FundSvcs Community

 View Only
Expand all | Collapse all

Tax Receipts with a new nonprofit/fiscal sponsor

  • 1.  Tax Receipts with a new nonprofit/fiscal sponsor

    Posted 7 days ago

    Hi, all, 

    A new nonprofit connected to my church got their EIN in May 2021 and their IRS exemption in April 2022, when they also opened their own bank accounts and started to receive their own donations and started working to transition their donors to them from the church. 

    For 10 years prior, our church served as the fiscal sponsor, receiving all donations and subgranting all funds to the nonprofit (as well as providing donor information to the nonprofit who sent out thank yous, while the church sent tax receipts).  For 2022, the new nonprofit wants to send out IRS tax statements.

    My assessment is the church should send the tax receipts for anything written out and given to the church - so all gifts from January to March, and any donors who did not convert to giving to the new nonprofit directly April-December.  This will mean that some donors get a tax receipt from both the nonprofit and the church.  

    Bottom line is - only tax-exempt organizations can send out letters tax compliant donor receipts for the gifts given directly to them.  

    Please let me know if this is off base.  

    Leah Garrett

    Vice President, Development and Communications

    Community of Hope

    Washington, DC



    ------------------------------
    Leah Garrett
    Vice President, Development and Communications
    Community of Hope, Inc
    ------------------------------


  • 2.  RE: Tax Receipts with a new nonprofit/fiscal sponsor

    Posted 6 days ago
    Hi Leah,

    Donors who gave to the sponsor likely need a receipt from the sponsor to substantiate their contribution, and donors who gave to the sponsee likely need a receipt from the sponsee. That said, the sponsee can certainly include additional information in their acknowledgement, such as the total annual giving by the donor, whether to the sponsor or sponsee.  You could even go a step further and have the letter be jointly issued by the sponsor and sponsee, and then it could serve as a true tax receipt for gifts to both organizations. So long as it was issued by the authority of both organizations I don't see any problem with it.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now: