When is a Fiscal Sponsorship a “Mere Conduit”?
Most nonprofits are familiar with the fiscal sponsorship. Under these arrangements, a U.S. charity receives funds from a donor as a tax-deductible contribution on behalf of a non-exempt entity and then makes those funds available to the non-exempt entity or its designees to meet the legitimate expenses of a specified charitable project. But what if the fiscal sponsor is really just a pass-through? What if it automatically turns the money over to the non-exempt entity without