Fiscal Hosting
Open Source Collective provides fiscal hosting services to open source projects and communities.
Fiscal hosting is when an organization holds funds on behalf of smaller projects (which we call collectives). Fiscal hosts often provide administrative services such as financial oversight and management.
We use the Open Collective platform to manage all financial transactions with the collectives we host. This platform enables us (OSC and the collective) to be transparent with our finances and it allows our collectives to administer their funds directly! Learn more.

Fiscal Sponsorship vs. Fiscal Hosting

“Fiscal sponsorship” and “fiscal hosting” mean exactly the same thing.
In the US, you will primarily hear the term “fiscal sponsorship,” but since Open Collective works with groups all over the world, we use the term “fiscal hosting” to be inclusive of a variety of similar international arrangements between sponsoring or hosting organizations and smaller groups they are working with.
One other term you may run into is “fiscal agent.” This term is often mistakenly used to refer to fiscal sponsors/hosts, but actually refers to a different type of legal arrangement.
Open Source Collective’s fiscal hosting services fit within the category of “comprehensive,” “direct,” or “Model A” fiscal sponsorship.
These terms describe situations where a project or group (what we call a collective) is legally part of a larger organization, the fiscal host. Through this relationship, collectives can transact financially without needing to legally incorporate.
💡 You can think of this type of fiscal host as a sort of “umbrella” organization.
As the fiscal host, we hold our collectives’ funds in our bank account and are responsible for taxes, accounting, legal compliance, and financial administration. While our hosted collectives have a great deal of autonomy within the bounds of our Terms, Open Source Collective ultimately is responsible for the oversight of collectives’ funds.

Choosing a fiscal host

Open Source Collective as a fiscal host

We encourage you to read through this guide (our Documentation), especially What We Offer, our Policies, and How to Apply before you join Open Source Collective.
Our services are great for a variety of community-focused and collaborative projects, but consider your long-term needs before selecting a fiscal host!

Other fiscal hosts on Open Collective

For some open source collectives, being hosted by a 501(c)(6) organization may not be the right fit.

Who can be a fiscal host?

Anyone can be a host - most entities are non-profit and these vary depending on where they are located.
They can be co-ops, C corps, LLCs, associations, trade unions, and more. The only limit is your imagination (and the law).
If you decide you want to start your own 501(c), you can still use the Open Collective Platform to organize your finances! Find out more about how to become a fiscal host.

Fiscal sponsors outside Open Collective

There are also fiscal sponsors that operate without the Open Collective platform. Some may be within your sector or offer different services that fit your specific needs. Before you move forward with another fiscal sponsor, make sure to consider whether they are aligned with your mission, whether their technology and processes are smooth and straightforward, and whether they are transparent to their donors and sponsored projects.
Ten Things to Look for in a Fiscal Sponsor - Transparency and Accountability Initiative

Starting your own organization

Founding your own entity comes with a significant cost, not only in terms of money, but in time and capacity.
Although we cannot offer legal or tax advice, it is wise to consider:
  • The costs of engaging a lawyer and accountant
  • Various filing fees at the state and federal level
  • Long term filings and responsibilities, including tax filings
All of this takes up time that could be spent directly on your project instead.
Open Source Collective takes care of all of that for you. We file taxes, provide receipts to supporters, manage banking and payments, and have lawyers and accountants on tap. You get access to the Open Collective platform and our legal entity as soon as we approve your application. You can get right to work.

Doing your work without a fiscal host

Some groups can “get by” without setting up a legal entity using individuals’ personal bank accounts. But there are downsides:
  • Lack of transparency
  • Unequal tax and admin burden on those individuals whose bank and PayPal accounts are used
  • If team relationships break down, or teammates burn out, the funds can become unavailable to the rest of the group
  • More limited access to grants or corporate sponsorship
When you join Open Source Collective, your group’s finances are totally transparent and the burden of administering your finances can be shared across the team. No one will have to include the group’s income on their personal taxes. Plus all of the other things we offer!