Below are some frequently asked questions about the fiscal sponsorship of a program at United Charitable Programs. If you have additional questions, please use the form here to Contact Us.
1. What is fiscal sponsorship at UCP?
Fiscal sponsorship is an efficient and cost-effective way to begin new active charitable programs, community initiatives, and for incubating grassroots social movements. UCP is a nonprofit fiscal sponsor that enables the growth of these active charitable programs through the movement of resources from grantors, funders, and donors to these programs that share UCP’s mission. UCP provides the nonprofit status and legal framework to our programs.
2. What is the relationship between UCP and its programs?
UCP sponsors approximately 700 active charitable programs around the country (As of January 1st, 2011, UCP assumed fiscal sponsorship of the charitable programs of Congressional District Programs). The programs at UCP are not independent entities or separate organizations—these programs are UCP. Because they are an integral part of UCP and not separate legal entities, these programs are able to receive charitable donations and grants that are available only to tax-exempt organizations. UCP is the entity that is legally responsible for all UCP programs and activities.
3. Are UCP programs nonprofits?
Yes, but only under our sponsorship. UCP is a 501(c)(3) tax-exempt charity. Every year, UCP files a Form 990 with the IRS, which consolidates and reports on all of the activities of all of our programs. UCP oversees all programs to ensure each abides by strict federal regulations governing nonprofits, such as limits on lobbying and political activities, as well as UCP’s internal policies and procedures, including State Fundraising and Solicitation Guidelines, a Whistleblower Policy, Conflict of Interest and Disclosure Policies, as well as other compliance-related requirements. Each program must abide by the UCP Board of Directors, who is responsible for all legal, taxation, and regulatory issues for the programs. Most UCP programs also have their own Advisory Boards, which are designated caretakers of their program’s mission. Although this Advisory Board has no legal responsibilities, they are asked to be responsible for program’s strategic planning, program and budgetary oversight, fundraising, outreach, and assistance to and review of the Program Manager.
4. What is a 501(c)(3) nonprofit organization?
The term 501(c) refers to a subsection of the United States Internal Revenue Code that lists the types of nonprofit organizations exempt from certain federal taxes. Section 501(c)(3) is one of the tax law provisions granting exemption from the federal income tax to nonprofit organizations that exist for religious, charitable, scientific, literary, or educational purposes, among others. See the IRS’s website for more information on the designation of charitable organizations. UCP has been a designated 501(c)(3) nonprofit organization since 2005.
5. Why choose UCP for your charitable program’s fiscal sponsorship?
Establishing an independent 501(c)(3) nonprofit charity is expensive. If you hire an attorney to assist you with the nonprofit incorporation and registration paperwork, plus hire the appropriate staff, bookkeepers, and financial auditors, purchase computers and software, the entire process could end up costing thousands and thousands of dollars!
Having a charitable program become fiscally sponsored is extremely cost-effective, especially for grassroots projects, programs run entirely by volunteers, testing new or community-based approaches to affect social problems, or working within areas where funding is scarce. Today, most funding for nonprofits is on the decline, which makes it vital to emerging organizations not to compete with other organizations for limited funds. Fiscal sponsorship is an efficient, economic way to reduce the cost of running an organization, while maintaining the effectiveness of the program’s purpose.
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