Fiscal Sponsorship Model is on a Tear

November 19, 2010


When the West Chester Food Cupboard started up last year to provide food to needy families in Chester County, demand for its services was high and growing rapidly. Within a year, demand was up 50 percent and the nonprofit was feeding more than 400 households and 1,300 people each month.

The startup, run entirely by volunteers, could have been swamped in administrative details had it not been partnered with the Urban Affairs Coalition.

The UAC is a Philadelphia organization that provides what it calls "fiscal sponsorship" to nonprofits working on urban problems. It changed its name from the Greater Philadelphia Urban Affairs Coalition in September.

Nonprofits that establish themselves under its umbrella get 501(c)(3) legal and tax status. The UAC pools the assets (roughly $35 million) of the more than 80 program partners it has under contract and serves as their legal employer, handling human resource issues ranging from administering payroll to helping to recruit staff.

UAC also handles the day-to-day administrative and financial end of partners' operations, including preparing required financial reports, purchasing and bill payment and negotiation and management of contracts and subcontracts.

Establishing under UAC saved the West Chester Food Cupboard the cost and time of incorporating and more important, provided ongoing financial controls, information and a strong third-party backing, Advisory Board Chairman Ed Breiner said. The food pantry doesn't have to worry about doing the books, keeping up with changing regulations or training staff.

UAC's services attract organizations at all levels, President and CEO Sharmain Matlock-Turner said. UAC's program partners range from everything from homeless prevention and cultural organizations to community development entities and serve approximately 85,000 people annually in communities.

"Some people come in as a startup, some people come in to go from small to mid-size, some people come in at a more mature level," Matlock-Turner said.

The number of partners has grown from about 20 a dozen years ago to more than 80 today, primarily by word-of-mouth, Matlock-Turner said.

Town Watch Integrated Services has been a partner of the coalition since its founding in 1981, Executive Director Anthony Murphy said.

"It allows me to focus more on what I need to do in the community, how to improve our training and how to get more people involved in the town watch effort," Murphy said of the organization, which trains and equips citizens to keep communities safe.

Black Alliance for Educational Options has likewise been able to bring more resources to the table for the low-income parents it serves through UAC program partners, President and CEO Darlene Callands said. The nonprofit's relationship with UAC has also brought it access to capacity-building courses, technical assistance and financial stability, Callands said.

"The majority of my budget are state and city grants and there are always timing issues with grants; one of the huge benefits is I will be able to pay my staff," Callands said. "If this organization was totally independent under our 501(c)(3), I would have to find a creative way for my staff to get paid."

UAC has also benefited from its nonprofits by being able to collaborate with partners to go after funding, such as an $11.8 million federal grant awarded in September. The grant will be used to provide broadband Internet access, computers and training to thousands in underserved communities.

"The [grantmakers] clearly focused in on their missions and network," Matlock-Turner said of the group of public and private entities awarded funding. "That gave us a leg up with the grant; we definitely believe that was a competitive advantage for us."

The West Chester Food Cupboard was UAC's first fiscal sponsorship outside of Philadelphia and UAC is looking to support more, Matlock-Turner said.

UAC is also exploring how to extend its fiscal sponsorship to other states, and ideas for other models, like offering à la carte services such as accounting.

"I think there's a lot of opportunity to grow and we are focused on that," said Chief Financial Officer Keith L. Davidson.



Athena Merritt
Philadelphia Business Journal