I agree with MrMalph that starting off under the auspices of a fiscal agent can be very helpful to emerging nonprofits. It’s often a great way to get programs up and running without simultaneously needing to put extensive administrative and governance systems in place.

One suggestion I have to add would be to make sure that, early on, you clearly communicate (mutual) expectations regarding the kinds of reporting that each party will do (e.g., what sort of financial summaries will you get from the fiscal agent? what service reports will they expect from you? what sort of documentation do you need to submit/keep on file to justify requested payment or reimbursements?). Remember, too, that as a sponsored organization you would be acting on behalf of the fiscal agent, so will need to adhere to their policies and procedures (e.g., authorization of payments or approval of overtime pay, recruitment/hiring processes, drug-testing requirements, …), with which you should familiarize yourself in advance of any formal arrangement. Making sure everything is clear up front REALLY helps avoid conflicts and problems later on.

One caution I would offer would be to avoid the temptation to have the fiscal agent do all of the financial oversight. Just because they’re handling the bookkeeping and IRS filings doesn’t mean that the person(s) responsible for running the programs and services don’t also need to keep a timely eye on where the money’s going, and when and from where it’s coming in. I’ve seen problems arise when the program folks didn’t foresee the end of a significant funding stream (grant), relied on the fiscal agent to cover operating costs during a gap, and then couldn’t repay the amount advanced. This could have been avoided if the program people had been more aware of cash flow and revenue projections before the money ran out, instead of turning everything of a financial nature over to the fiscal agent (who I feel should also have foreseen this particular problem, by the way!). I’ve also seen sponsored organizations whose leaders keep an independent set of financial records (e.g., QuickBooks or even a simple spreadsheet) to compare with the fiscal agent’s periodic statements, in which case they were able to head off or address any discrepancies before they became problematic. Keeping a full set of financial records may not be necessary or even advisable (though it can set an organization up well for eventually weaning from the fiscal agent), but keeping an active and informed eye on financial transactions and reports is, in my experience, crucial. Even if someone else is also doing it for the sponsoring agency.

Wishing you much success!