> For the complete documentation index, see [llms.txt](https://documentation.opencollective.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://documentation.opencollective.com/fiscal-hosts/funds-and-grants/understanding-funds.md).
# Understanding Funds
## What is a Fund?
A Fund is a profile built to pool a lump sum of money and distribute it to multiple recipients.
### Why set up a Fund
* **Visibility and credibility.** A named Fund signals that there's a dedicated source of support for a field or community, and that your company has real skin in the game.
* **Simplified invoicing.** You pay into one pot rather than juggling invoices with multiple recipients over time.
### Who hosts the Fund?
A Fund can be hosted directly by an organization or held by an external Fiscal Host.
An organization can turn on Fiscal Hosting and host their own fund, designating a set amount of money to distribute for a particular granting programme.
Some funds are hosted by External Fiscal Hosts.
Open Source Collective hosts several corporate Funds, each for a single organization wanting to support Open Source Software.
Examples:
* [Google Open Source Fund](https://opencollective.com/google)
* [Airbnb Fund](https://opencollective.com/airbnb)
* [Indeed Fund](https://opencollective.com/indeed)
Other Funds work as a way for multiple non-profits to pool money around a shared cause or topic, also hosted by an external Fiscal Host, e.g The Global Statelessness Fund hosted by Open Collective Europe Foundation.
## Why organizations use a Fund hosted by a Fiscal Host
For companies, the driver is often procurement: contracts, invoices, purchase order numbers, and approval chains, repeated every time you want to support a new project. That overhead doesn't scale when you're trying to support dozens or hundreds of small, often unincorporated projects.
A Fund solves this by letting you make **one payment into one pot**, held by whichever Fiscal Host administers your Fund, which then distributes the money out to the projects you want to support. You get the simplicity of a single invoice; if your projects are also hosted by a Fiscal Host, they can get money without needing their own legal entity, bank account, or tax paperwork.
The same structure works well for a group of non-profits pooling resources around a shared cause: instead of each organization managing its own separate disbursements, they contribute into one Fund and share the Fiscal Hosting fee.
## **Who can create a Fund?**
Funds need to be "hosted" by a Fiscal Host. So if you are a self-hosted Organization, you'll need to turn Fiscal Hosting on in your Advanced Settings.
Otherwise, all Fiscal Hosts on the Open Collective Platform can set up and use a Fund.
## **Who can Funds pay?**
Make contributions to a Collective's page on the Open Collective profile, selecting your Fund as the paying profile.
If a project you want to support isn't on Open Collective, that's not a blocker; you can still pay them by inviting them to submit an expense. It can pay any group, whether they are a company, have their own foundation, work with a different Fiscal Host, are entirely unincorporated, or are an individual.
## How is funding decided?
That's entirely up to you. Common approaches include:
* Using Open Collective's built-in **Request a Grant** feature, so projects can apply directly to your Fund, including all required information and payment details.
* Inviting grantees for an external grant program that already has its own selection process.
* Making the calls internally, with a private team that decides where the money goes and doesn't take open requests.
### Getting started
Jump into the details on the next page, [Funds](/fiscal-hosts/funds-and-grants/funds.md).
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