Documentation of our activities, financials, and things we wish we had known sooner.
Our club is fiscally sponsored by Hack Club, a 501(c)(3) non-profit.
What does it mean to be fiscally sponsored?
This means that Hack Club will hold an account in our name. We're free to spend and receive funds through this account.
What are the pros and cons of a fiscal sponsorship?
Companies are more willing to donate to non-profit accounts because it guarantees tax deductions for them. This makes seeking sponsorships easier. If they were to donate to the school, there would be a lot of hoops to jump through: getting the correct forms, coordinating with admin, and even ensuring the funds go to the right account. Once we have the funds, the school could refuse to let us spend them for anything they deem unnecessary. The fiscal sponsorship eliminates the need for the middleman and ensures our club's funding goes exactly where it's supposed to.
On the other hand, fiscal sponsorships force you to be meticulous in your bookkeeping; lest you be thrown in legal trouble. Keep all receipts and be ready to explain any fishy transactions. Remember to send your W-9 forms and IRS Determination letter to the businesses that sponsor you. Hack Club also charges a 7% fee on all donations. The 7% may feel like a lot but is ultimately worth it for the benefits their fiscal sponsorship provides.