Curious about fiscal sponsorship? Heard the term but not sure how it might apply to your community project? Interested in finding a fiscal sponsor, but not sure where to start?
Friend, you’ve come to the right place! Here’s a practical FAQ about nonprofit fiscal sponsorship in general, and an introduction to ioby’s own fiscal sponsorship services. Continue reading What is fiscal sponsorship? Everything you need to know
If you’re a grassroots group that’s looking to get good done in your community, you might be wondering if your group needs to formally incorporate as a nonprofit organization before you can fundraise. Friends, we are here to tell you that the answer is a loud-and-proud: NOPE!
Continue reading How to fundraise if you’re not a 501(c)3 nonprofit
This week, we’re popping the hood and doing a little digging into our own track record with fiscal sponsorship, which is one of the important services we offer to the grassroots groups we support. We wanted to get at the story here: what brings neighbors to us with the funds for their neighborhood-improvement projects? When the leaders of a grassroots project start to look around at the potential fiscal sponsors available to them, how do they know ioby the best fit?
We’re also ramping up our work with fabulous partner organizations like Citizens Committee for New York City, which sent about 10 of their 315 projects to us for fiscal sponsorship in 2014. Citizens works with self-help and civic-action-oriented projects, granting support to promising initiatives in NYC. They require that their grantees, if they don’t have 501(c)3 status, either open a bank account in the group’s name or work with a fiscal sponsor. Sometimes, Citizens works with a non-501(c)3 group that actually has the means to open a new bank account in the project’s name, but opts for fiscal sponsorship instead, simply because that relationship will allow them to focus more of their time and energy on the project itself – the new community garden, the composting initiative, or whatever it may be. We’re looking forward to teaming up with other like-minded partner organizations in the coming months, and thinking actively about where we might be a good fit.
So. Our main takeaway? The resounding message we heard is that what ioby does well is SMALL. There is no neighborhood improvement project too small-scale, no organization or group of neighbors too “unofficial” (read: no office and no staff), no initiative too grassroots for us to take on. A single mural to be painted by local artists onto a rundown underpass in Memphis? Bring it ON. Four retired neighbors dreaming up a community garden in Brooklyn? YES PLEASE. A church raising money to rescue and relocate some honeybees that got stuck in their bell tower? DO YOU EVEN HAVE TO ASK? We love working with these tiniest of tiny initiatives. We believe in them completely, and we maintain that their positive impact in a neighborhood is often disproportionately large.
In fact, we’ve even coined a term for these sorts of tiny, hyper-local projects, which we are quickly becoming our specialty. “DEEP-ROOTS projects,” we’ve taken to calling them. We’re hoping it’ll catch on. And it’s somewhat unusual these days to find a fiscal sponsor who not only welcomes but also actively seeks out deep-roots projects. So if you specialize in the hyper-local, the tiniest of the tiny, the block-by-block, we’d love to hear from you. Email us at action@ioby.org, or read more about our fiscal sponsorship services here.
Today ioby is pleased to announce the national expansion of our fiscal sponsorship program.
Effective immediately, ioby will offer fiscal sponsorship to informal and unincorporated groups in any community in the United States. To take advantage of ioby’s fiscal sponsorship service, you must have a live ioby campaign. See the details of our fiscal sponsorship policy here. To be eligible to use ioby, leaders must live in the neighborhood where the project is taking place, have explicit goals to make their neighborhoods stronger and more sustainable, make no profit and benefit the public, and have tangible, measurable and measured results.
Since ioby’s beta launch in April 2009, we knew we wanted to serve those who many people call “the grassroots.” During our two-year NYC pilot phase, this meant serving the approximately 3,000 groups that steward green spaces across the five boroughs. According to research by the U.S. Forest Service NYC Urban Field Station, we know that more than half of these groups have annual budgets of less than $1,000 and nearly 70% are led by volunteers. The majority of these groups are informal; that is, they aren’t incorporated and certainly don’t have IRS recognition as a 501(c)3 non profit.
These groups, in NYC and in many other places, are critical managers of green space, open space and public spaces. They’re the unrecognized maintenance partners of plazas who run annual or seasonal cleanups. They start beautification projects. They run programs that activate public spaces and bring vibrancy to our neighborhoods. Most are powered by sweat equity, in-kind donations, small cash donations and small grants. And frankly, there is little incentive for these groups to incorporate and become 501(c)3s themselves.
We also found that ioby is a critical source of startup capital for new social enterprises and civic organizations. About 1/3 of ioby campaigns are explicitly startups and go on to raise additional funding from major gifts and grants.
Since our launch, ioby has provided a limited type of fiscal sponsorship to informal groups of neighbors and unincorporated groups in New York City’s five boroughs and Jersey City. In partnerships with the Miami-Dade County Office of Sustainability and the Memphis Mayor’s Innovation Delivery Team, ioby extended this service to the metropolitan areas of Miami, Florida in 2012 and Memphis, Tennessee in 2013. In these communities, ioby acts as a fiscal sponsor for approximately 60% of these citizen-led, neighbor-funded projects.
We surveyed ioby Leaders in New York, Miami and Memphis. Among other things, we found that providing tax deductions for donations was especially important in the lowest income neighborhoods where we work. (It wasn’t as important an issue for neighborhood leaders from wealthier families and neighborhoods, except when those groups were expecting to receive donations of $500 or more.) We’re serious about our mission to support leaders in low-income communities who are working to make positive change, and we believe that being responsive to about the services that matter to them and to their donors.
Well, for starters, we know that lack of non-profit status is a barrier to receiving philanthropic dollars, especially grants and large donations, but it may also be a barrier to effectively solving complex problems. In “Cultivating the Grassroots: A Winning Approach for Environment and Climate Funders,” by Sarah Hansen, we learn that environmental organizations with budgets higher than $5 million consistently receive more than half of all philanthropic dollars, leaving just half the pie for more than 80% of organizations. Hansen’s paper smartly argues that allocating funding explicitly for grassroots organizing in front line communities can effectively support national policies by mobilizing demand for change. But this citation from the Urban Institute only includes groups that have filed a 990 or 990-EZ with gross receipts of $25,000 or more, groups that are in many cases 5 to 25 times larger than a typical ioby Leader’s.
If this expert article assessing the landscape of the grassroots is looking to groups 25 times larger than who ioby typically works with, is anyone studying social change at the block level? What about the important work at an even more grassroots level?
Maybe more importantly, we believe that neighborhood leaders are not just underfunded and untracked, but that they’re an overlooked source of innovation to solve local problems that we believe can and already have demonstrably contributed to climate mitigation and resilience at the local level. To the ioby cofounders, this is worth underscoring. In this crisis, we can’t turn away from this important fountain of radical innovation.
Finally, resilience depends on the strength of community fabric. We believe more funding made available to these groups builds capacity and the strength of local networks. You can read more about ioby’s approach to neighborhood resilience here and here.
The leadership team at ioby wants to take this opportunity to commend Rodrigo Davies on his excellent, recently published research on the emerging field of civic crowdfunding. We’re grateful to have had the chance to work with him and share our work in his research process over the last two years. He’s taken the field a huge step forward, and we couldn’t be happier about it. Thanks also to Salon.com, Rockefeller Foundation, FastCompany and Next City, for contributing recent stories on the topic (by the way, to those Next City readers who decide to crowdfund your urban chicken farm, here’s a video, on how to start your urban chicken farm once you’ve crowdfunded it on ioby).
As the first U.S.-based civic crowdfunding platform and the civic platform that has supported the largest number of projects to date, we wanted to take this opportunity to share our opinions on a few of the challenges that Rodrigo has raised, and respond with a few case studies of our own.
In his blog announcing his report, Rodrigo raises two important questions that ioby leadership has some pretty strong opinions about. They are “Will civic crowdfunding deter public investment or encourage it?” and “Will civic crowdfunding widen wealth gaps?”
To the first question, thus far, ioby’s crowd-resourcing platform only suggests that our successful campaigns encourage public investment, and greater investment of all kinds. ioby campaigns, because they are funded by neighbors, implicitly demonstrate community buy-in, support and long-term stewardship. Supporting an ioby campaign is akin to a petition, where instead of signing your name, you give $35. It’s a powerful reminder to decision makers in public investment how difficult it is to assess whether communities truly support new projects.
Rodrigo’s second question is a little more complicated. Crowdfunding, even all $6B worldwide, is a relatively small portion of overall financial transactions, so it’s hard for us to assess a claim about wealth gaps at this time. But, taken at the neighborhood scale, it’s an interesting question. ioby projects are required to have a public benefit, so no matter who from the neighborhood gives to a project, the entire neighborhood can benefit. In some sense this could be considered a transfer of wealth from private assets to public assets within the same community. Rodrigo’s paper speaks to this definition of civic crowdfunding in terms of the production of the public good at length (beginning on page 28). But, having a public good accessible to all residents of a neighborhood, isn’t the same thing as increasing wealth or access to wealth (or decreasing either).
For now, the best we can do to answer the question is explain how ioby operates to in terms of a wealth dynamic in communities. ioby’s mission is to deliver resources (timely, right-sized funding) into the hands of civic leaders at the neighborhood scale undertaking projects for positive change. We work intentionally to support leaders in underserved neighborhoods, and the majority of ioby projects are in neighborhoods with average household incomes at or below the poverty level, led by residents of those neighborhoods, funded by the residents of those neighborhoods. Grounded in asset-based community development, ioby’s foundational principles are that residents of communities know what’s best for their neighborhoods and are the best equipped to design, implement, and steward local solutions. In addition, we believe that funding by neighbors is an important civic engagement tactic, source of personal accountability, and source of patient capital — the community itself.
And finally, no ioby projects were selected as case studies, but some speak to some of the questions Rodrigo has raised.
And finally, if you’re still reading, we do want to build on and underscore a few points from Rodrigo’s massive tome. First, ioby’s name is written in all lower case because our name comes from the opposite of NIMBY, and because ioby is a place for resident-led, neighbor-funded projects in public spaces that make neighborhoods stronger and more sustainable. We’re a mission driven 501(c)3 non profit organization dedicated to working in underserved neighborhoods. Our goal is to provide access to untapped source of patient capital – the community itself – and to amplify local work to a national audience in those communities that often have a greater number of local challenges and fewer resources available with which to address them. Our fundraising training program teaches communities to pool funds as startup or demonstration funding that can be leveraged to access other funds.
All of this is to say that ioby’s work is defined by collective grassroots action, working from the ground up, thus the all lower case name, the lowest median project budget size ($1,725) and ioby’s average donation amount (just $35).
ioby serves neighborhood residents. ioby Leaders must be residents in the neighborhood of their project. And most ioby Donors live within a couple miles of the project site. But we do work with governments, and have a long history of working with the NYC Mayor’s Office of Long Term Planning and Sustainability, the Miami-Dade County Office of Sustainability and the City of Memphis Office of the Mayor and Shelby County Office of Sustainability. We strive to work as a flexible facilitator to recognize the role of community leadership in meeting municipality goals and to expedite citizen interactions with governing agencies. We believe crowd-resourcing, as ioby defines it, can be a useful listening tool for government to understand where its citizenry’s interests and concerns are. In addition, we’ve just published two guide books for citizens working for change in Miami-Dade and in Memphis.
And finally, in response chart on page 40 in Rodrigo’s report, we want to mention that ioby’s tax-deductible donations are available to individuals and organizations not associated with a 501c3 by acting as a fiscal sponsor, most closely like a Type C fiscal sponsor (details here). For a complete list of ways that ioby differs from similar platforms, check out our blog on the topic.
How is ioby different from other crowdfunding sites? Glad you asked! There are some important differences.
1. ioby is a 501(c)3 non-profit organization, so all donations to projects on ioby are tax-deductible. Anyone can use ioby, so if you’re not a 501(c)3 yourself, ioby can offer you a limited form of fiscal sponsorship.
2. As a nonprofit, we have a mission to make sure your project is successful. This means we go the extra mile to make sure our platform is designed to serve you.
• NEW DONOR ACQUISITION. We give donors an easy way to join your mailing list after they’ve supported your project and send you the contact information of those who have given to you. Using ioby to power your campaign means a long-term investment in building your own base of donors.
• HIGH SUCCESS RATE. We have a very high rate of fully funded projects. That’s true because we’re here to help throughout the process.
• FLEXIBLE FINISH. We have a unique flexible finish policy that makes it easy for you to keep the funds you raised. “All or nothing” policies might work for contests, but not for real people doing important work on the ground.
• LOW FEES. We have a fee structure that intentionally supports early stage ideas and small projects. No matter how you figure it, we’re cheaper than our competition.
• TECHNICAL ASSISTANCE. We host webinars specifically designed to support civic leaders. We take the best lessons we’ve gathered from successful campaigns to date and share them.
• FRIENDLY STAFF. We care about your work and want to help leverage the ioby community of leaders to support you. We’re always here. And we listen to what you have to say.
3. ioby is more than a funding platform. We call ioby crowd-resourcing because we want you to get all the resources you need for a successful project. We connect you to other civic leaders, host meetings and discussions to support thought leadership in local solutions and civic engagement, like our Getting Good Done series, and bring you into a community of peer learning through our Recipes for Change toolkit. Check out our Resources.
4. You know what’s best for your neighborhood. All projects that are good for the community and make no profit are eligible to use ioby. We never judge how cool or innovative or creative your project seems to us. You know what’s best for your neighborhood, and we’re here to support you.
ioby is proud to be a part of the team behind the Miami Foundation’s Our Miami Public Spaces Challenge. We are super duper excited to be providing the training and tools to support Miami civic leaders in making human-scale interventions in their neighborhoods with the support and assistance of their neighbors.
You can map your ideas for public space on the Our Miami site, and ioby will make crowdfunding your great idea ridiculously simple and straightforward, not to mention accomplishable. We help leaders organize all the resources necessary to successfully change the world, one project at a time. All the Our Miami ideas that are currently crowdfunding are here.
How do we do this? Through personal interaction. At ioby, we stand for the opposite of NIMBY, supporting citizen-led, neighbor-funded change. ioby is a vehicle to make positive change quickly, through the use of our crowd-resourcing platform designed for people with great ideas to make their neighborhoods stronger and more sustainable. On ioby, anyone with a good idea can get more than just money. You can also recruit volunteers and share ideas with a likeminded community. And, in the NYC and Miami metro areas, ioby offers fiscal sponsorship for the majority of our projects – this means we handle the headache and hassle of accepting tax-deductible donations, empowering leaders to do what they do best.
During the Public Spaces Challenge we will offer four specialized fast-cash trainings in Miami, sharing 5 years of honed knowledge about running highly successful crowd-funding and crowd-resourcing campaigns and providing a clear and simple path to success spelled out in best practices. The trainings are on Wednesday, August 28, September 4, 11 and 18. Sign up here.