This article explains how a Fiscal Sponsorship Agreement with the Givinga Foundation can end, what notice is required, and what happens to your project's funds and assets when it does. It's based on the standard Model B Fiscal Sponsorship Agreement terms (Paragraphs 14, 17, and 18).
Ways an Agreement Can End
There are four paths out of a fiscal sponsorship relationship. Which one applies depends on who's initiating the exit and why.
1. Non-Renewal (Letting the Term Expire)
Your Agreement runs for an initial one-year term and then automatically renews for successive one-year terms — unless someone opts out.
- Notice required: At least 60 days' written notice before the end of the current term.
- Who can do this: Either the Fiscal Sponsor or the Sponsored Project.
- Best for: Planned, non-urgent transitions where both sides simply want the relationship to conclude naturally at the end of a term.
2. Voluntary Termination (Ending Early)
Either party can end the Agreement early, during the initial term or any renewal term, without needing a specific reason.
- Notice required: 30 calendar days' written notice to the other party.
- Who can do this: Either the Fiscal Sponsor or the Sponsored Project.
- Best for: Situations where the project is ready to move on before the term naturally expires — for example, once a successor sponsor or independent 501(c)(3) status is lined up.
3. Termination for Cause
The Fiscal Sponsor can also end the Agreement if specific compliance issues arise:
- Tax-exempt status risk: If the Fiscal Sponsor asks the project to stop an activity it believes jeopardizes the Foundation's tax-exempt status, and the project doesn't comply within 10 calendar days, the Agreement can be terminated.
- Uncured breach: If the Sponsored Entity fails to meet any obligation under the Agreement, the Fiscal Sponsor will provide written notice of the default. The project then has 15 calendar days to fix (cure) the issue before termination can proceed.
4. Dissolution of the Sponsored Entity
If the Sponsored Entity itself dissolves or otherwise ceases to exist, any remaining funds in its Account are directed to a 501(c)(3) organization of the Sponsored Entity's choosing.
How Notice Works
All notices under the Agreement must be in writing. Under Paragraph 15, a notice is considered officially received:
- Overnight courier: the date it's delivered
- Email: the date it's sent, as long as there's no bounce-back or error message
- Certified/registered mail: three business days after it's postmarked
If your mailing or email address changes, notify the other party in writing so notices reach the right place.
What Happens to Your Money and Assets
This is usually the biggest question when a sponsorship ends — and the Agreement lays out a clear process (Paragraph 17, "Successor Sponsor"):
- If the project continues and you find a new sponsor: Identify a Successor — another nonprofit that is (a) tax-exempt under IRC Section 501(c)(3), (b) not a private foundation under Section 509(a), and (c) willing to take on the sponsorship. Once a Successor is confirmed, the Fiscal Sponsor transfers the project's asset balance — and any associated liabilities — to that Successor as soon as administratively practicable, subject to any required third-party (e.g., funder) approvals.
- If your project obtains its own 501(c)(3) status: Once the IRS issues a determination letter confirming your exemption, your organization is automatically treated as a qualified Successor, and assets transfer to you directly.
- If you spin up a new organization: A newly formed entity that meets the same three qualifications above is also eligible to receive the project's assets and liabilities — again, once the IRS determination letter confirming its 501(c)(3) status is issued.
- If no Successor is found: The Fiscal Sponsor will work with the Sponsored Entity to allocate remaining assets and liabilities in a manner consistent with applicable law.
- If the Sponsored Entity dissolves: Remaining funds go to a 501(c)(3) organization chosen by the Sponsored Entity (Paragraph 18).
Important: All contributions received for the project are legally the assets of the Fiscal Sponsor while the sponsorship is active — they're restricted for use in support of the project, but they aren't the property of the Sponsored Entity until they're properly transferred through one of the paths above.
Ownership of Project IP
Separately from funds, intellectual property created in connection with the project (Appendix B) generally belongs to the Sponsored Entity, not the Fiscal Sponsor. During the sponsorship, the Fiscal Sponsor holds a limited, non-exclusive license to use that IP for project activities — and that license automatically ends when the Sponsored Entity disengages. No separate action is needed to reclaim IP rights at exit.
Quick Reference: Notice Periods
| Exit Path | Who Can Initiate | Notice Required |
|---|---|---|
| Non-renewal | Either party | 60 days before term ends |
| Voluntary early termination | Either party | 30 calendar days |
| Tax-exempt status non-compliance | Fiscal Sponsor | 10 calendar days to cure |
| Uncured breach | Fiscal Sponsor | 15 calendar days to cure after notice of default |
| Sponsored Entity dissolution | N/A (triggered by dissolution) | N/A |
Before You Start the Exit Process
If you're planning to leave fiscal sponsorship, it's worth lining up the following before sending formal notice:
- Confirmation of your Successor (new fiscal sponsor or your own 501(c)(3) status), if applicable
- Any funder or grantor approvals that may be required to transfer restricted funds
- A clear point of contact for written notices, per Paragraph 15
If you have questions about your specific timeline or balance transfer, contact the Givinga Foundation directly at projectsupport@givingafoundation.org — the Foundation will work with you through the Successor process described above.