Nonprofit Collaboration: Partnerships vs Fiscal Sponsorship vs Programs vs Coalitions

Nonprofit collaboration helps the nonprofit sector thrive by pooling together resources and work to support a common goal. Some of the ways that nonprofits collaborate are through partnerships, coalitions, shared programs, and fiscal sponsorship. Let’s dive into these charitable ventures and explore how Ribbon can help each succeed.

Fiscal Sponsorship

Fiscal sponsorship is a financial model where tax-exempt nonprofit organizations lend their nonprofit status to projects, groups or causes, allowing them to receive tax-deductible donations. This allows these new organizations to gain the benefits of official 501(c)(3) status without going through the official application process.

Ribbon facilitates fiscal sponsorship and helps projects looking to start tax-deductible fundraising activities quickly. We enable charitable ventures by ‘lending’ them 501(c)(3) nonprofit status. Coupled with the financial and administrative tools we provide, we help projects avoid IRS wait times and enjoy tax-exempt status from the get-go!

Groups that already have 501(c)(3) status look to Ribbon for the time-saving benefits and tools that we provide. Generally, coalitions and collaborating nonprofits that are working together must not expend additional time and resources in the process.

Ribbon provides their teams with collaboration tools along with donation and donor tools. These groups cannot afford to add to their workload, rather they need the efficient administration and turn-key tools that Ribbon gives.

Let’s look at each venture and how Ribbon helps aid nonprofit collaboration…

Nonprofit Collaboration through Nonprofit Partnerships

Bridgespan surveyed hundreds of nonprofits and foundations to learn how much collaboration was really taking place in the nonprofit sector. Their study found that 91% of nonprofits have engaged in at least one form of collaboration in the last 3 years and 54% engaged in 2 or more forms of collaboration in the last 3 years.

Sometimes this can be a collaboration of programs or more formal agreements like mergers. The consensus of the study was that partnerships are successful and nonprofits and foundations alike are open to more collaboration.

n alliance, static collaboration starts.

Once a potential partner is found, and key stakeholders are in alliance, then strategic collaboration can take place. The goal is often to expand programs or services. 

To make this easier, Ribbon provides partners with secure financial reporting, donation tools, banking, and team management. By giving all stakeholders access to these tools, nonprofits can increase transparency, share data, and simplify their reporting.

Nonprofit Collaboration through Nonprofit Programs

Nonprofits are typically built around fulling services tied to their mission, often called programs. Funds coming in, volunteers, facilities, services rendered, assigned budget, etc, all work to fulfill the programs. The number of programs a nonprofit has varies based on their mission. Some nonprofits have many different programs while others are solely focused on one. The program outcomes can be anything from increased food security to cleaner beaches. The goal is always to fulfill the expressed purpose of the organization. 

What happens when a need arises that is outside the purview of the nonprofit’s expressed programs? Or what if the annual budget has already been approved, and a new program is needed? If all the funds have been earmarked for other purposes, what are the nonprofit’s options?

In these cases, a separate fundraiser is sometimes needed. Before this can be done experts recommend that the needed resources be examined so that costs can be estimated as, “budgeting activity is almost always required in a proposal if the nonprofit wants to pursue funding for the new program.” 

The new program can be facilitated through fiscal sponsorship. This allows the nonprofit to keep its original books intact and keep clean original budgeting work. 

Ribbon helps in these scenarios by providing turn-key of banking, accounting, fundraising, and organizational tools that make short-term projects easy to take on. 

Nonprofit Collaboration through Nonprofit Coalitions

Coalitions happen when two or more nonprofits unite under a common goal. They can be informal and operate under the nonprofit status of one of its members or under a fiscal sponsor. This allows the coalition to be light on their feet and focus on the shared goal.

If the coalition grows large enough it can file to become a separate 501(c)(3), enabling it to operate as a sole nonprofit organization.

Here’s an example of an informal coalition. In 2018, three California nonprofits came together to help stop a homeless shelter from closing, leaving its residents without housing for months. Together, they petitioned the city council for funds, attracted media attention, and inspired grassroots advocacy!

Their coalition was a success! By working together they were able to secure the funds needed to keep the shelter open. Berkeley Group shared this story and writes that the benefits of the nonprofit coalition were “an excellent example of nonprofits coming together to influence and change local policies”. 

Another example of nonprofit coalitions can be staff development workshops or educational conferences. Coalitions like this often offer specialized training by issue areas like education or the environment. Additionally, they can focus on researching the impact of policy issues and advocating for changes.

Forming a coalition can alleviate some of the pain points nonprofits face, like limited resources, and allow them to pool expertise. 

Fiscal sponsorship is an efficient way for coalitions to save time and money. With a focus on maximizing resources, the fiscal sponsor handles back-office paperwork and provides essential tools. Particularly at the onset of the coalition’s formation, they are able to quickly effect change, while remaining flexible for the variety of forms that the coalition may take. 

Nonprofits go further and farther when they work together. Partner with Ribbon and extend the capacity of your nonprofit collaborations!  

Thank you for reading

Nonprofit Collaboration: Partnerships vs Fiscal Sponsorship vs Programs vs Coalitions

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