Frequently Asked Questions about Fiscal Sponsorship

Are donations to the program tax-deductible?

Yes, as long as the donor is receiving nothing of value in return (If a donor is paying for services, like a conference or a dinner, then the Fair Market Value of that item is not deductible). All donations must be sent to United Charitable for deposit. We will place these funds (minus our applicable fees) into an internally segregated account to be used to further your charitable purpose. DO NOT open your own local bank account. THIS IS PROHIBITED.

Once your program has been accepted at United Charitable, we will send you the applicable forms to use when recommending disbursement of funds from the United Charitable account. You will also be given a secure login ID and password that you can use to see your account balance and transactions.

Are gifts of services tax deductible?

The IRS rules on this are clear; the answer is "no." For example, if a surgeon who charges $5,000 for a heart valve replacement procedure donates his time to provide ten such procedures for needy patients without health insurance, he or she is not allowed any charitable deduction for the value of his time, even if there is an established "market" to substantiate value. This same rule applies to the time spent by an artist in providing services to or for a charity, or a hotel that donates a room for the night.

An artist is limited to deduction of the actual cost of the materials used to create a work of art, but only if the artist has not "expenses" (or "deducted") the cost of such materials. Most professional artists deduct as "overhead" the cost of raw materials, paint, supplies, etc. These are deducted under Code section 162 which allows a deduction for "ordinary and usual business expenses." There is no benefit to the artist in taking a Code section 170 charitable deduction if a Code section 162 business deduction is available. Although you should always check with your tax preparer for tax advice.

IRS Publication 526 provides a useful chart which summarizes what is and what is not deductible.

As a fiscally sponsored program of United Charitable, will I have insurance coverage that accounts for the activities of the project?

Yes. We charge a very nominal annual fee that covers the cost of insurance for the activities of your program. The overall insurance policy for United Charitable and our programs will cover program events and activities through:

  • General Liability
  • Improper Sexual Conduct
  • Social Service Professional & Special Endorsement
  • Cyber Coverage
  • Non-Owned/Hired Auto Liability
  • Accident

Please see our Frequently Asked Questions About Our Insurance Program here.

Can I open a local checking or bank account?

No, do NOT open a Local Checking Account or a Bank Account of any kind! Local checking and bank accounts bearing the name of a Program at United Charitable are not permitted. Please only use the Donation Deposit Form to send in donations to your Program at United Charitable.

Each gift, even though benefiting a specific Program at United Charitable, must be mailed by the Program Manager, using the Donation Deposit Form to United Charitable at:

United Charitable
8201 Greensboro Drive
Suite 702
Tysons, VA 22102

...otherwise it will not be tax-deductible by the donor. Do not have donors send their donations directly to us at United Charitable. Checks may be made payable to the name of the Program. Do not endorse these checks. If you have collected cash, please send us a cashier's check or money order for the funds. The Program Director must use the Disbursement Request Form to request disbursements from the program account.

Do all funds become the property of United Charitable?

Yes. There must be a "completed gift" to the charity in order to obtain any tax deduction. This means that all right title and interest in the donated property must pass to the charity. Therefore, United Charitable is in control of all donated funds.

Do I have to do any filing, registering, etc.?

No. When you have a Program at United Charitable, we do all the paperwork. We file the IRS Form 990 annually that includes the activity of all our programs.

You must, however, submit a Annual Activity Report (found on our Forms & Policies menu item) to United Charitable to tell us what you've been doing, both successfully and not so successfully. We will send you a reminder when these reports are due, typically in March of each year.

Do you assist with fundraising for my program?

No, United Charitable does not raise funds for your program. The Program Manager is responsible for soliciting the funds and grant monies to support the program. United Charitable is responsible for receiving and administering charitable contributions and grants on behalf of the program.

However, we do provide access to tools that make fundraising easier. See our Resources link for information about raising funds for and awareness of your program.

How do I begin?
Fill out an Application to Begin a Fiscally Sponsored Program and get started today, or contact us for more information.
How long does it take for approval of my application for fiscal sponsorship?
We have a review committee that evaluates each application as they are submitted. We review your application for charitable purpose, clarity, and feasibility among other items. If the application is complete and legible (please only submit typed applications), and the charitable purpose is accepted by United Charitable, you should receive approval within 3-4 weeks. Otherwise, if we need additional information or clarification, we will give you a call.
How much does the application for fiscal sponsorship cost?
The application fee to begin an active charitable program $1,000. Please click here for more information, and to download the program application.
Once my program has been accepted by United Charitable as a fiscally sponsored program, have I become a nonprofit?
Being a fiscally sponsored program at United Charitable does not make the program an independent tax-exempt organization. Those who donate to your program at United Charitable gain the benefit of a charitable deduction for income tax purposes by donating to United Charitable, a 501(c)(3) nonprofit organization.
We developed some materials that we sell. Who owns that property, and what happens to it if we leave United Charitable's fiscal sponsorship?
United Charitable is the owner of all assets, including intellectual property, for the duration of time your project is fiscally sponsored. We will hold the asset for the exclusive benefit of your project. If your project leaves to become an independent 501(c)(3) or operate under a new sponsor, the intellectual property (along with all other project assets) will go with the project.
What are the ongoing costs?

United Charitable charges an 8% administration fee on all incoming funds to your program. Our Annual Fee is $500 and is due in May each year.

We charge 12% for grants of $5000 due to the extensive steps required along with the time that is spent on applying for, monitoring of and reporting on grants.

UC staff are required to be involved in the reviewing and submitting of all grant applications (as they must be approved and signed by our corporate staff members). This is due to the fact that UC is responsible for the activities of our programs (and therefore what is stated in the grant application as program activities) and we are the legal entity on file with the IRS as the public charity receiving (and being responsible) for those funds.

At a higher grant threshold, UC is required to report and track grant income and expenditures on our financial statements and if applicable have a separate audit in addition to our regular yearly independent audit.

Additionally, grants over $5,000 (although some under that amount as well) typically require a reporting process back to the grantmaker (such as narratives, expenditure statements, reports, etc.) that is compiled by UC staff. For more information about applying for grants, please email info@unitedcharitable.org. 

Other charges may apply from time to time. You can review a list of additional fees that may be incurred.

Why does United Charitable exert full discretion and control over each program that it sponsors?
United Charitable is the entity that is legally responsible for all funds received on behalf of a sponsored program. We provide oversight and must ensure that the program uses the funds for the program's stated charitable and educational purpose. This oversight is accomplished through an application process, internal procedures regarding disbursements and grants, and a fiscal sponsorship agreement between United Charitable and the program that details the specifics of the relationship. When a donor makes a contribution to United Charitable with a recommendation that this contribution be applied to your program, United Charitable monitors that their donations are properly used by your program. We also ensure that all tax-reporting requirements are met.

Call us at (571) 620-3000 for any questions!