Excluded Expenses - Model C

For a Model C "pre-approved grant" fiscal sponsorship agreement, excluded expenses are costs that the fiscal sponsor (Social Good Fund) will not re-grant to the project because they are unrelated to the specific charitable purpose outlined in the agreement. SGF's discretion and control over the funds mean that expenses outside the defined scope are disallowed. Key types of excluded expenses in a Model C agreement include:

• Costs for unauthorized or non-charitable activities: The project cannot use grant funds for purposes that are not part of the agreement's stated charitable mission. Activities like political campaigning, private inurement (improper private benefit), and influencing legislation are generally prohibited.

• General operating expenses for the project's own entity: Since the project is a separate legal entity in a Model C arrangement, the fiscal sponsorship is not intended to cover the project's overall overhead, such as registration fees or filing costs. The project is expected to have sufficient operations to manage its own administrative workload. Incorporated nonprofit entities may be permitted to expend funds on general operating expenses.

• Expenses incurred before the agreement begins: A Model C agreement typically covers costs incurred from the date of the signed contract forward. The fiscal sponsor is unlikely to reimburse the project for any expenses incurred prior to the official start of the relationship.

• Costs without proper reporting: For the fiscal sponsor to maintain control and ensure compliance with its tax-exempt status, the project is required to report on the use of funds. If the project fails to provide the required written reports or substantiation for expenses, the costs may be rejected.

• Indirect costs not covered by the administrative fee: Fiscal sponsors charge an administrative fee, usually a percentage of the funds received, to cover their own overhead for managing the grant. Projects cannot pass on additional indirect costs or claim expenses that are meant to be covered by the sponsor's fee.

• Costs for which the project was already reimbursed: If the project has received reimbursement for a specific cost from another source, it cannot seek additional reimbursement from the fiscal sponsor for the same expense.

• Model C grantees may NOT donate to or regrant funds received from SGF to other entities without the express, prior approval of Social Good Fund.