Becoming a Fiscal Host
By becoming a Fiscal Host, you can enable Collectives to accept and disburse money in full transparency, without the Collectives having to create their own legal entity and bank account. Collectives can then pursue their activities, be accountable to funders, and automatically keep good records.
Fiscal Hosts provide an umbrella structure for multiple Collectives to operate. If you only want to have a single Collective plugged into your own bank account, create an Independent Collective instead.
- Open source projects or similar unincorporated distributed collaborations
- Decentralized organizations with semi-autonomous teams or projects
- Movements with chapters or subgroups
- Meetup networks with many local groups under one umbrella
- Citizen groups in a geographical area
- Foundations that give grants to unincorporated projects
- Advocates who want to help certain startup ventures get going, such as cooperatives
- Incubators or accelerators supporting many early-stage teams
- Hosting a single Collective to enable transparent budgeting
- Have you looked into the tax implications in your country of being a fiscal sponsor?
- Have you thought about a system and policies for onboarding new Collectives?
- Do you have a Stripe and PayPal account set up, and a bank account to connect them to?
- Do you have admin capacity to validate and payout approved expenses for your Collectives?
As a Fiscal Host, you are responsible for the financial activity flowing through your bank account. You need to make sure that your Collectives are not doing money laundering or other nefarious activities. You don't want to open the door to just anyone to create a Collective under your umbrella. Think about some policies for determining whether a Collective is a good fit.
We give you the tools you need to manage applications by new Collectives. You can specify your policies on your host page, and if a Collective wants to join you'll get a notification with the option to approve them or not.
Open Collective is designed to make it easy to validate every expense as part of the two-step approval process. The first step is approval from the Collective admins, who check if the expense is a legitimate use of funds to further the project, and then it goes to the Fiscal Host admin to check that the paperwork is in order (like receipts) and nothing looks fishy. Only then do you actually pay out the funds.
To be a Fiscal Host, you need:
- A legal entity
- A bank account
- Payment processor merchant accounts (Stripe, Wise, PayPal), if you wish to use the integrations and automations which rely on them (optional)
- Someone to serve as admin (or multiple admins)
Open Collective is free for Collectives, and for Hosts who do not charge a Host Fee to the Collectives they Host. If you do opt to charge a Host Fee, then 15% of that revenue will be charged as the Platform Share. I.e, if you charge a 10% Host Fee and your Collectives bring in $1,000, Host Fees will be $100 and of that 15% ($15) goes to Open Collective.
This model is designed to keep fees low for users without revenue and share back with the platform from revenue created on the platform, enabling us to continue to build and improve Open Collective for everyone.