Metro DNA chose neutral fiscal sponsorship. Why?

As an emerging organization, Metro DNA had a decision to make: become a new independent 501(c)(3) non-profit or partner with a  non-profit already in existence in a “fiscal sponsorship” relationship. Both routes would have allowed Metro DNA to achieve tax-exempt status and to receive funding through donations, grants, and partner dues … so what’s the difference here and why does it matter to Metro DNA and the nonprofit sector in Colorado?

Fiscal sponsorship helps organizations like Metro DNA focus efforts on goals and projects from the get-go instead of spending the time, money, and energy needed to become and maintain a 501(c)(3) nonprofit. Metro DNA stated in its Strategic Plan that choosing fiscal sponsorship will “allow Metro DNA to direct its limited staff capacity to building the organization’s infrastructure and implementing priority programming” (Metro DNA’s Three Year Strategic Business Plan). For a monthly Project Fee, Metro DNA’s fiscal sponsor, the Colorado Nonprofit Development Center (CNDC), provides a needed administrative backbone, as well as financial and legal accountability to the projects it supports, leaving Metro DNA more resources to get down to the important business of taking action on equitable nature-based solutions.

Melinda Higgs, the president and CEO of the CNDC put it this way: “We view it [fiscal sponsorship] as a partnership. We each get to do what we’re good at and leverage our core competencies. For them [the programs supported by the CNDC], it’s doing the program, making connections in the community, and raising money. For us, it’s providing infrastructure, policies, and capacity-building. It’s a much smarter use of charitable resources” (Hung, 2017).

While different pathways to funding can serve organizations in varying ways, Metro DNA’s ability to kick off coalition building, begin focusing on equitable access to nature, and jump start promoting healthy people, communities, and natural places can be attributed, in part, to the benefits of our fiscal sponsorship.

Why does Metro DNA see possibility in neutral fiscal sponsorship more broadly? 

The possibilities of fiscal sponsorship go beyond Metro DNA. The structure of fiscal sponsorship has potential to enable greater equity surrounding who can access funding. According to Rachel Burrows, the managing director of the Movement Strategy Center, a 501(c)(3) non-profit that serves as a fiscal sponsor through their Innovation Center, “Philanthropy has habits and assumptions about smaller, grassroots, front line, Black- and Brown-led work. Fiscal sponsorship helps interrupt that inequality” (Hung, 2017). 

While the ability for fiscal sponsorship to interrupt inequality relies on lots of factors, like which organizations or groups are accepted for sponsorship, organizations like the CNDC have the opportunity to “think about how to support organizations that serve in areas where…access to services is lacking” and ask “how can those groups get more support?” (Hung, 2017). Fiscal sponsors also have the opportunity to go directly to organizations they sponsor to ask what support the organizations and the communities they serve need.

Further, organizations or movements that choose fiscal sponsorship might be more able to be experimental with projects and goals (Hung, 2017). The increased flexibility surrounding what and who receives funding could enable groups and grassroots movements with bold ideas to have access to private and governmental funding without having to deal with the burden of navigating legal systems and governmental requirements on their own. 

Why Colorado Nonprofit Development Center (CNDC)?

Metro DNA sought a fiscal sponsor that would provide support from a “neutral platform.” Neutrality was and is important to Metro DNA because it allows for greater possibility for bold ideas and programs that could fit both the goal of the fiscal sponsor and the vision of Metro DNA.

The CNDC’s mission statement was broad enough for Metro DNA to want in. The goal of CNDC is to: “maximize the impact of nonprofits through fiscal sponsorship to enable all Colorado communities to thrive.” Since joining the CNDC team, Metro DNA is able to network with dozens of other projects, three of whom we have been able to work with directly: SouthWest Denver Coalition, Denver Park Trust, and the Colorado Open Space Alliance. With all these organizations under one umbrella, partnering on projects like Safe Summer Kick Off on Get Outdoors Day is easy and well-supported. 

Alongside Metro DNA, the CNDC is also engaging and investing in equity work through participation in the Chinook Fund Giving Project. The Chinook Fund Giving Project is a process that involves “work(ing) together to deepen… understanding of social justice principles in order to support grassroots organizations that build power for social change in Colorado” (How does the Giving Project work?, Chinook Fund). The process includes workshops about societal power structures, a commitment to fundraising, and training on the Chinook Fund’s democratic grant making process. 

Metro DNA is proud to be fiscally sponsored by the CNDC!

Interested in learning even more about fiscal sponsorship? Check out Priscilla Hung’s 2017 article “Is Fiscal Sponsorship Right for You?,” published in the Grassroots Fundraising Journal and posted to the CNDC’s Resources for Fiscal Sponsorship page.

Metro DNA chose neutral fiscal sponsorship. Why?