Fiscal Sponsorship – Exit and Transfer of Assets
This post from the Neo Law Group’s blog, written in 2017 by Michele Berger, discusses the proper way to terminate a fiscal sponsorship agreement and transfer the project’s assets and liabilities if necessary.
Generally, having a fiscal sponsorship exit and transfer or termination agreement is a good practice to adopt. Typically, it should be an agreement signed by the sponsor, the successor, as well as the advisory committee of the project being transferred. In practice, the transfer of assets is a grant that the sponsor should ensure is made consistent with its 501(c)(3) purposes and with reasonable care consistent with the termination provisions of its fiscal sponsorship agreement. This is also true when the project is not being transferred, but rather is ending operations and the remaining assets are being granted out in furtherance of the project purposes by the sponsor to another organization.
The post covers vetting successors, holding back assets, transfers, liabilities, and more.
