Fiscal Sponsorship & Social Enterprise
"Why not finance entrepreneurial activity that demonstrates a potential for solving a social problem with philanthropic or social capital in partnership with private capital?"
"Make Money & Make A Difference"
History proves that societies benefit from the success of its entrepreneurs by creating philanthropists and donors to charitable causes to alleviate social problems. Many social problems, if looked at through an entrepreneurial lens, create an opportunity for the "social entrepreneur" to launch a social-venture; a business that "makes money and makes a difference".
"'Social Ventures' not only increase economic, social and environmental wealth, but serve as an alternative to government spending and increased taxation."
Today, while not a new concept, social-entrepreneurship or social enterprises are becoming increasingly popular. A social enterprise (either a for-profit or nonprofit enterprise) is one that utilizes business methods to achieve both a social or environmental objective and profitability. This concept is recognized in the global community as "Triple-Bottom-Line"...people, planet and profits.
"The benefit of a 'Social Enterprise' is that 'capital sources' are expanded beyond the traditional debt and equity capital sources...at a lower capital and ownership cost."
"We seek to create economic value in the social and environmental sectors through a 'social venture'; or, a partnering of a private and public entity" Greg Johnson
By partnering with a public-charity and becoming a 'social venture, a profitable business model can creatively solve socio-economic and environmental problems, rather than just make money for personal or shareholder wealth.
"Fiscal sponsorship...A Sanctity of Contract"
"Effectively a social enterprise is a type of 'social stewardship' to act in the public trust to create and preserve "community-wealth" Greg Johnson
In reality government 'outsources' responsibility to nonprofits to focus on social, economic and environmental issues; a sanctity of contract not to be taken lightly, mismanage or abuse.
Fiscal sponsorship is an efficient way for our 'public charity' partners to expand and intensify their social impact. Fiscal Sponsorship is an arrangement between a 501(c)(3) public charity and a project (that does not have that tax status) in which the charity has made a choice to support the nonexempt project under its or 'group exemption'.
The legal status and IRS Letter of Determination of a public-charity or religious organization enables it to provide 'fiscal sponsorship' to qualified projects. In essence, the sponsoring public-charity 'spawns' or incubates other projects through the 'fiscal sponsorship' of social entrepreneurs and social ventures that are aligned with the organization's core values and mission.
Fiscal-sponsorship facilitates and stimulates the capital flow between a sponsored-venture (public) and the "emerging social-investment community" (private)...those capitalists, philanthropists, corporate sponsors and grant sources that have traditionally fueled creativity and innovation.
"Public-Private-Partnerships (P3) Create Economic, Social & Environmental Wealth"