Identifying a 501c3 non-profit organization to serve as fiscal sponsor for GOAT 2024

Open Ag Technology
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:money_with_wings: What do we need from a Fiscal Host?

This GOAT Fiscal Host Needs document overviews what we need from a fiscal host. It is the email that will be sent to all potential fiscal hosts that we are already in communication with. It also contains our host review criteria.

:goat: Who’s involved in this effort?

GOAT 2022-23 organizers: @jgaehring @julietnpn @gbathree @laurieWayne @sudokita

We have 4 potential fiscal hosts that we are currently in communication with. All four are mission and value-aligned hosts introduced to us by current members of GOAT. The introducers will also serves as the fiscal host liaison.
Fiscal Host ORG 1: Bionutrient Food Association @gbathree
Fiscal Host ORG 2: New Mexico Community Capital @Chroma_Signet
Fiscal Host ORG 3: Regen Foundation @paul121
Fiscal Host ORG 4: Aspiration Tech @laurieWayne

:railway_track: Process to identify a Fiscal Host

  1. Request for org recommendations: GOAT community call announcements for connections to hosts, followed by GOAT-member email introductions to potential fiscal hosts. Shortly followed by this thread. @sudokita drafted a review table that compares information provided each of the hosts, to be filled out as we learn more from each host.

  2. Supplementary GOAT-meetings: As mentioned in the community calls we set up two additional calls to discuss next steps:

    • Nov 22: Meeting with whoever was available to draft action plan and review criteria. This meeting was missing too many key people, so we scheduled another discussion after the American Thanksgiving break.
    • Dec 1-8: Meet with all fiscal host liaisons + organizers to discuss content of the needs document and setup 1-1 meetings with Fiscal hosts.

  3. 1-1 Meetings with Fiscal Hosts to discuss mutual capacity and needs We sent all potential hosts the needs document prior to meeting, so they may assess whether or not they are able to serve as the GOAT fiscal host. We also provided orgs not familiar with OpenCollective a brief writeup on pros/cons written by @gbathree as he reflected on prior experiences with using the platform.

    • Dec 1: Fiscal Host ORG 4: AspirationTech meeting set up by @laurieWayne
    • Dec 5: Fiscal Host ORG 1: BFA meeting set up by @gbathree
    • Dec 6: Fiscal Host ORG 2: NMCC meeting set up by @Chroma_Signet
    • Dec 6: Fiscal Host ORG 3: RegenFoundation meeting set up by @paul121

  4. Reflections :thinking:

  5. GOAT 24 hour Feedback Period:

    • See below…

:sunny: :sunny: *RESULTS & FEEDBACK PERIOD :sunny: :sunny:

We have evaluated each of the candidates across 24 criteria and found that each candidate was viable and brought their own strengths - it was not an easy decision and we worked hard to make the best recommendation for what GOAT needs now.

One group in particular struck a balance in experience, availability, services and platforms offered, and alignment in values. We would like to move forward on forming a fiscal sponsorship relationship with New Mexico Community Capital at their 8% tier for 2024.

You will find a table demonstrating the criteria and evaluation of each candidate below. We are providing a brief window for input and feedback via email and here on the forum. We regret that the window for feedback is short as we must finalize our decision by 5pm ET today (Thursday, Dec 7) so we may complete paperwork to move forward with the generous donation from the foundation (more info on this after this piece is sorted). This has been a fantastic learning experience - we didn’t know what we didn’t know! We look forward to improving the process next year, and especially the opportunity for a longer duration for community input at this stage.

:sunny: :sunny: *REVIEW CRITERIA :sunny: :sunny:

CRITERIA Bionutrient Food Association Regen Foundation New Mexico Community Capital Aspiration Tech
Timeline shortest medium, tbd 8%: Short; 10%: weeks to create new account. More info via Hosting Service Doc 8%: Min 1 week (Dec 14 review); 10%: weeks to create new account, More info via website
Application Formality low low medium 8%: short review; 10%: full review
Contract types TBD, will need to be created from scratch TBD, will need to be created from scratch TBD, but exists legal/accounts team TBD, but exists legal/accounts team
Implication for IP none? none? none? 8%: none; 10%: technically, they own all IP for the life of the relationship
Who will manage/approve transactions? GOAT GOAT GOAT 8%: GOAT; 10%: their team, but with input from GOAT
What platform will be used? Other tools under the hood, Open Collective Other tools under the hood, Open Collective Quickbooks, OC-curious Commit Change
Who will approve expenses? GOAT GOAT GOAT first, then they sign off and process GOAT first, then they sign off and process
Can they accept individual donations? Yes, Whatever works for us Yes, medium-large through admin/manual/checks, small via OC (individual) Yes, direct to NMCC or via OC Yes, Direct to AspirationTech. Or via Commit Change
Who will review the GOAT + Fiscal Host Contract? Not clear who is writing at BFA, GOAT will have to self-review RF legal & account team, GOAT will have to self-review NMCC legal, GOAT will have to self-review Aspiraiton Tech legal, GOAT will have to self-review
Who will review the contracts with vendors? GOAT Unknown, tbd Unknown Aspiration
How will people submit expenses? Open Collective Open Collective Open Collective Bill dot com for large transactions, Expensify for payments/expenses
Is fiscal sponsorship what they “do”, i.e. is this service in line with their mission? No, but supportive of our work No, but curious in doing this, especially for kindred spirits Yes Yes
Reporting to foundation We do it all They will prep financial report, We prep narrative They will prep financial report, We prep narrative They will prep financial report, We prep narrative
Familiar with our funder and/or other granting groups and processes Familiar with grants, may be using their own contract? Familiar with grants, may be using their own contract? Have worked with our funder, Familiar with grants, may be using their own contract? Familiar with grants, Model A/Model C contracts
Comfort with OC Very little, will need support Little, but want to learn to use OC and train team on it. Little, but want to learn for other reasons Lots, but don’t use it because they have their own infrastructure
Contrib level 8-10% depending on effort 5-10% depending on effort 8% : their group account; 10%: their account, our own quickbooks instance 8%: we do whatever, they just send us the funding; 10%: We will need to use their fintech infrastructure, they do all taxy things. They prior exp with OC (according to this)
Admin/energy overhead from GOATSignificant Significant Medium. If we like using Quickbooks, less of a problem. 5%: Medium; 10%: If we use their infrastructure, not a problem
Status for engagement with GOAT? yes yes yes May be too full to take us on.
Knows how to do fiscal sponsorship - if so, experience Fiscally Hosting - years, $/# orgs yes Wants to learn - “invest in this as a process” Yes, 6 years, ~15 orgs Yes, 20 years, many many orgs
How well do we know them? We have worked directly with BFA, including direct investment to GOAT Paul knows them. Marcus knows them. Greg knows Gunner and has worked with him.
Constraints on fiscal sponsorship none 1099’s only from US citizens and businesses Contracts will make this more clear Contracts will make this more clear
What is the value for them? Provides financial support for their team. Helps them pilot their fiscal sponsorship pipeline, Provides financial support for their team Helps them grow their program, Provides financial support for their team Expand the open source tech world to ag+food
Other benefits and services? Agency in the infrastructure set up Agency in the infrastructure set up since they’re starting from scratch NMCC automatically does letters to donors, Potential for some agency in the infrastructure set up Provides coaching and governance advice/support as well as donor letters
How can we support them? Mutual support in learning about fiscal sponsorship. Mutual support in learning about fiscal sponsorship. Mutual support in learning about OC, Support for their broader community Bring diverse experiences to their community.

1-1 Meeting Questions asked of ALL Fiscal Hosts
Our 1-1 meeting interview questions are listed here (though we asked additional questions as well)

  • How do you manage transactions?
    • We don’t require a separate account but want to flag the issues with Open Collective that may influence.
    • Are you able to accept checks and other forms of donation?
    • We would like to APPROVE expenses, like we have in the past.
    • Can we have categories (?), “meta-buckets” (conference cost, hosting costs, etc)? E.g., somebody donating for X v Y
  • What is your approach to transparency?
    • We currently use OC to show how and where all our funding is coming and going.
  • How do you track donations?
    • Can you accept individual donations?
    • Accept checks? Bank? Paypal? etc.
    • Are you able to provide an invoice chain?
  • What are your reporting practices?
    • E.g. to funders
    • E.g. to our community
  • What is your technology capacity?
    • Would you be comfortable using Open Collective?
    • What technologies might they already use?
  • What other services do you provide that we might not have thought of?

Additional References
Learn more about fiscal sponsorship here

TLDR: Our understanding is that for 5-8% we’d be doing Model A, for 10% we’d be doing Model C

Image source: The Models — Summary - Fiscal Sponsorship

:pray: Thank you List

All fiscal host groups that indulged our million questions and helped us learn more about the complexity of the space and potential routes to simplicity.
@julietnpn goat-herded all meetings
Fiscal Host Liasons @Chroma_Signet @paul121 @laurieWayne @gbathree made all the 1-1s possible!
@jgaehring took AMAZING notes during all fiscal host meetings.
@gbathree wrote an awesome lil summary of pros/cons using OpenCollective. I wonder if this should be a thread-doscussion in and of itself ??
@clarepolitano and @dwitzel for additional recommendations: given the urgency of this process, we didn’t have more bandwidth to add more groups to the list.

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I don’t know if they work with Open Collective, but the Software Freedom Conservancy provides fiscal hosting as a significant part of their operation, and as a bonus they’re also geared specifically to free software:

And I thought this group did fiscal sponsorship too, but reading now I might be wrong. Posting here anyway in case I was right and could be useful:

https://commonsconservancy.org/

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@Chroma_Signet has put @sudokita @gbathree and I in contact with https://nmccap.org/

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i think i’m too late to the party, but if you haven’t committed I’m a big fan of Inquiring Systems. They have a regeneration focus & are sponsoring Global Regeneration CoLab & Regeneration Pollination. Great service & good mission. GRC uses Open Collective with them.

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The question came up today on how the costs breakdown if you use Open Collective but bring your own fiscal host. I assume this can only really be done if the host registers on OC as such, and in that case OC will take 15% of whatever percentage the host charges. As they state on the website:

$0 if you don’t charge Host Fees to your Collectives ¹

15% Platform Share of your Host Fee revenue ²

(1) Payment processor fees apply when using Stripe, PayPal, or Wise.

(2) If your Host Fee is 10% and your Collectives bring in $1,000, the Host gets $100 and $15 (15%) is the Platform Share.

The scenario we were discussing was a 5% host fee I think, so if someone donated $1000 to GOAT, the host would get $50, keep $42.50 to cover their admin costs, and pay OC $7.50 for their admin costs. There’s also a couple fun interactive graphs and videos you can play with if you wish.

The other big contributing factor can be payment processors. When a host sets up their OC acct, they connect it to their bank account and Stripe or PayPal accounts, so those fees will take place outside of OC, and if memory serves, tend to be somewhere in the 3-5% range for Stripe or PayPal, but have no idea if non-profits get any breaks from them. This is what the Open Collective Foundation charges, which is its own fiscal host on the Open Collective platform:

  • 5% fee on each incoming contribution made via credit card or another method through your page on Open Collective. These transactions are automated.

  • 8% via all other means (like non-platform bank transfers and checks). This reflects the manual processing we need to do for such transactions.

So again, a lot of that will be up to the host, what payment processor they choose, and how they pass that cost down to the collective. I guess this is where you get into the territory of sausage-making details that OC and fiscal sponsors tend to shield their clients from or at least alleviate the myriad of choices but bundling it up into a simple transaction fee based on a percentage of the donation.

The last thing to consider would be taxes, but I think that’s largely w/r/t taxes paid on individual payouts. Hopefully sales tax on most expenses will be exempt via the 501c3 status, but then you’re getting into nitty-gritty tax jurisdictions and I’m not going there.

More links to their docs that prove useful:

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This is awesome..

Your decision matrix seems sound. Not having been part of the discussion due to flagrant absenteeism, the only thing I can think of at this point that feels relevant is:
ask whoever you choose how quickly they’re committed to turning around reimbursements, etc. I’ve had trouble with long lead times in the past to get the actual money out.

A partner that is eager to learn more would probably be a good energetic fit.

I think whoever you work with, you get out what you put in, and this group is a dream to work with because it’s so committed to partnerships. I think whoever it is will be lucky to have stronger processes at the end.

So looking forward! Great work!

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Yes! I think we raised this with each of the candidates, and NMCC was very confident in their ability to turn around reimbursements.

And flagrant absenteeism be damned! Always good to see yer avatar pop up here. :smiling_face: