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Tips and Answers to Your Questions
The Forms of Strategic Restructuring
What is the difference between fiscal sponsor relationship and parent/subsidiary relationship?
Fiscal sponsorship is when an organization with 501(c)3 status allows an organization, group, or individual that does not have a 501(c)3 to operate some or all of its activities under the umbrella of its 501(c)3. Most often the sponsored organization, group, or individual wants to receive financial support from a private foundation or government entity, or tax-deductible donations from individuals or corporations. A parent-subsidiary structure is an integration of organizations that combines some of the partners' administrative functions and programmatic services. The goal is to increase the administrative efficiency and program quality of one or more organizations through the creation of a new organization or designation of an existing organization ("parent") to oversee administrative functions and programmatic services of another organization ("subsidiary"). Although the visibility and identity of the original organizations often remain intact in a parent-subsidiary relationship, some organizations involved in such restructurings consolidate to the point where they look and function much like a merged organization. |
