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Fiscal Sponsorshop Agreement

Page history last edited by PBworks 13 years, 10 months ago

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Fiscal Sponsorship Agreement

 

Joint FR/BP Subcommitee = Scott, Amy, Lou, Courtney, Jessica, Erok, Morgan, Stuart. (If I left your name off please add it)

 

Click here for background info on what a fiscal sponsorship agreement is, some sample agreements for reference.

 

FSA development process:

(adopted at joint FR/BP meeting)

 

  • subcommittee solicits input for topics to be covered in agreement
  • subcommittee drafts agreement
  • lawyer reviews draft
  • relevant parties in both organizations review draft, submit comments
  • subcommittee incorporates comments
  • repeat as neccesary until--
  • agreement reached-- whoever-all signs on dotted lines!

 

Okay, here's a draft. Please review & comment.  I tried to codify what we already have worked out between us, include all the normal legal protections that other sample agreements had, and deal with a few outstanding issues that we had no procedure in place for (conflict resolution, changing this agreement). 

 

 

Free Ride/ Bike PGH draft agreement

 

1.) Protection of Non-profit status

 

The Project agrees not to use Funds received from the Sponsor in any way which would jeopardize the tax-exempt status of the Sponsor. The Project agrees to comply with any written request by the Sponsor that it cease activities which might jeopardize its tax-exempt status, and further agrees that the Sponsor's obligation to make funds available to it is suspended and this Agreement shall be terminated in the event that it fails to comply with any such written request.

 

The Project agrees to use any and all Funds received from the Sponsor solely for legitimate expenses on the Project, and to account fully to the Sponsor for the disbursement of all Funds received from it on a quarterly basis.

 

2.) Receipt of Funds

 

The Sponsor agrees to receive grants, contributions and gifts to be used for the Project, and to make those funds available to the project (within x time?).  Funds received by the Sponsor on behalf of the    Project will be used solely for the purposes of the Project, at the direction of the Collective Council of the Project. 

 

3.) Use of Funds

Project agrees to use any and all funds received from Sponsor solely for legitimate expenses of the Project, and to account fully to Sponsor for the disbursement of all funds received from it on a quarterly   basis.

 

4.) Acknowledgement of charitable donations on behalf of the Project (this means giving people receipts they can write off on their taxes).

 

The Sponsor agrees that all grants, charitable contributions and gifts which it receives for the Project will be reported as contributions to the Sponsor as required by law, and further agrees to acknowledge receipt of any such grant, charitable contribution, or gift in writing and to furnish evidence of its status as an except organization under Section 501(c)(3) to the donor upon request.  The Sponsor agrees to notify the project of any change in its tax-exempt status.

 

5.) Financial Procedures: 

The Project must abide by all financial procedures established jointly by the Sponsor and the Collective Council of Project to apply to the Project.

 

 

6.) Adminstrative Costs:

 

  • The Project will provide funds to the Sponsor for the costs of all accounting services conducted to maintain financial records of the Project.
  •  The Sponsor shall conduct an annual audit in accordance with the requirements of state and federal law; the Project shall supply – percent of the costs of the audit.  (the Sponsor shall make reasonable efforts to contain the costs of the audit, the Sponsor shall notify the project of the cost of the audit 1 month in advance of billing) 
  • The Project will provide funds to the Sponsor for the costs of payroll services or other administrative costs related to employees working at the direction of the Project
  • (funds for above-described costs will be provided by the Project within 1 week of delivery of invoice from Sponsor). 
  • Stuart: Need an itemized invoice of these bills so we know what we're paying for - also - rates should be set in advance.

 

7.) Employment

 

  • Upon proposal of a grant for work on the Project, appropriate classification of personnel to be compensated with grant funds shall be designed based on the requirements of the granting agency and the wishes of the personnel to be compensated (where consultation is possible). 
  • All personnel to be compensated for work on the project in an amount exceeding $600 will be classified as independent contractors or as employees of the Sponsor. 
  • (?) Personnel employed by the Sponsor for work on the Project shall be subject to the same policies, benefits, and responsibilities that apply to all employees of the sponsor. 

 

8.) Fundraising

 

  • The Project may solicit gifts, contributions, and grants on behalf of the Sponsor which are earmarked for the activities of the Project.  The Project’s choice of funding sources to be approached and the text of the Project’s letters of inquiry, grant applications, and other fundraising materials are subject to approval by the Sponsor.  The Sponsor’s Executive Director must co-sign all original letters of inquiry, grant proposals, and grant agreements. 
  • The Sponsor may solicit gifts, contributions, and grants using materials that reference the Project, and may include activities to be conducted by the Project or jointly between the Project and the Sponsor.  In such cases the choice of funding sources to be approached and the text of letters of inquiry, grant applications, and other fundraising materials are subject to approval by the Executive Director of the Sponsor AND the Collective Council of the Project.  A representative of the Collective Council of the Project must co-sign all original letters of inquiry, grant proposals, and grant agreements.

 

9). Insurance

The Sponsor shall maintain an insurance policy that provides:

 

  • Liability coverage for Sponsor and Project while leading bicycle rides.
  • Liability coverage of the Free Ride premises and operations involving the public and volunteers at Free Ride. 
  • Coverage of damages due to theft, fire, or accident at the Free Ride premises

 

The project shall pay (?what number?) percent of the costs of the insurance, within 1 month of the delivery of an invoice from the Sponsor.

 

10.) Communication

Sponsor and project will each provide quarterly updates of major activities to the other, which will be made available to staff, collective council, board, (and members/volunteers?)

 

11.) Governance & Decision-making

Project shall be governed by the Free Ride Collective Council, with autonomy in all matters except as set forth in the Fiscal Sponsorship Agreement. 

Future decisions relating to the topics set forth in the Agreement, or revisions of procedures and policies related to these topics, can be proposed by either the Project or Sponsor as necessary. 

Communications on such issues will be between appointed liasons of Project and Sponsor, or at joint meetings open to interested members of the Free Ride Collective Council and the Bike Pittsburgh staff and board.  Decisions shall be reached either by consensus at joint meetings publicized in advance according to the internal policies of Project and Sponsor, or through agreement between liaisons who are operating within the authority given to them by the organization they represent.   

 

12.) Resolution of Conflicts.

Grievances shall be communicated between liasons, or at joint meetings open to members of the Free Ride Collective Council and the Bike Pittsburgh Board and Staff, publicized in advance according to the internal policies of both organizations.  As communication between liasons and decision-making bodies of either organization can be slow, liasons should agree upon a timetable for communication and action to resolve the grievance.  If either party finds that a) the liason for the opposite party does not respond adequately, b) the liason violates agreements about communication or timeliness of response, c) the liasons cannot come to agreement about appropriate actions or timeliness for response to the grievance: the aggreived liason may petition the full board of Bike Pittsburgh or the Collective Council of Free Ride in writing for redress of the grievance. 

 

If differences cannot be resolved among the decision-making entities of the Project and Sponsor, mediation through a mutually agreed-upon outside party must take place before legal action is brought about by either party. 

 

 

 

 

RIGHT NOW WE'RE ON STEP ONE - YOUR INPUT IS NEEDED!

 

Topics That Should Be Covered in the FSA:

 

(from David Hoffman): I think it is important to frame

and delineate the term of the agreement between BP and FR, an

automatic renewal (the idea being that the agreement renews

automatically for a specified period of time unless one party wishes

to make changes), and an "escape clause" allowing FR and BP to go

their separate ways if necessary.

 

(From Lou Fineberg) Good groundwork for this process. I think many of your examples cover a good deal of the types of things I would expect to see in the agreement. I would also prefer to see a simple straight forward document that avoided lots of legal language.

 

Stuart

Based on the example agreements, I think they make more sense legally if we are a legal entity (but not a tax exempt one) - perhaps FR should become something easy like an S-Corp so that there is a legal entity to enter the agreement?

 

??

 

Other than financial accounting, what other types of policy/procedures should be in place to safe guard Free Ride and BP from legal action and to assure that we're following sound practices? I'd personally like to know what kind of safety procedures are in place to keep the shop safe, especially with so many kids using it. There should be a mechanism for tracking volunteer hours so that both orgs can benefit from the in kind contributions that may reflect. Maybe it should be written in the agreement that makes mandatory certain people at FR must hold certain positions within BP and vica versa, i.e. treasurer at FR must sit on BP finance

Committee.

 

Erok

I hear you stuart (re: safety), but do we need to get that detailed? It seems that alot of the statements are purposely vague. I'm not really arguing one way or the other, i'm just asking the question before we get too bogged down in details and losing the big picture aspect of it. I kind of find myself at an impasse here. i don't really have anything to add at this moment, and feel that a more prudent approach would be to take one of the models, fine tune it to our group, and send it out, ala the free ride words. I guess that would be skipping a step, but i don't have a great mind for legalese and am feeling a bit lost. i kind of like the format of this one sample agreement. I guess I feel Jessica did a good job compling some good points and i don't really think i need to add anything at this point and think that seeing a working document will help more. but that's just me.

 

Shaun

Echoing Erok... and also: is there some resistance to framing this simply and effectively as an outline of the way things already are? Honestly? I don't really know why it needs to be batted back and forth for the course of 2007. I'm not trying to be flippant, I just see that a working agreement can be an illustration of what's already going on in the same way that The Words effectively are. We're not looking to create something that we then have to live up to - we've already been doing it for years and it just happened to become reasonable that we go ahead and write it on paper. There appear to be a couple of simple concerns that we should tack in, like escape clauses, and then we've got something that we can always tweak later (should we ever even need to). It seems like we are in the collective habit of making monsters out of rather mid-scale projects, then letting them loom over our heads instead of just handling them so we can get on with getting more bikes on the streets and toppling the US government and it's attendant demons.

UPDATE:

I think this all sounds fine and accurate. I appreciate the idea that "Project" will only have to report to "Sponsor" quarterly!

 

Matt

I agree with Erok and Shaun. Of the three samples I've read, I find the first http://www.mncn.org/doc/SAMPLE%20FISCAL%20AGENT%20AGREEMENT.PDF to be the best mix of legalese and what is already happening. My vote is to use this one, with the addition a clause here or there for any specific concerns and move on.

 

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