What is Fiscal Hosting?
What exactly is fiscal hosting and how does Open Source Collective do it?
Last updated
What exactly is fiscal hosting and how does Open Source Collective do it?
Last updated
lets your project access financial and legal infrastructure without needing to form your own legal entity. At Open Source Collective (OSC), we offer this service to projects, communities and funding initiatives focused on their code and community.
If your project is approved, OSC provides:
Fund management — we hold and manage the project's money providing you the tools to fundraise and create expenses.
Contribution processing — we manage third-party payment processors, like PayPal and Stripe, and handle things like refunds, chargebacks, and fraud prevention. We are also registered on vendor portals to receive funds from organizations like Meta, Google, Amazon, Intel, and others when an invoice for a donation is needed.
Payment processing — we process payments to your vendors and maintainers, including individuals and organizations located all over the world, navigating international currencies and compliance requirements.
Tax and legal compliance — we take care of tax filings, issuing receipts, and make sure everything meets nonprofit regulations.
Legal contract review — we draft, review and sign agreements on behalf of our hosted member projects.
Oversight and accountability — we ensure funds are used responsibly and in line with your project's open source work.
This setup allows you to dedicate more time to building your project and serving your community. Under the fiscal hosting model we’ve adopted, projects retain their autonomy. However, OSC remains responsible for financial oversight, ensuring that your funds are used in ways that support open source initiatives.
OSC uses the as our public financial ledger. This offers our hosted member projects a transparent, accessible, and real-time way to manage their funds.
Using this platform means:
Direct contributions — our hosted member projects can receive contributions directly via credit card, PayPal, and more — just share a direct link to your Open Collective profile to make it easy for supporters to donate to your project*.
Public visibility — anyone can see where money comes from and how its spent
Real time tracking and reporting — your balance updates instantly when contributions are received through the platform or expenses are paid.
Privacy Note: while transactions are publicly visible, private details (such as emails, names, and addresses) — are only visible to admins.
OSC is a U.S.-registered 501(c)(6) nonprofit that supports the infrastructure needs of open source projects. Unlike charity-based fiscal sponsors, which are typically 501(c)(3)s, our model works a bit differently. Here are a few key things to know:
Projects can hold funds outside of OSC
Unlike some fiscal hosts that require all project funds to stay in one account, OSC allows flexibility. We don’t have a “no outside money” policy, which means projects can hold funds in separate business entities. Keep in mind, this means OSC can only help you manage the funds we do hold on your behalf, nothing else.
Donations are not tax-deductible
Because we are a 501(c)(6), OSC is not a registered 501(c)(3) charity, donations to hosted member projects are not tax-deductible. This is consistent with IRS guidelines — open source donations aren't automatically classified as charitable just because they are FOSS.
If your project has a clear charitable purpose, a 501(c)(3) fiscal sponsor may be a good fit.
Not every project is a match for OSC. If your project doesn't fit within OSC's scope, other fiscal hosts may be a better fit. If you're considering other fiscal hosts, here are a few questions to ask:
Do they align with your project's mission?
Do their tools and processes support your needs?
Are they transparent to their donors and sponsored projects?
The platform also includes tools to help you engage with your community, share updates, set funding goals, and more. Learn more about what you can do on Open Collective
If you want to use the Open Collective platform but need a different fiscal host, you can that use the Open Collective platform to find one that better suits your project's needs.
Looking for more guidance? Check out from Tai Collaborative.