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Grant Policy for Sponsees

Additional Policies for Sponsees

If you are a fiscal sponsee of Fiscal Sponsorship Allies, please review our policies below. These include our policy for applying for grants, and our policy on sponsees providing scholarships or funds to individuals.

Grant Policy

Fiscal Sponsorship Allies, Inc. (“FSA”) is committed to fulfilling its mission in providing the best fiscal sponsorship services at affordable rates to those engaging in charitable work for the larger community. Sponsees may find opportunities to solicit grant awards and may want to know how to proceed in order to optimize its chances at submitting a successful application while remaining compliant with FSA’s policies. This section, “Applying to Grants” should help clarify such questions.

  1. Charitable Program: Sponsees are required to inform FSA of any grant awards that they would like to apply for and receive approval from FSA prior to grant submission. Grant applications must be submitted by the Sponsee to FSA at least 7 days in advance through the Grant Eligibility Form which can be found at https://fiscalsponsorshipallies.org/grant-apply/.  If it is not submitted at least 7 days prior to the deadline, FSA has the right to decline review and submission or Sponsee will pay FSA hourly for grant review. FSA will review the application for eligibility and compliance. If the grant application includes an online portal, Sponsee will send a collaboration request to FSA as part of the grant review process whenever possible, including login information. FSA will add any information the grant provider requests about the fiscal sponsorship. Once approved, a copy of the application (as submitted to the grant provider) should be sent to FSA via email.
  2. Grant Awards: If awarded, the grantor will send the grant agreement to FSA signatory for signing. Signing and reviewing grant awards are included in the Core Services Fee and will not incur additional charges.
  3. Sponsee Reporting Requirements: Some grant foundations require grant reports to be signed and sent by FSA. When such is the case, the Sponsee is obligated to prepare the appropriate narrative and financial reports and send them to FSA for review no later than one week prior to the deadline for submission to the grant foundation. Failure to supply these reports could result in the grant foundation terminating the grant Agreement or requesting a return of the grant funds. 
  4. Sponsor Materials for Grants: Sponsor can supply materials necessary for grant applications, specifically those that are applied for in FSA’s name. Materials include, but are not limited to: determination letter, W-9, audited financial statements, Articles of Incorporation, 990, and annual budget. FSA will submit them directly to the grant-providing foundation(s). Sponsee is expected to use the native Grant/Budget tools within the Mazlo platform to provide accurate grant reporting.
  5. Late Grant Reports: If a Sponsee fails to submit a grant report to FSA by the due date, or otherwise causes FSA to miss a deadline to a funder, the Sponsee will be placed on hold and shall not have access to funds held in Mazlo until the hold is resolved. 
  6. Sponsee/Sponsor/Funder Communications: Sponsees are expected to include FSA on all communications with grant funders in order to preserve visibility and transparency. Failure to do so creates unnecessary tension and confusion for all parties involved, and circumvents FSA and its obligation to retain sole discretion and control over grant funds.
  7. Federal Grants: Due to the administrative burden of federal grants, FSA does not facilitate them in any circumstances at this time. We may consider city, county, or state-issued grants that do not require a SAM.gov account.
  8. Deviations from Grant Policy: Questions about how to answer certain fields on a grant application will be billed hourly. FSA does not provide fundraising consulting. FSA will provide grant provider with information as requested about the fiscal sponsorship relationship. Sponsees who submit grant applications for review with fewer than 7 days before the deadline will be billed hourly for grant reviews.

 

 

Grants to Individuals and Scholarships

Sponsees sometimes carry out charitable programs that pay money to individuals rather than to organizations — hardship and emergency assistance, stipends, awards, and scholarships. FSA can support those programs under the following guidelines:

  1. Charitable Purpose and FSA’s Discretion: Every award to an individual must further one of the Sponsee’s charitable programs as approved for fiscal sponsorship. FSA is the grantor of record and retains sole discretion and control over the funds, including the right to decline any award or to discontinue a program at any time.
  2. Program Approval: A Sponsee must obtain FSA’s written approval of an individual grant or scholarship program before soliciting applications or announcing any award. The request must describe the charitable purpose, the eligibility criteria, the selection process, who will make the selection, the amount or range of awards, how funds will be paid, and how the Sponsee will document eligibility and use. FSA approves programs and criteria; FSA does not select recipients. Any award of more than $15,000 to a single recipient in a calendar year requires FSA’s separate written approval of that award before it is made.
  3. Eligibility Criteria: Criteria must be in writing, objective, related to the charitable purpose, and applied consistently to every applicant. Criteria may not be drawn so narrowly that only one person, or only persons already identified, can qualify.
    1. Grants to Individuals: Recipients of individual grants must be selected from a charitable class: a group large enough or indefinite enough that supporting it benefits the community rather than particular individuals. A group that is closed or fixed, or whose members can all be identified in advance, is unlikely to qualify, and FSA will not approve a program built on one without further review. Where eligibility rests on need or distress, the Sponsee must assess and document each recipient’s need rather than assume it.
    2. Scholarships: Scholarship criteria may be broader than the charitable class standard above, because advancing education is itself a charitable purpose and financial need is not required. Scholarship criteria must still be in writing, objective, and consistently applied, and the pool of eligible applicants must remain open rather than limited to persons identified in advance.
  4. Prohibited Recipients and Conflicts: No award may be made to a director, officer, or employee of FSA or of the Sponsee; to a member of the family of any such person; to any person who selected or recommended the recipient; or to any person designated by a donor. Anyone with a personal or financial relationship to an applicant must recuse from the selection decision, and the recusal must be documented.
  5. Donor-Designated Individuals: FSA cannot accept a contribution earmarked for a named individual, and no award may be made to a person a donor designated. A donor may restrict a gift to a program or a purpose; a donor may not choose the recipient. If a Sponsee learns that a donor expects a particular individual to benefit, the Sponsee must tell FSA before the funds are accepted.
  6. Recipient Screening: Sponsee shall not make an award to an individual located outside the United States. Sponsee shall check a recipient against OFAC’s Specially Designated Nationals and Blocked Persons List and retain the result before (a) any award to a recipient whose United States citizenship Sponsee has not confirmed and documented; (b) any award, or series of awards to the same recipient in a calendar year, of $15,000 or more; and (c) any award as to which Sponsee becomes aware of information suggesting a sanctions concern. Screening is performed once per recipient rather than before each payment. Sponsee shall decline an award to any person it knows or has reason to believe is subject to sanctions and shall otherwise exercise reasonable care to avoid awarding funds to any such person. Sponsee shall notify Sponsor before designing any program that contemplates supporting individuals abroad, and any such program is subject to the OFAC compliance requirements of the Fiscal Sponsorship Agreement.
  7. How Awards Are Paid: Wherever possible the Sponsee should pay the expense directly to the school, landlord, utility, medical provider, or other vendor and obtain the invoice or receipt, rather than paying cash or its equivalent to the recipient. Direct payment is FSA’s preferred method because it produces the required documentation described below. All awards must be paid and recorded through the Mazlo platform, using its native grant and budget tools.
  8. Evidence of Eligibility: At the time of each award the Sponsee must obtain and retain evidence sufficient to show that the recipient met the criteria. What is sufficient depends on the criteria, e.g., an application, an enrollment or acceptance letter, income documentation, proof of residency, a written statement of need, third-party verification. Sponsee must also be able to show how the criteria were applied to applicants who were not selected.
  9. Proof of Use: Where funds are paid to an individual rather than directly to a provider, the Sponsee must follow up and affirmatively establish how the funds were used. The Sponsee is responsible for obtaining receipts, invoices, or comparable documentation from the recipient and retaining it in the award file. A recipient’s statement that the funds were used as intended, unsupported by documentation, is not sufficient. Any award for which the Sponsee cannot establish use must be reported to FSA, and FSA may suspend or discontinue the program.
  10. Records to Keep: For each award the Sponsee must keep the recipient’s name and address; the amount and date; the purpose; the criteria then in effect; the evidence of eligibility; the identity of the person or committee that made the selection and any recusals; the application and supporting materials; the payment record; and the documentation of use required above. These records stay with the Sponsee. Records must be retained for at least seven years after the final payment.
  11. Producing Records to FSA on Request: FSA may request any of the foregoing at any time and for any reason, and the Sponsee must provide it within ten business days. FSA may condition further disbursements on receipt. Failure to produce records places the Sponsee on hold as defined in the Fiscal Sponsorship Agreement.
  12. Tax Matters: FSA does not provide tax advice to Sponsees or to award recipients, and a Sponsee may not provide tax advice either. Recipients must be directed to their own advisors. A scholarship must be a true scholarship under IRS guidelines: it may not be conditioned on the recipient performing services for the Sponsee, for FSA, or for anyone else, and it may not be structured as payment for work. A Sponsee may not promise a recipient any particular tax result.
  13. Deviations from This Policy: Requests to deviate from this section must be made in writing and approved in writing by FSA before any award. FSA will not address questions about how to structure an individual grant or scholarship program, beyond FSA’s review of the criteria, but may refer Sponsee to a third party who can.
  14. Liability and Indemnification: If FSA is subjected to any damages, clawback of funds, penalties, or other negative action of any kind due to a Sponsee’s action or omission in relation to a grant to an individual or a scholarship, then Sponsee shall be liable to FSA under the indemnification terms of the Fiscal Sponsorship Agreement.

OFAC and Sanctions Compliance

Federal law prohibits U.S. persons, including FSA and its Sponsees, from transacting with individuals and organizations the U.S. Treasury Department has designated under its sanctions programs. The prohibition does not depend on intent: a payment to a designated person is a violation whether or not anyone knew. Most of that risk sits in transactions with a foreign connection, which is where this section concentrates. It supplements and does not replace the “Applying to Grants” and “Grants to Individuals and Scholarships” sections.

  1. What OFAC Is: The Office of Foreign Assets Control administers U.S. economic sanctions. It publishes the Specially Designated Nationals and Blocked Persons List (the “SDN List”) and the Consolidated Sanctions List, which together name the people, entities, and vessels U.S. persons generally may not deal with. Both are searchable at no cost through OFAC’s public sanctions list search, which queries them together.
  2. Blocked Persons: A Blocked Person is anyone appearing on either list, any entity owned fifty percent or more by one or more such persons, and anyone else subject to a sanctions program. An entity that meets the fifty percent test is blocked even though it never appears on a list, so searching the name alone will not reveal it. Where a foreign entity is involved, Sponsee must find out who owns it.
  3. The Prohibition: Sponsee may not transact with, or provide funds, goods, or services to, any Blocked Person, and may not approve, finance, or facilitate a transaction by anyone else that Sponsee could not do itself. That restriction reaches funds Sponsee grants to another organization for that organization’s own activities.
  4. When Sponsee Must Screen: Sponsee must check a party against the SDN List and the Consolidated Sanctions List, and keep the result, before (a) any transaction with a person located outside the United States, any transaction in which funds will be transmitted outside the United States, or any transaction with a person Sponsee knows to operate outside the United States or to maintain a foreign address or account; (b) any grant or subgrant to an organization; and (c) any transaction as to which Sponsee becomes aware of information suggesting a sanctions concern. Sponsee must otherwise exercise reasonable care to avoid transacting with a Blocked Person.
  5. How Often: Screening is performed once per party, not before each payment. Sponsee must re-check any party with which it has an ongoing relationship at least annually, and again whenever Sponsee learns something suggesting a concern.
  6. Additional Diligence for Foreign Grants and Larger Engagements: Before a grant or subgrant to a foreign organization or individual, before conducting activities in a foreign country, and before any foreign engagement of $15,000 or more, Sponsee must also obtain and keep, to the extent applicable: the party’s name in English and in the language of origin, together with any acronyms, prior, or alternate names; the jurisdictions where it has a physical presence; information establishing identity and integrity, including jurisdiction of incorporation or formation, organizing documents or equivalent personal identification, the people who formed and operate it, and its operating or work history; addresses, phone numbers, and web addresses for each place of business, employment, or residence; a statement of its principal purpose and a description of its projects; the people and organizations to which it provides or proposes to provide funding, services, or support, so far as reasonably discoverable; any subcontractors it uses; copies of public filings, registry documents, and annual reports; and its sources of income.
  7. Vetting the Foreign Party: For those same transactions, Sponsee must confirm that the countries involved are not covered by a sanctions program, and must exercise heightened care if one applies; search publicly available information for any indication of terrorist activity or financing, and decline the relationship if any such suspicion exists; confirm the party is not a Blocked Person; determine its ownership; obtain the names, nationality, and citizenship of its key employees, board members, and senior management, and confirm none of them appear on the applicable lists; and check any designation lists maintained by the foreign country itself under United Nations Security Council obligations.
  8. Certification: As a condition of any foreign grant or engagement, Sponsee must require the party to certify that it complies with the laws restricting dealings with sanctioned persons, and that it does not deal with or provide any financial benefit to any sanctioned person or to anyone it knows to support terrorism or to have violated a sanctions program.
  9. Sponsee’s Own People: Sponsee must search publicly available information to confirm that none of its own key personnel are suspected of terrorist activity or financing and that none are subject to sanctions. Sponsee may not employ a person as to whom any such suspicion exists.
  10. If There Is a Match: If Sponsee identifies a match or possible match, Sponsee must immediately suspend the transaction, notify FSA, and take no further action as to that person until FSA directs otherwise. Sponsee must not release funds, deliver goods, or continue the relationship while the question is open. FSA will determine what further steps are required, including whether a report to the government is necessary. Sponsee must not contact OFAC or any other authority about the matter without first coordinating with FSA.
  11. Records: Sponsee must keep a full and accurate record of each screening and of each transaction subject to OFAC’s rules for at least five years. Where Sponsee holds blocked property, it must keep records of that property for as long as the property is blocked and for five years after it is unblocked. Records include correspondence, contracts, invoices, ledgers, statements, and electronic communications of every kind. Sponsee must provide these records to FSA on request.
  12. Licenses: Some otherwise prohibited activity is permitted under a general license, which requires no application but does carry conditions and often reporting or recordkeeping obligations. Other activity requires a specific license, which must be applied for in writing and which only the named applicant may use for the stated purpose. Sponsee must notify FSA before relying on a general license or applying for a specific one and must keep the records and make the reports the license requires.
  13. Annual Review: Sponsee must review its sanctions compliance practices at least annually to confirm they still match the risk its activities present and must confirm in writing to FSA that it has done so and that it has no violations to report or must report any it has.
  14. Deviations from This Section: Requests to deviate from this section must be made in writing and approved in writing by FSA before the transaction. Questions about how to apply this section to a particular transaction will be billed hourly.
  15. Liability and Indemnification: If FSA is subjected to any damages, penalties, claw back of funds, or other negative action of any kind due to a Sponsee’s action or omission in relation to sanctions compliance, then Sponsee shall be liable to FSA under the indemnification terms of the Fiscal Sponsorship Agreement.