and efficiency by setting up a donor-advised fund which allows you to create your own foundation-like entity for as little as a one-percent annual administration fee.
In fact, donor-advised funds have quickly become the preferred charitable vehicle for philanthropists large and small with donor-advised funds now representing more than $100 billion in charitable assets and distributing over $20 billion in charitable support annually.
But what if you want to do more than just make grants?
What if you want to DO Something?
What if you want to raise public support to start a meaningful program or project, inspire a movement, galvanize others around a cause, produce a documentary, launch a socially beneficial media campaign, provide direct services to those in need, or bring disadvantaged teens together for a sports clinic that combines mentorship and life skills training?
Well, once upon a time, you would have established your own nonprofit corporation, hired an attorney to fill out the extensive legal paperwork, filed with the IRS for 501(c)(3) tax exemption, amassed a war-chest of resources to cover your overhead, and then finally gone to work.
However just as private foundations have given way to the more efficient and lower barrier-to-entry donor-advised fund, the formation of stand-alone nonprofit corporations has given way to a more cost-effective and efficient nonprofit 'do-something' structure: Fiscal Sponsorship.
OK, you say that sounds like a pretty complicated name for something that promises to be more streamlined, cost effective, and efficient – so let me break it down for you.
Just as community foundations now offer donors the opportunity to create a foundation-like structure called a donor-advised fund, professional nonprofit umbrella organizations offer ‘do-something philanthropists’ with the opportunity to create nonprofit-like structures under the auspices of their umbrella organizations.
The umbrella nonprofit will usually manage the oversight, governance, accounting, and back-office functions such as administration, legal, tax, and financial reporting for the projects that are under their purview, while you are free to focus on accomplishing what’s really important - your vision!
And all at a fraction of the cost.
It will be important to really understand your goals, needs, and areas of focus prior to choosing the most appropriate professional umbrella nonprofit for your project and each has its own specific areas of expertise, service models, and cost structures. But if you’re a ‘do-something philanthropist’ this structure might be just what you have been looking for to launch your vision quickly and effectively. So what are you waiting for?