Relationship between SPI and associated projects

Fiscal sponsorship

SPI acts as a fiscal sponsor for associated projects. Each associated project has an SPI liaison, who is SPI's single point of contact for that project. When a donor directs their donation to SPI toward a specific associated project, SPI tracks the donation as held on behalf of that project.

When the project wants SPI to take an action on its behalf, the project's liaison informs SPI. The request is reviewed for compliance with relevant laws, SPI's corporate purpose and governing documents, the requesting project's purpose, the obligations imposed by SPI's 501(c)(3) tax exemption, and what is logistically feasible for SPI to do given the available volunteer and paid labor.

Although SPI exercises its own independent judgment on every request, SPI generally carries out requests from project liaisons which comply with these requirements, to the extent that they do not require spending assets beyond what it holds for the requesting project.

SPI handles assets held for a defunct project in accordance with its agreement with that project. For those projects where the agreement does not address this topic, or when the agreed procedure is impossible or impracticable, SPI exercises its judgment within the options allowed by the law. For instance, if legally permissible, SPI might assign such assets to a surviving associated project or other 501(c)(3) organization with a purpose similar to that of the defunct project, or might allocate them to its general fund.

Review our list of services provided to associated projects.

Project independence

SPI does not own, govern or control an associated project. SPI does not prohibit the project from having a similar relationship with other fiscal sponsors.

The legal identity of an SPI associated project is not changed through their association with SPI, nor does it become part of SPI. Most SPI associated projects are unincorporated associations of individuals.

SPI's status as a US tax-exempt charitable nonprofit does not extend to its associated projects, since those projects are independent, but associated projects can benefit from SPI's status when acting through SPI. For example, donations to SPI on behalf of an associated project are often tax-deductible for US taxpayers, but donations that bypass SPI and go directly to the individuals involved in the project are not typically tax-deductible.

Freedom to leave

The project may decide that the project is leaving SPI at any time.  Any assets and money held by SPI for the project may be transferred to a 501(c)3 US non-profit of the project's choice, or simply held until expended.

Liability

SPI does not normally indemnify associated projects or members, nor do associated projects or members normally indemnify SPI.

SPI carries directors and officers insurance to offer some liability protection to its officers and to the non-officer members of its board of directors. Some jurisdictions, including SPI's home state of New York, also limit the liability of volunteers working in good faith with non-profits such as SPI.

Contracts signed by SPI on behalf of associated projects sometimes contain specific provisions relating to liability or indemnification, such as when securing event insurance for project-specific conferences.

SPI will normally aim to avoid becoming legally obligated to spend more money on behalf of a project than it holds (or soon will hold) on behalf of that project. There is always a risk of some unavoidable and unforeseen expense, such as a court judgment to pay damages, exceeding this level. In such an unlikely circumstance, there may be a impact on the funds available to projects other than the one which triggered that expense until funds are replenished.

Otherwise, SPI, each associated project, and each member is only liable for the actions they take, or which are taken on its behalf.

See also