Readiness Factors for Model A Project Transitioning to Independent 501(c)(3)

501(c)(3) tax-exempt status is a legal designation that is provided to certain organizations by the Internal Revenue Service (IRS). 'Model A' fiscal sponsors don't just provide tax-exempt status to the projects they work with but also offer crucial back-office support infrastructure. When a project completes its 'Model A' fiscal sponsorship relationship, it's important for them to develop their capability to independently manage the nonprofit program and its resources. The sponsor and project leadership should review the following basic checklist provided by Social Impact Commons of items and determine what's needed to launch the project as an independent organization.

• Establish needed to launch the project as an independent organization.

• Incorporate/register under state laws

• Establish Board of Directors

• Receive 501(c)(3) determination from the IRS

• Set up a bank account

• Establish financial system

• Draft policies and procedures

• Procure finance and accounting supports

• Set up a payroll management system

• Establish contracting practices & templates

• Purchase insurance (General Liability, Directors & Officers, Ect.)