Does my documentary need Fiscal Sponsorship?

Maybe… but I guess it is good to know exactly what it is before you agree to give away a percentage of your funds raised to do it.

One company that offers this program explains it this way…

Fiscal Sponsorship is a financial and legal system by which a legally recognized 501(c)(3) public charity (such as Fractured Atlas) provides limited financial and legal oversight for a project initiated independently by an artist. Once sponsored in this way, the project is eligible to solicit and receive grants and tax-deductible contributions that are normally available only to 501(c)(3) organizations.

Great, just what you needed to jump start your film into fundraising mode. It is a nightmare for an individual company or film to get their 501(c)(3) status which is why companies such as Fractured Atlas, or the company I have the privilege of working for, the IDA, offer this to “artists”.

So here is how it works. You find an organization that matches your needs and fill out an application. Most will have an application fee that goes with that.  Then, once you are in start raising funds. Now know that these companies are not out there doing this for free. They will take between 5% and 9% of the money you raise to do this.

Then, if you are collecting money through paypal or facebook causes you must know that there is an additional fee that will come off of that - somewhere between 3% and 4%. So right off the bat, you can write off about 9% of your raised money.

Don’t let these fees discourage you. If you are with the right fiscal sponsorship program, you will have many other benefits that go with that.Your money will be collected by the sponsor and redistributed to you once the fees have been withdrawn. You, the filmmaker, cannot collect the monies yourself or you are putting yourself in high IRS risk. These programs are carefully monitored, therefore, you must be very accurate in your books. You are still wholly responsible for your film.

Grandmom can’t write you a check for $10,000 for your “film” so she may receive the tax breaks and then no film be done, if you know what I mean.

So do your research and know what non profit you are getting involved with.  And start raising the funds. Know the money is out there and many films are benefiting from this kind of relationship.

Now… the question is… can you be a fiscally sponsored film that is collecting other monies for profit?

Stay tuned.