Why Fiscal Sponsorships Might Be Your Secret Weapon to Winning More Grants

You Might Be Missing Out on the Keys to the Castle

So, you’ve got a high-impact project that could change lives…maybe a public health tool, a new screening pilot, or a community-driven research idea. You’ve found potential funders whose mission aligns with yours. But there’s a problem:

You’re not a nonprofit.
OR you are a nonprofit but brand new, with no IRS letter or previous grants awarded.
OR your big institution moves... very slowly.

And just like that, the funding window starts to close.

Setting up a 501(c)(3) can take anywhere from 3 months to a year, depending on the complexity of your application and IRS backlogs¹. Meanwhile, grants and donors often require you to have that status before a single dollar can move. And even if you are a nonprofit, it takes about 2 years and 4 months to secure your first grant².

That’s where fiscal sponsorship comes in. A sponsor lets you tap into grant funding, accept tax-deductible donations, and launch public-good projects without forming your own nonprofit.

What is a Fiscal Sponsorship?

Think of fiscal sponsorship like this:

You’ve got a project that serves the public good. They’ve got the nonprofit status and infrastructure to support it. Together, you get to operate like a nonprofit without building one from the ground up.

In practice, a nonprofit sponsor agrees to house your project under its umbrella. That means you can access grant funding, receive donations, and meet eligibility requirements you’d otherwise miss. The sponsor handles administration, compliance, and reporting so you can focus on the work itself.

It’s not a loophole. It’s a widely accepted model used across public health, biomedical research, and social innovation. While fiscal sponsorship is most established in the U.S., similar models exist globally. They’re often used in regions where starting a nonprofit is slow, costly, or legally complex.

Think of it like this: A fiscal sponsor is like a fully furnished suite. You move in, you’re covered, and you can invite guests over, no need to build and furnish a house just to get started.

Why For-Profit Ventures Might Care

Fiscal sponsorship lets health startups access nonprofit funding quickly and credibly, without changing their business structure.

If you’re a health startup or for-profit business, you know that there are limited grant options for you. But if you are doing public-good work, a fiscal sponsorship can grant you access to more funding opportunities. Think foundation grants, donor-advised funds, or government contracts that require a nonprofit recipient.

It’s also a way to build trust. Funders and community groups are often more comfortable partnering through a known nonprofit, especially when the work touches sensitive areas like health access or equity.

And, it’s faster than the alternatives. You can apply for funding, run a pilot, and collect real-world data without having to restructure your business or spin off a new entity.

Why Nonprofits Should Pay Attention

Fiscal sponsorships help new nonprofits launch faster and give established ones a low-risk way to grow, partner, and generate flexible revenue.

New nonprofits:
Skip the paperwork and start doing the work. Fiscal sponsorship lets you focus on mission, not on legal filings and audits. You can build your reputation, test your model, and grow your network while your sponsor handles the back-office side.

Established nonprofits:
Use fiscal sponsorship to incubate pilot programs, partner with grassroots groups, or explore new initiatives without overloading your team. Many sponsors charge an admin fee (typically 5 to 15 percent), which can create steady, flexible revenue for unrestricted use. Plus, because sponsored projects remain legally distinct, there’s less risk to your core programs. You can test and learn without betting the house.

Case Studies

A Startup, a Mission, and a Grant

A digital health company builds an app to help patients manage chronic conditions. A foundation wants to fund a pilot, but only for nonprofits. The company partners with a nonprofit sponsor, receives the grant, and runs the pilot. Everyone wins.

A Research Team, a Bold Idea, and No Time to Wait

Biomedical scientists want to launch a mobile screening program in rural areas. Their institution is slow to move. A fiscal sponsor helps them apply for funding and launch quickly.

A Big Nonprofit Incubates New Ideas

A national nonprofit receives too many good ideas to manage. Instead of turning them away, it offers fiscal sponsorship. The nonprofit grows its impact and earns admin revenue while keeping operations lean.

Things to Watch Out For

Fiscal sponsorship is powerful but it comes with responsibilities.

• Fees: Most sponsors charge 5 to 15 percent of all funds raised
• Oversight: You’ll need to follow their policies and submit reports
• Fit: Look for alignment in mission and management style
• Legal clarity: Always get a written agreement before starting

A good sponsor will act like a trusted partner, not just a bank account.

Tips on How to Find (or Become) a Fiscal Sponsor

Finding a sponsor:
Start with aligned nonprofits in your field. A sponsor needs to be able to clearly show that your project fits within their charitable purpose.

When evaluating a potential sponsor, look for one that has experience managing grants or acting as a fiscal sponsor. You’ll want to understand their terms, including how they handle fees, fund management, timelines, and reporting. Ask whether they have the infrastructure to support your needs, like accounting and compliance. Pay attention to how responsive and transparent they are when you communicate. And most importantly, make sure the organization is financially stable and has strong governance in place because your funding will be flowing through their systems.

To get started, you can use the Fiscal Sponsor Directory at fiscalsponsordirectory.org to search by topic or region. Be ready with a short, clear proposal.

Becoming a sponsor:
If your nonprofit often holds funds for outside projects, you’re already doing it informally. Formalizing a fiscal sponsorship program can bring in revenue and deepen partnerships. Just make sure you have legal and financial systems in place before scaling.

A Fiscal Sponsorship is a Smart Shortcut for Science with Impact

Fiscal sponsorship is one of those rare things that’s fast, flexible, and mission-aligned. If you’ve got a health-focused idea that’s ready to go but stuck waiting for structure, it might be time to move forward by establishing a fiscal sponsorship.

You don’t need to be a large nonprofit to start making an impact and receive grant funding.

You just need the right partner.

Need support with grant strategy or fiscal sponsorship?

I help health and health-focused teams plan, fund, and launch projects that get results. Reach out to discuss how we can work together to expand your impact.