A 501(c)(3) cannot fiscally sponsor a 501(c)(7) social club because the IRS requires the sponsor to have full control over funds for charitable purposes. Since a (c)(7) exists for social activities, the missions clash. Passing funds through would risk the (c)(3)’s tax status.

However, a Model C Pre-Approved Grant Relationship can work. The (c)(3) grants funds to the (c)(7) for a specific charitable project that aligns with its mission. The (c)(7) must use the money strictly for that purpose and provide detailed reports to prove compliance. Strongly recommend consulting a nonprofit attorney to draft a proper agreement.