What is the National Lawyers Guild Foundation?
The National Lawyers Guild Foundation (NLGF) is a 501(c)(3) nonprofit that promotes the National Lawyers Guild’s mission through public education and grants to legal projects engaged in the defense of political and civil rights. As an independently incorporated organization, we are distinct and separate from the National Lawyers Guild, which is a 501(c)(4) membership organization. We have our own governance, which includes a separate board of directors and our own bylaws. Our main purpose is to support the NLG National Office through grants and technical assistance. We also provide fiscal sponsorship for selected Guild chapters, committees and projects that do not have their own 501(c)(3) status.
What is fiscal sponsorship?
Fiscal sponsorship is a formal arrangement in which a 501(c)(3) nonprofit sponsors a mission-aligned project that does not have its own tax-exempt status. The specific model of sponsorship NLGF offers is referred to as “grant-based.” The grant-based model means that the fiscally-sponsored organization can solicit tax-deductible donations but it remains a legally separate entity. Donations intended for the fiscally-sponsored organization are made to the NLGF and provided to the fiscally-sponsored organization in the form of grants from the NLGF. The NLGF has no responsibility or liability for the programmatic work, administration, fundraising, financial management, contracts, insurance, tax reporting, or other day-to-day activities of the sponsored project.
Why would I need a fiscal sponsor?
A fiscal sponsorship may benefit your organization if you have donors, foundations, and other funders that will only donate to an established 501(c)(3) tax-exempt nonprofit organization. Starting your own 501(c)(3) as an alternative is a very time-consuming and expensive process.
What types of projects does the NLGF sponsor?
The NLGF offers fiscal sponsorship to projects or organizations which further the NLGF’s mission to protect and advance human rights and the rights of ecosystems through legal education, training, and resources. Any new projects seeking fiscal sponsorship must have a direct relationship with the NLG or have NLG members directly involved. The sponsored project must have their own EIN and bank account and all required state and federal filings must be up to date. In addition, the sponsored project must have adequate administrative oversight, leadership, and infrastructure in order to adhere to the fiscal sponsorship program’s policies and operational procedures. This includes, but is not limited to, an annual budget, regular bookkeeping, and capacity to submit grant proposals and reports.
Can we apply for one-time fiscal sponsorship of a specific grant or contribution?
Yes. The application process, fees, disbursement procedures, and reporting requirements are the same as for ongoing fiscal sponsorship.
After we apply for sponsorship, how long does the review/approval process take?
The Board makes fiscal sponsorship decisions on a quarterly basis, so the overall process from the time we receive your complete application until a decision by our board may take up to 3 months. If your request is time-sensitive, we will attempt to expedite the decision, but it is not always possible. We are not able to sponsor every group that applies.
How do fiscally sponsored projects raise funds?
The sponsored project is responsible for fundraising. You solicit donations made out to the National Lawyers Guild Foundation and instruct donors to indicate that the donation is restricted for the sponsored project. If soliciting online donations, we will provide you with a link to a webpage created for this purpose. We reserve the right to review and approve all solicitation materials to ensure you are following all fundraising laws and that you do not say anything that would jeopardize the NLGF’s tax status. You are responsible for building and maintaining relationships with your donors, including sending out thank you notes. The Foundation will send receipts to all credit card donors and tax receipts for check donations over $250.
How are the funds disbursed?
We place the donations into a restricted fund which is disbursed to the sponsored project on a quarterly basis, in the form of a grant. At the end of each quarter, the sponsored project will receive an accounting of funds received and the assessment fee charged. The sponsored project must submit a written proposal asking for a specific grant amount and stating the general purposes for which it will be used. Once approved, the project must sign a grant agreement in order to receive the funds. A project can apply for funds on an emergency basis if needed before the next quarterly disbursement.
What are the fees and what do they cover?
A 6% assessment will be charged to all funds. If the NLGF accepts credit card donations for the sponsored project, an additional 1.5% fee will be applied to all funds. This fee helps defray the Foundation’s administrative costs of sponsoring your project. These costs include staff time, bookkeeping, audit costs, associated overhead, and credit card fees, if applicable. In addition, any third-party fees, such as bank service charges for wire transfers, will be charged to the fund.
Are there any limitations to how the grant funds can be spent?
The sponsored project agrees not to use funds in any way that would jeopardize the tax-exempt status of the NLGF. No portion of the sponsored funds shall be used in any attempt to influence legislation, participate or intervene in any political campaign, induce or encourage violations of law or public policy, cause private inurement or improper private benefit to occur, or take any other action inconsistent with qualification under Section 501(c)(3) of the IRS Code.
What reports are required during the fiscal sponsorship?
The project must provide NLGF with a narrative and financial report every six months. The reports must describe the work that was accomplished with the funds and how the funds are used. The project is also responsible for preparing and submitting any reports required by funders. No grants will be disbursed to any group that has overdue reports.
Why are there so many requirements?
The NLGF has assumed liabilities to the IRS about the nature of our activities so we must maintain records that document that our Board has control and discretion over the funds, that all funds are used to further our mission, and that no funds are used for prohibited purposes such as lobbying or electioneering.
How do I apply for Fiscal Sponsorship?
Please contact nlgfoundation@nlg.org for an application form, or if you have additional questions.
