Why Become a Fiscal Host?
Fiscal Hosts can help multiple Collectives to thrive by offering their legal status, a bank account and help with vital administration.
Fiscal Hosts provide a very valuable role for Collectives looking to make a difference.
By becoming a Fiscal Host, you can enable Collectives to accept and disburse money in full transparency, without the Collective having to apply for their own legal status and bank account. Collectives can then pursue their mission, be accountable to funders and automatically keep good records.
Fiscal Hosts offer support by acting as an umbrella organization for Collectives. The host:
Shares its status as a legal entity with the Collective, so they don't have to apply for their own
Holds the Collective's funds in its bank account
Often provides administrative support to the Collective, such as managing contributions and expenses, and handling tax filings, accounting, and compliance
In exchange, they often charge Collectives a fee, such as a percentage of incoming funds.
Fiscal Hosting is a big responsibility…
The Open Collective platform provides a suite of tools to help you manage admin and expenses more efficiently. However, you should be sure that you have the time, resources and expertise to do this before becoming a Fiscal Host.
You will be responsible for all activity passing through your bank account, as well as ensuring you and your Collectives are compliant with all relevant laws and requirements.
Who Becomes a Fiscal Host?
A number of different groups use the Fiscal Hosting model to achieve their goals, including:
Movements who want to host their various chapters or subgroups
Open Source projects hosting a range of unincorporated distributed collaborations
Decentralized organizations consisting of several semi-autonomous teams or projects
Meetup networks containing many local groups
Incubators or accelerators supporting early-stage teams
Advocates such as cooperatives, who want to help certain startup ventures to get going
Foundations that want to give grants to unincorporated projects
Some Fiscal Hosts may apply for charitable status to be eligible for tax-exemptions and/or grant funding. However, we recommend researching what is available in your location, and whether it matches your goals and mission.
Here are a few examples of some of these different types of Fiscal Host in action:
What you need to become a Fiscal Host
To set up a Fiscal Host, you need:
An established legal entity in the country where you plan to operate
A bank account
At least one admin to manage tasks (although we recommend having more than one)
You may also wish to set up an account with payment processors, including, Stripe, Wise and PayPal to use some of the features and automations on Open Collective. This can also be valuable for security.
As a Fiscal Host, you will need to carry out a range of tasks on behalf of your Collectives, including taxes, accounting, compliance, financial administration, and expense payments. So you will need to make sure you have the skills and capacity to do this effectively and accurately.
You will also be liable for all money flowing through your account. You will need to ensure that Collective transactions are legitimate and are not linked to money laundering or other illegal activities.
We strongly advise you to establish strong policies to decide which Collectives to accept, as the actions of one bad actor can impact all the Collectives you host.
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