Frequently Asked Questions
Why use The Hub as a fiscal sponsor?
There are many benefits to becoming a project of The Hub:
- Once accepted as a project, you have the immediate ability to function as a nonprofit project under The Hub’s 501(c)(3) status
- We oversee the Board of Directors and provide full administrative and fiscal oversight, including bookkeeping
- We manage all federal and state tax filings
- Most project activities are covered under our general liability insurance policy
- We are a small organization and can provide personalized services
- We provide regular financial reports and can generage audited financial statement as required by grantors and foundations
- We provide our projects the capability to accept donations by check, cash, credit card, PayPal, P2P, Dwolla, EFT and carrier pigeon
- We send thank you letters/tax receipts to donors for all donations over $50
- The Hub’s network of projects promotes collaboration and resource exchange
How does a project become a part of The Hub?
Please email us or download an application from this site. Read the application carefully and be as complete as you can. This will help determine if your project is a good match for our organization. When done, send the application to us via email or snail mail.
When we receive your application, our staff reviews your proposal and will be in touch with any need for clarification within 5-7days. Please let us know if your project will benefit from a faster turn around and we will see what we can do. Once we have a thorough picture of your project it goes for a board review. If we determine your project fits within the mission and goals of our organization, we will invite you to interview with us.
If The Hub and your project agree to move forward with a fiscal sponsorship agreement, The Hub Director will sign formal agreements with representatives from your project. Once the agreements are signed, the project will be free to announce itself as a project of The Hub and begin raising funds under our umbrella.
What if I'm not sure my project fits within The Hub’s criteria?
The best place to start is reading the mission and charter of The Hub. If you are still not sure, please contact us directly and we can talk it over.
What are the fees for being a part of The Hub?
There is no fee to apply to The Hub, however, projects pay an application processing fee of $200 which is due following project acceptance.
In addition, each project pays a baseline fiscal sponsor fee of 7-10% of project revenue to cover standard services. The fiscal sponsor fee is not taken from in-kind donations and we do not manage any taxable revenue for projects. The fiscal sponsor fee is variable based on the size and complexity of a project's programming.
Does The Hub help with fundraising?
Each project is responsible for raising funds necessary to cover their expenses. That said, we can help projects access help with grant writing and potential grant resources.
Does The Hub keep a database of donor information to help projects with fundraising?
Each Hub project has access to information from thier own project's donors. We do not share information across and between projects. We understand that donors expect organizations to respect their privacy and follow this unwritten standard.
Do we have to have already been working at the business of our project?
The Hub encourages start-up ventures. Our mission welcomes all entrepreneurs interested in providing some form of public benefit. If you’re serious, we’re here to help.
How do we access funds for our project once they have been donated?
Any and all donations are directed to The Hub for Direct Community Action. They can be in the form of cash, check, credit card (we accept Visa, MasterCard, Discover, American Express), PayPal, Dwolla, P2P or EFT.
Once donations are received they are available for project expenses. Funds are accessed through procedures which require simple forms to be filled out and appropriate justification provided. For more information, please refer to our Operations Manual on this website. If there are not adequate funds in the account, the bills will be held until such time as funds are available.
Can we collaborate with other Hub projects?
Of course. We’d love it.
Can our project lobby voters or politicians?
The rules around nonprofit organizations participating in legislative or political influence are governed by federal regulations. If your project imagines wanting to influence legislation or elections speak with us directly to be sure you understand the limits of nonprofit lobbying.
Can project staff be paid for doing the work of the project?
One of The Hub's responsibilities is to monitor project spending to ensure it is commensurate with the work of the project. That said, receiving compensation for nonprofit work is perfectly legitimate. However, a project's entire expenses cannot be compensation related. There should always be operating expenses included in nonprofit project work.
Do we need to form a Board of Directors?
No. The Hub’s Board of Directors is the de facto Board for all Hub projects.
That said, to promote capacity building with the community you serve and legitimacy with funders, projects are encouraged to consider forming an advisory committee to oversee and support the project’s goals.
Are raffles allowed as fundraisers?
Raffles are considered gambling under the law so using them as a fundraising tool require forethought and planning. They are usually possible with advanced permission from regulatory agencies, restrictions, and specific record keeping.
Who owns any intellectual property created by our project?
The simplest answer is that any product produced with donated funds must remain under a charitable umbrella. This is strictly a legal issue. With fiscal sponsor relationships, the contractual relationship between the fiscal sponsor and the project outlines the ownership issue more specifically. In some cases, it is possible for intellectual property to be purchased from the non-profit. It is also possible for projects who intend on establishing their own non-profit to maintain ownership of intellectual property when they leave The Hub by transferring that asset to the new non-profit..
Can a project enter into contracts with outside vendors, service providers or individuals?
Project representatives can negotiate contracts as individuals; however, The Hub will not take on the potential of future debt in the name of a project through contracts.
If I’ve already collected donations for my project can I roll them over to The Hub when I sign on as a project?
Yes and No. If the funds were donated to another nonprofit organization, they can be transferred to The Hub and the donor maintains their tax deduction.
However, if the funds were given to a private party and deposited into a private account, they cannot be considered tax deductible under the original donor's name. The private party who deposited the funds into their account, though, is free to roll them over to The Hub.
All that said, if you have donations in your possession that have not yet been deposited, the donations will be tax-deductible if they are deposited into The Hub’s bank account.
Can businesses give money to our project?
Yes, but there are some regulations about business donations governing what they can receive in return. If you have a business donation, please speak with us directly.
Can a person’s professional services or letting us use office space, for example, qualify as a donation?
Generally, professional servcies are considered a volunteer activity and can not be converted to a monetary donation. Donated office space is deductible under certain circumstances. This is a matter best discussed by the donor with his/her tax adviser.
How does my project enter into a lease or use credit to purchase a product?
Many projects find it necessary to lease or use credit to purchase acquire items to complete their mission. All credit purchases and leases need to be executed by an individual associated with your group, not by your project or The Hub.
The Hub or your project must not be listed as payer, payee, leaser or leasee on any contracts.
Can someone donate a tangible good (like toys or office supplies) and receive credit for donating?
Yes. If a project of the Hub receives donations of tangible goods it is considered an in-kind donation and is tax deductible.
Do we need to stay with The Hub for a minimum amount of time?
No. We welcome you to stay as long as the relationship proves useful.
Will The Hub help us get nonprofit status if we decide to go in that direction?
Projects are welcome to use The Hub as a platform while going through the application for tax-exempt 501(c)(3) status. We will provide any and all the help we can.
And, if I have more questions?
You are welcome to contact us any time.