September 17, 2024 • 27 mins
What if you could tap into funding typically reserved for non-profits—without having to start one yourself? Join CFA co-founders Indeana Underhill and Haeleigh Royall on the latest episode of the Cinematography for Actors podcast as they break down the ins and outs of fiscal sponsorship and what it means for filmmakers.
We’ll chat about how fiscal sponsorship can open doors to tax-deductible donations and grants, the challenges of setting up your own charity, and why teaming up with a 501c3 like CFA can make all the difference. Plus, we’ll dive into the key elements of a fiscal sponsorship agreement and why it’s such a powerful tool for securing grants.
We’ll also walk you through how to qualify for fiscal sponsorship with CFA, from the eligibility requirements to the application process. You’ll get practical tips on building online donation pages, leveraging CFA’s industry network, and keeping strong relationships with donors. We’ll even touch on how to balance donations with equity funding and what it takes to wrap up your project with a fiscal sponsor.
Visit our website to learn more!
https://www.cinematographyforactors.com/fiscal-sponsorship-program
For our listeners, CFA’s teamed up with We Make Movies to get you a discount on production management services, including access to comprehensive production insurance and workers' comp for your next shoot.
Visit wemakemovies.org/insurance and use code CFA23 on your intake form for 10% off your quote.
Calling all actors! Take 25% off your membership at WeAudition with code: CFA25
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Cinematography for Actors is a community aimed at bridging the gap between talent & crew through our weekly podcast & community events. Our weekly show supports the filmmaking community through transparent, honest & technically focused interviews with the goal of elevating the art of effective storytelling.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
A lot of people have donors, but they also have
investors, yes.
So with fiscal sponsorship, canthey fund their film using both
donations and equity?
Speaker 2 (00:11):
Yes, so you as a filmmaker are a for-profit
entity.
We as a charity are not.
We will only process charitablecontributions or donations
where there is an incentive,where people aren't going to get
a payback or percentage of netproceeds or revenue.
This is the Cinematography forActors podcast.
Speaker 1 (00:34):
More than a podcast.
Cinematography for Actors is avibrant community devoted to
bridging the gap between talentand crew.
Each week, our show offerstransparent, insightful
conversations with industryleaders.
We unveil the magic behind thescenes, from candid discussions
about unique filmmakingprocesses to in-depth technical
exploration.
Join us in unraveling theintricacies of filmmaking, one
(00:57):
episode at a time.
It's more than just cameras andlenses we aim to inspire,
educate and empower as we peelback the curtain on the art of
effective storytelling.
Now on to the episode.
Speaker 2 (01:09):
Hi everyone, and welcome back to another CFA
video of some sort.
I think this is also going tobe a podcast episode, just
because then you can consumethis material in any which way
you choose, whether through ourvideo channels or through our
podcast.
I am Indy Ann Underhill, one ofthe co-founders of CFA, and I'm
joined by my other co-founder,hayley Royal.
That's me, yay.
(01:29):
And we're here at CFA Studio inLos Feliz, california, to talk
about fiscal sponsorship, whichis the newest addition to our
501c3 charity that CFA now is.
Speaker 1 (01:40):
So, welcome to a talk on fiscal sponsorship we teased
this a few months back, but nowwe are fully ready.
We're here With our handbook,with our fiscal sponsorship
handbook, and we're ready totalk through it with you.
Speaker 2 (01:54):
Yes, okay, something really cool that happened that a
lot of people missed was thatwe did a panel on fiscal
sponsorship at Holly Shorts thisyear.
So I think now more than ever,we're excited to dive in,
because on that panel it wasHaley and I, but we also had our
treasurer Gabbo, and we alsohad Michael um from uh, who is a
financial advisor and is in inamazing in so many ways.
(02:16):
So let's dive into what fiscalsponsorship is one-on-one Um,
because I think there are a lotof filmmakers that don't know
that this isn't even an option.
Speaker 1 (02:24):
That's what we learned at Holly Shorts.
There were so many people whojoined our panel and had no idea
that it was even a thing Likethe questions afterward.
You know, we didn't want to gotoo light, but there were so
many people who came up to usafter the panel and said what
even is this Like?
I didn't even know this existedand wanted to set up meetings
just to talk about that.
It's a possibility.
(02:45):
So we think that it'll be areally cool thing to introduce
this as a possibility to peoplewho don't even know what it is
and then tell you about ourprocess and how our process will
differ from other organizationsout there that can offer fiscal
sponsorship and how it's goingto benefit you.
Uh, building, building yourproduct.
Speaker 2 (03:08):
So fiscal sponsorship in a nutshell, and we're going
to follow our handbook a littlebecause, um, you can email us
for this or you can access it onour website under resources, um
, but we're going to follow thisquite closely so that you can
follow along if you have it withyou.
If not, you can reference itlater.
Um, let's open it up, hayley,one of the things that's most
important is to understand whatphysical sponsorship is,
(03:28):
obviously.
So I would put this underalternative financing methods.
That's what we put it under forHolly Shorts, and what that
means is that now you are ableto access tax-deductible
donations and grants fundingthat normally can only be
accepted by a charity because,as a filmmaker, your project or
your production company orcommunity you're building can
(03:49):
now go under us as an umbrellafor a short term.
So it's a defined contract witha beginning date and an end
date, so that anytime withinyour contract terms you can
accept tax-deductible donationsfor your project.
Speaker 1 (04:02):
Which means you don't have to incorporate your own
501c3.
Yes, because, although it'spossible, if you're doing a
short-term project like a film,it sometimes can take up to a
year and a half to get a 501c3approved.
So it just isn't tenable for alot of projects.
(04:23):
So it's better to find a fiscalsponsor so that you can accept
those tax-deductible donationsand grants.
Speaker 2 (04:29):
Yeah, absolutely.
And one of the most horriblethings about this process for
filmmakers if you were to startyour own charity is the amount
of legal and financial burdenthat you would have at the end
of the year.
So instead, your fiscal sponsorhandles that, which is great.
Yeah, there's a lot ofcompliance, a lot of compliance.
(04:49):
So your fiscal sponsor this iswe're saying your, because
obviously CFA can be your fiscalsponsor and you can apply for
our website.
However, I don't want this tojust be about CFA.
This should be education andcontext for you as a filmmaker,
and so that's why we wanted todo an overview and so let's dive
in.
Yeah, what?
Speaker 1 (05:08):
are the things that you can expect to receive with
fiscal sponsorship, taxdeductible contributions.
Speaker 2 (05:15):
So now, people who are instead of donating to a
specific charity that they havein mind, they can also donate to
your film, which is now acharity.
Under a 501c3 organization likeCFA, you can apply for grants,
the majority of grants there aresome outliers, but the majority
of grants actually have yourequired, you're required to
(05:37):
have a fiscal sponsor and youneed a letter of support, and so
your fiscal sponsor can act asthat letter of support and the
umbrella in which you acceptgrant money.
The thing to realize and we'regoing to dive into funding, but
the thing to realize is that thepool of money that's being
donated has to be addressed tothat charity in order for it to
be accepted as tax deductible.
(05:58):
So if your film was called Ihave a Cat you know I love cats
If it's called I have a cat andyou need to raise $40,000, the
$40,000 you raise has toactually be addressed to your
fiscal sponsor.
That then gets dispersed intoyour account separately.
So your fiscal sponsor or us,we act as the middle person in
(06:18):
that transaction, as long as youmeet our mission.
And what is our mission, haley?
Speaker 1 (06:24):
Our mission is empowering underrepresented and
emerging filmmakers.
Speaker 2 (06:29):
Exactly so.
If you are in the category ofemerging or underrepresented, or
both, then you are eligible tosubmit your project through an
application process, and thatvaries based off of the missions
of different fiscal sponsors,obviously, but that's something
you want to check on theirwebsite, but that's ours.
Speaker 1 (06:48):
We have an application fee, as all other
fiscal sponsors All almost all,all the ones that we've seen
have an application fee.
That comes with theirapplication process.
That comes with theirapplication process Because part
of the ethos of CFA is makingthings more accessible and
(07:10):
making that barrier to entrylower our application fee.
It will be about half of whatyou'll see out there.
I also wanted to talk about thethings that you can expect to
get through fiscal sponsorshipwith us.
In particular, everyorganization has different
things that will come along withyour fiscal sponsorship.
Some can do, you know,mentoring, or there are
(07:30):
networking events that they'llthrow specifically for the
people they're sponsoring, orevents and training and things
like that.
For with us, what happens isyou will end up with a
purpose-built webpage that is adonation page, so it'll be
connected to the donor box andpeople will be able to click on
a link that you send them, seeyour page and everything about
(07:51):
your film and then just donatethrough that page instead of
having to send them to manydifferent places.
So it's a lot like if you werecrowdfunding you would just put
a link out.
It's very similar, yeah, andmakes it makes it easy, and we
built that for you, so that kindof takes some of that work off
of your plate.
And then I wanted to take aminute to talk about the things
(08:13):
that you can expect throughfiscal sponsorship with us
specifically.
Like I said, there are a lot oforganizations that have a lot to
offer.
You can get things that comewith your fiscal sponsorship
that range from a mentorshipmeeting or big networking events
(08:34):
that are just for the sponsees.
For us, since we're a smallerorganization, we offer a more
tailored approach to what youneed.
We can take on fewer projectsat a time, so it means that
you're going to be workingdirectly with Indy and myself.
What you can do through fiscalsponsorship with us, like all
(08:55):
fiscal sponsors, is apply forthe grants that you wouldn't be
able to apply for without a501c3 supporting you, and you
can receive tax-deductibledonations.
That's true for all fiscalsponsors.
You'll be able to fund yourproject through a customized
(09:17):
online donation page.
That is something that we buildfor you here at CFA.
It's a page just like if youwere crowdfunding.
You would build a page through,you know, like Seed&Spark or
GoFundMe, and then you would putthat link out there and have
people go there to donate.
It's a lot like that, exceptit's not crowdfunding, it's.
Any of your donors will be ableto go to that page.
(09:37):
It'll have information aboutyour project and a donation
button that is linked to yourdonor box that is specific for
your project.
We built that for you so thattakes some of that work off of
your plate.
You will gain access to ournetwork of industry
(09:58):
professionals and resources.
So if you needed to reach outto us and ask if we knew a sound
mixer or if we had arelationship with a certain
(10:20):
rental company, being sponsoredby us means that we can will
know you personally, becausewe're such a small organization
and we're working so closelywith each of your projects.
We'll know what you need andwho you need to be in contact
with.
So some of those things youwon't even need to come to us
for first.
We'll be able to just connectyou because we know what's up.
(10:42):
You'll also benefit fromsustained support throughout the
project lifecycle, like I said,because we know what's up.
You'll also benefit fromsustained support throughout the
project lifecycle, like I said,because we're going to be here
with you from the beginning ofpre-production until we close
out the project with you as ateam.
Now I'm going to walk youthrough the application process
for us.
It varies everywhere.
Every organization has theirown way.
(11:04):
You can look on their websitesto find out.
Ours is also available to readthrough on the website, but
while I'm sitting here with you,I'll talk about it with you.
So the types of projects thatare eligible are organizations,
communities, film projects,which include documentaries,
feature films and short filmsthat fit within our mission.
(11:28):
Our mission is quite broad andthat's because we want to make
sure that things are accessiblefor our community.
So we are working to empowerunderrepresented and emerging
filmmakers.
So if you fall into thatcategory, your project probably
fits.
Speaker 2 (11:47):
So I'm back, but she's right, it's broad and it's
great because it means we canhelp the most amount of
filmmaking teams.
And we love most of you, I'mjust kidding.
We love all of you, so it'sgreat that we can help everyone.
We have some exciting news.
Cfa has teamed up with we MakeMovies to get you a discount on
production management services,including access to
(12:07):
comprehensive productioninsurance and workers comp for
your next shoot.
Visit WeMakeMoviesorg, slashinsurance and use code CFA23 on
your intake form for 10% offyour quote.
Speaker 1 (12:23):
Yeah, projects that align with our mission and
values are the projects that wecan accept.
And because every applicationis reviewed personally by
Indiana and myself, we get toknow your project inside and out
and we know exactly how italigns with our mission.
Speaker 2 (12:36):
And what's great about it is because it's I call
it boutique, because we're tinyand we're growing, but we're
able to handle a lot with ouramazing team.
But the best part is when we'rereading through your projects,
we know who you might want to beconnected with.
So when you come to us wanting asound designer, or if you
haven't thought about somethingwe might be like, have you
reached out to this person whodid a film similar?
(12:57):
Or they had a festival plan forthis horror that was similar?
We love being involved and welove being able to facilitate
those connections, in additionto the charitable donations
going into your account.
So that's what's just so funabout being able to be fiscal
sponsors for these projects.
Yeah, the minimum amount toapply for our fiscal sponsor
program and this varies so youwant to check this on the
(13:18):
websites of other fiscalsponsors but the minimum rate
that we need you to raise forbudget is $10,000.
And that's because there's alot of admin and legal setup
required in order to facilitatethose donations, and so anything
below $10,000, it's not reallyworthwhile for either you or for
us to facilitate thattransaction and, in addition,
(13:39):
you need to have a prettyfeasible plan on how you're
going to shoot it, how you'regoing to distribute it and how
you're marketing that.
Speaker 1 (13:44):
All of that's obviously covered in the
application when we review it so, once you apply, what happens
is you send your application tous or any organization, and then
that application will bereviewed.
Speaker 2 (14:00):
One thing to mention is a lot of our teams apply with
pre-production in mind, and sothey haven't actually shot yet.
However, we do have a fewprojects that are in current
production, looking to raise fora second round, or are in post
because they need additionalfunding for VFX or color or
festival distribution or somesort of strategy in post
(14:22):
festival distribution or somesort of strategy in post.
Speaker 1 (14:23):
So then, once you finish your application process,
if all of the detailed plansand things are met and we decide
it's a great project for us totake on, you will get an
acceptance email.
It'll be exciting.
Speaker 2 (14:36):
So your acceptance email covers the financial
agreement, so the fiscalsponsorship agreement that
you'll have to sign.
You'll have to sign up to ourmember portal in order to access
a blank W-9, the fiscalsponsorship handbook and all of
the forms, like disbursement offunds requests, as well as
setting up our bank accountlinked to yours.
And all of the other forms thatneed to be filled out will be
(14:58):
based off of our website portalthat you'll have access to.
Now, depending on the type ofproject you applied with, you'll
have a specific ID that weallocate that you'll be used for
all of the future communicationand the disbursement of funds,
so that'll be your project IDspecifically.
Now, the biggest thing is, oncewe accept a project, we then
(15:18):
have to set up all of themethods in which your funders or
donors can donate andcontribute to your project.
So once you receive thosedocuments, we then go into
setting it up on our end, sothat makes all of the actual
financial obligation on us a loteasier to send out to your
prospective donors so they candonate through checks, ach
(15:39):
transfers, online donations,stock contributions which is a
really interesting one as wellas matching gifts.
A lot of that information isavailable on our website on how
that can be done and within ourhandbooks you can look further
into that.
But there's a variety of waysthat people can donate.
I think stock is the mostinteresting.
(15:59):
We haven't seen it done yet, soI'm very excited about that.
But if you think about it, it'sa way of having people who have
been sitting on a stock for avery long time and don't want to
pay taxes on the profit they'vemade actually donating that to
you, and then we convert thatand cash out on the day we
receive it so that we're notplaying the market or anything
like that.
Yeah, I think that's importantto say yeah, and we actually do
(16:21):
it through DonorBox.
So, yes, we are responsible forthe intake of your donations
and providing donation receiptsabove $250.
That's just because of tax code.
Anything below $250, we don'trequire.
You don't require a donationreceipt for that donor.
So anything above $250 isprovided a receipt and then we
(16:43):
go that goes into our accountand then you can disperse your
funds in however many incrementsyou'd like once you request it.
Beyond what we're responsiblefor as the middle person there
in the intermediary, you'reresponsible, obviously, for
setting up your crowdfunding,reaching out to your private
network.
We do not solicit donations foryou.
(17:03):
We are just the carrier and themethod in which we can accept
them for you.
So just keep that in mind.
And that's pretty standard forall fiscal sponsors.
One of the biggest things youneed to keep in mind when
applying for fiscal sponsorshipis the percentage they take out
of your donations.
The standard rate is 5% to 7%.
Cfa Institute is on the 5%level.
Anything above or below that, Ibelieve, should be a little
(17:27):
iffy, especially when it's inthe above 7%.
We have a lot of FAQs in ourhandbook, and that's because
there's a lot of things that youneed to know when starting as a
fiscal sponsor and sponsoree,and one of the things I want to
make clear is that, for thepurposes of CFA Institute, any
charitable contributions must befrom US-based or US or donors
(17:52):
with taxable income in theStates.
That's really important.
So you could be in Canada oryou could be in the UK, but your
donor has to have US taxableincome, as we are a US charity,
american charity, in 501c3.
So it wouldn't be taxdeductible if it's.
I'm Canadian originally, so ifit was Canadian income only,
they wouldn't be able to filethat at the end of the year
(18:13):
because we're not currently aCanadian entity, right?
Speaker 1 (18:17):
Yes, and I wanted to talk a little bit about, um, why
you can't just accept adonation from someone you know
like.
Of course, anyone can give youmoney and if they're like, oh, I
don't care about this money, Idon't need it back, that's fine.
But in order for them to writeit off on their taxes, they need
(18:38):
to have the donation receiptthat is provided to them by a
fiscal sponsor that has the EINof a 501c3 on it, or else it
doesn't count as a charitabledonation.
So that's why it's necessarythat you have a 501c3 supporting
you, or your own 501c3 toaccept tax deductible donations.
Speaker 2 (19:00):
Yeah, and one of the things you want to look at when
applying for fiscal sponsorshipto many programs or interviewing
is asking their turnaround timefrom application to possible
acceptance, because that'll varybased on the scale of the
corporation or the company.
So we say around 7 to 10business days, because as we get
busier, I imagine that that'sjust going to go up.
(19:21):
However, currently we'reexperiencing like a one to five
day turnaround for setting upprojects, which is great.
One of the questions we alwaysget is what is the best time of
year that I should be filming orfunding, at least for my
project, and does it make adifference when I'm asking for
charitable contributions?
This would obviously dependdonor to donor and project to
project.
However, one of the things youneed to keep in mind is tax
(19:43):
season and when that is so inApril, and know when that fiscal
year ends for each donorspecifically, and also if you're
going to be applying for anindividual specific donor or a
company, because they both fallon different calendars for when
taxes are due for them.
Speaker 1 (20:01):
Different fiscal calendars.
There's also the idea there area lot of organizations that
solicit donations in adevelopment period around the
holidays.
There is a lot of holiday giftgiving from people who are
(20:21):
generally giving money tocharity.
So it is a person-to-personbasis, of course, but I think
you are more likely to run intosomeone who's like oh, I already
gave away all my gifts duringthe holidays, so earlier in the
year you may be able to get inthere and get some of that gift
(20:43):
before they give it to theirfavorite charity.
Speaker 2 (20:45):
Yeah.
And on the opposite side ofthat you can argue I think you
know playing devil's advocatethat at the end, closest to when
they're doing taxes, they mightfind that they didn't give away
all of their the ability forthe charitable contributions
based off of their householdincome and their percentage
they're able to donate.
Speaker 1 (21:00):
So, like February is a good time to sweep up the
leftovers, sure, yeah.
Speaker 2 (21:06):
But I would say, like have, the most important thing
about our industry, regardlessof fiscal sponsorship, is having
long term relationships withpeople and not just asking for
one off.
So I think having check ins,like knowing I'm going to if I
was going into production, youknow, in November, having that
check in as early as possible,knowing I'm going into November
and checking in being like, hey,I'm going to start, you know,
(21:28):
fundraising soon.
I'm going to have a fiscalsponsor.
That means that you can have acharity, like a tax deductible
write-off, so please keep me inmind and maybe, like reserve
some funds that would be awesomebecause I know you were
interested in supporting me andthen a few months later, when
you have it set up with yourfiscal sponsor, you can go back
to them and say, hey, I'm ready,I have fiscal sponsorship.
Can you do an online donationof X amount to support my
(21:50):
project?
So I think those annualcheck-ins or those quarterly
check-ins are a really great wayof not only building your
relationship up as a filmmakerand throughout your career, but
it keeps you on track to beaccountable for what your
projects are doing and not just,and also it makes you look more
professional, because you're onit and you know your deadlines
and your production schedulesalso that that donor will be
(22:11):
thinking of you because they'reseeing what you're doing a lot
so they'll be keeping you inmind when they're making other
donations.
Speaker 1 (22:18):
Correct, a lot of people have donors, but they
also have investors, yes, yes.
So with fiscal sponsorship, canthey fund their film using both
donations and equity.
Speaker 2 (22:32):
Yes.
So you as a filmmaker are afor-profit entity.
We as a charity are not.
We will not take equity, wewill not take investment and
process that.
We will only process charitablecontributions or donations
(22:52):
where there is an incentive,where people aren't going to get
a payback or percentage of netproceeds or revenue.
So that means, yes, you as yourown person and team and
filmmaking production company,whether it's an LLC, an S-corp
or a C-corp, you can solicitequity, investment and deal with
the cap table over there.
We will only deal withcharitable contributions.
So we don't accept them.
Speaker 1 (23:13):
But yes, you as a filmmaker are able to do both
equity and donor, and we don'teven need to know or want to
know about your equityinvestment.
Yeah, we won't handle it justbecause we're a charity, so a
lot of people also areconsidering having a fiscal
sponsor and also crowdfunding,which is something you can do.
(23:39):
There are rules around it andthere are percentages around it
that you should consider,because, depending on how much
you're expecting to raise, itmay change your decision.
Speaker 2 (23:45):
Yeah.
So in addition to our 5% fee ora fiscal sponsor fee, whatever
they set it as you're obviouslypaying to the crowdfunding
platform, so you just want tokeep in mind how much of that
percentage of your budget isgoing to other platforms.
Obviously, we act as an onlinedonation portal, so if it's
because you're worried about amethod in which you're accepting
(24:07):
donations, your fiscal sponsorshould be able to handle all of
those things, because that'swhat you're signing on to.
Crowdfunding is a really greatthing in order to just promote
your website and your film andif you have a goal to reach, or
you want to give something inreturn and send out newsletters
to everybody that sign up andare your crowdfunders.
(24:27):
But it's just something toconsider because of the large
amount of your budget thatyou're saying that you're going
to be giving away.
Also, fair market value issomething that you need to keep
in mind If you're saying you'regoing to give someone something
tangible or a value back.
Speaker 1 (24:41):
Like a poster or a keychain or a DVD.
Speaker 2 (24:45):
Yeah, or a Blu-ray I should say, I guess DVD Then you
have to deduct the cost of thatgood off of the donation, so
you're not actually getting thefull donation amount.
So that's just something tokeep in mind and that's called
fair market value.
Speaker 1 (25:01):
So if you're like, if you donate $10, you get this
enamel pin, but if the enamelpin, if the fair market value of
that enamel pin is $2, thenthey only get a donation receipt
for $8.
Speaker 2 (25:14):
Correct and we don't issue donation receipts unless
they're $250.
So if you say, for $250 donorsor $500 donors, you're going to
give them a ticket to thepremiere and a DVD and a t-shirt
and all of that costs youaround $100, $125.
You have to subtract that $100or $125 off of the full donation
(25:36):
in order to then claim thatdonation.
So keep that in mind, don'tforget.
Yeah, fair market value andthat's what's tax deductible at
the end of the day.
Speaker 1 (25:46):
So at the end of your project you do have to end your
relationship with us Not really.
You can always be part of ourcommunity.
We will want that.
But there is going to be aformal closure of the project
with us.
There's a form on the websitethat you'll fill out.
We'll kind of go througheverything that happened and
(26:07):
make sure that the reports arein line and make sure that all
the taxes that need to behandled on our end, all the
forms on our end, thateverything's ready to go, and
then we say goodbye and we closeyour account.
Speaker 2 (26:20):
Closing your account in closing your account.
Speaker 1 (26:23):
In closing your account, any funds that are left
over are given to you as well.
So if you came in under budgetor you raised a little more, um,
we still will only keep thatfive percent.
Speaker 2 (26:35):
You will receive all of the funds that you raise
above yeah, and for anyquestions you can reach out to
us at contact atcinematographyforactorscom, and
you can also look on our website.
Thanks everyone, thanks forThanks for joining us.
Bye.
Speaker 3 (26:47):
Join us in bridging the gap between talent and crew.
Start by subscribing on yourpreferred podcast platform.
Sign up for our newsletter tostay up to date on vendor
discounts, community events andnew podcast releases, and
educate yourself through ourfree course releases on YouTube.
It all starts atcinematographyforactors.
A lot of people have donors, but they also have
investors, yes.
So with fiscal sponsorship, canthey fund their film using both
donations and equity?
Speaker 2 (00:11):
Yes, so you as a filmmaker are a for-profit
entity.
We as a charity are not.
We will only process charitablecontributions or donations
where there is an incentive,where people aren't going to get
a payback or percentage of netproceeds or revenue.
This is the Cinematography forActors podcast.
Speaker 1 (00:34):
More than a podcast.
Cinematography for Actors is avibrant community devoted to
bridging the gap between talentand crew.
Each week, our show offerstransparent, insightful
conversations with industryleaders.
We unveil the magic behind thescenes, from candid discussions
about unique filmmakingprocesses to in-depth technical
exploration.
Join us in unraveling theintricacies of filmmaking, one
(00:57):
episode at a time.
It's more than just cameras andlenses we aim to inspire,
educate and empower as we peelback the curtain on the art of
effective storytelling.
Now on to the episode.
Speaker 2 (01:09):
Hi everyone, and welcome back to another CFA
video of some sort.
I think this is also going tobe a podcast episode, just
because then you can consumethis material in any which way
you choose, whether through ourvideo channels or through our
podcast.
I am Indy Ann Underhill, one ofthe co-founders of CFA, and I'm
joined by my other co-founder,hayley Royal.
That's me, yay.
(01:29):
And we're here at CFA Studio inLos Feliz, california, to talk
about fiscal sponsorship, whichis the newest addition to our
501c3 charity that CFA now is.
Speaker 1 (01:40):
So, welcome to a talk on fiscal sponsorship we teased
this a few months back, but nowwe are fully ready.
We're here With our handbook,with our fiscal sponsorship
handbook, and we're ready totalk through it with you.
Speaker 2 (01:54):
Yes, okay, something really cool that happened that a
lot of people missed was thatwe did a panel on fiscal
sponsorship at Holly Shorts thisyear.
So I think now more than ever,we're excited to dive in,
because on that panel it wasHaley and I, but we also had our
treasurer Gabbo, and we alsohad Michael um from uh, who is a
financial advisor and is in inamazing in so many ways.
(02:16):
So let's dive into what fiscalsponsorship is one-on-one Um,
because I think there are a lotof filmmakers that don't know
that this isn't even an option.
Speaker 1 (02:24):
That's what we learned at Holly Shorts.
There were so many people whojoined our panel and had no idea
that it was even a thing Likethe questions afterward.
You know, we didn't want to gotoo light, but there were so
many people who came up to usafter the panel and said what
even is this Like?
I didn't even know this existedand wanted to set up meetings
just to talk about that.
It's a possibility.
(02:45):
So we think that it'll be areally cool thing to introduce
this as a possibility to peoplewho don't even know what it is
and then tell you about ourprocess and how our process will
differ from other organizationsout there that can offer fiscal
sponsorship and how it's goingto benefit you.
Uh, building, building yourproduct.
Speaker 2 (03:08):
So fiscal sponsorship in a nutshell, and we're going
to follow our handbook a littlebecause, um, you can email us
for this or you can access it onour website under resources, um
, but we're going to follow thisquite closely so that you can
follow along if you have it withyou.
If not, you can reference itlater.
Um, let's open it up, hayley,one of the things that's most
important is to understand whatphysical sponsorship is,
(03:28):
obviously.
So I would put this underalternative financing methods.
That's what we put it under forHolly Shorts, and what that
means is that now you are ableto access tax-deductible
donations and grants fundingthat normally can only be
accepted by a charity because,as a filmmaker, your project or
your production company orcommunity you're building can
(03:49):
now go under us as an umbrellafor a short term.
So it's a defined contract witha beginning date and an end
date, so that anytime withinyour contract terms you can
accept tax-deductible donationsfor your project.
Speaker 1 (04:02):
Which means you don't have to incorporate your own
501c3.
Yes, because, although it'spossible, if you're doing a
short-term project like a film,it sometimes can take up to a
year and a half to get a 501c3approved.
So it just isn't tenable for alot of projects.
(04:23):
So it's better to find a fiscalsponsor so that you can accept
those tax-deductible donationsand grants.
Speaker 2 (04:29):
Yeah, absolutely.
And one of the most horriblethings about this process for
filmmakers if you were to startyour own charity is the amount
of legal and financial burdenthat you would have at the end
of the year.
So instead, your fiscal sponsorhandles that, which is great.
Yeah, there's a lot ofcompliance, a lot of compliance.
(04:49):
So your fiscal sponsor this iswe're saying your, because
obviously CFA can be your fiscalsponsor and you can apply for
our website.
However, I don't want this tojust be about CFA.
This should be education andcontext for you as a filmmaker,
and so that's why we wanted todo an overview and so let's dive
in.
Yeah, what?
Speaker 1 (05:08):
are the things that you can expect to receive with
fiscal sponsorship, taxdeductible contributions.
Speaker 2 (05:15):
So now, people who are instead of donating to a
specific charity that they havein mind, they can also donate to
your film, which is now acharity.
Under a 501c3 organization likeCFA, you can apply for grants,
the majority of grants there aresome outliers, but the majority
of grants actually have yourequired, you're required to
(05:37):
have a fiscal sponsor and youneed a letter of support, and so
your fiscal sponsor can act asthat letter of support and the
umbrella in which you acceptgrant money.
The thing to realize and we'regoing to dive into funding, but
the thing to realize is that thepool of money that's being
donated has to be addressed tothat charity in order for it to
be accepted as tax deductible.
(05:58):
So if your film was called Ihave a Cat you know I love cats
If it's called I have a cat andyou need to raise $40,000, the
$40,000 you raise has toactually be addressed to your
fiscal sponsor.
That then gets dispersed intoyour account separately.
So your fiscal sponsor or us,we act as the middle person in
(06:18):
that transaction, as long as youmeet our mission.
And what is our mission, haley?
Speaker 1 (06:24):
Our mission is empowering underrepresented and
emerging filmmakers.
Speaker 2 (06:29):
Exactly so.
If you are in the category ofemerging or underrepresented, or
both, then you are eligible tosubmit your project through an
application process, and thatvaries based off of the missions
of different fiscal sponsors,obviously, but that's something
you want to check on theirwebsite, but that's ours.
Speaker 1 (06:48):
We have an application fee, as all other
fiscal sponsors All almost all,all the ones that we've seen
have an application fee.
That comes with theirapplication process.
That comes with theirapplication process Because part
of the ethos of CFA is makingthings more accessible and
(07:10):
making that barrier to entrylower our application fee.
It will be about half of whatyou'll see out there.
I also wanted to talk about thethings that you can expect to
get through fiscal sponsorshipwith us.
In particular, everyorganization has different
things that will come along withyour fiscal sponsorship.
Some can do, you know,mentoring, or there are
(07:30):
networking events that they'llthrow specifically for the
people they're sponsoring, orevents and training and things
like that.
For with us, what happens isyou will end up with a
purpose-built webpage that is adonation page, so it'll be
connected to the donor box andpeople will be able to click on
a link that you send them, seeyour page and everything about
(07:51):
your film and then just donatethrough that page instead of
having to send them to manydifferent places.
So it's a lot like if you werecrowdfunding you would just put
a link out.
It's very similar, yeah, andmakes it makes it easy, and we
built that for you, so that kindof takes some of that work off
of your plate.
And then I wanted to take aminute to talk about the things
(08:13):
that you can expect throughfiscal sponsorship with us
specifically.
Like I said, there are a lot oforganizations that have a lot to
offer.
You can get things that comewith your fiscal sponsorship
that range from a mentorshipmeeting or big networking events
(08:34):
that are just for the sponsees.
For us, since we're a smallerorganization, we offer a more
tailored approach to what youneed.
We can take on fewer projectsat a time, so it means that
you're going to be workingdirectly with Indy and myself.
What you can do through fiscalsponsorship with us, like all
(08:55):
fiscal sponsors, is apply forthe grants that you wouldn't be
able to apply for without a501c3 supporting you, and you
can receive tax-deductibledonations.
That's true for all fiscalsponsors.
You'll be able to fund yourproject through a customized
(09:17):
online donation page.
That is something that we buildfor you here at CFA.
It's a page just like if youwere crowdfunding.
You would build a page through,you know, like Seed&Spark or
GoFundMe, and then you would putthat link out there and have
people go there to donate.
It's a lot like that, exceptit's not crowdfunding, it's.
Any of your donors will be ableto go to that page.
(09:37):
It'll have information aboutyour project and a donation
button that is linked to yourdonor box that is specific for
your project.
We built that for you so thattakes some of that work off of
your plate.
You will gain access to ournetwork of industry
(09:58):
professionals and resources.
So if you needed to reach outto us and ask if we knew a sound
mixer or if we had arelationship with a certain
(10:20):
rental company, being sponsoredby us means that we can will
know you personally, becausewe're such a small organization
and we're working so closelywith each of your projects.
We'll know what you need andwho you need to be in contact
with.
So some of those things youwon't even need to come to us
for first.
We'll be able to just connectyou because we know what's up.
(10:42):
You'll also benefit fromsustained support throughout the
project lifecycle, like I said,because we know what's up.
You'll also benefit fromsustained support throughout the
project lifecycle, like I said,because we're going to be here
with you from the beginning ofpre-production until we close
out the project with you as ateam.
Now I'm going to walk youthrough the application process
for us.
It varies everywhere.
Every organization has theirown way.
(11:04):
You can look on their websitesto find out.
Ours is also available to readthrough on the website, but
while I'm sitting here with you,I'll talk about it with you.
So the types of projects thatare eligible are organizations,
communities, film projects,which include documentaries,
feature films and short filmsthat fit within our mission.
(11:28):
Our mission is quite broad andthat's because we want to make
sure that things are accessiblefor our community.
So we are working to empowerunderrepresented and emerging
filmmakers.
So if you fall into thatcategory, your project probably
fits.
Speaker 2 (11:47):
So I'm back, but she's right, it's broad and it's
great because it means we canhelp the most amount of
filmmaking teams.
And we love most of you, I'mjust kidding.
We love all of you, so it'sgreat that we can help everyone.
We have some exciting news.
Cfa has teamed up with we MakeMovies to get you a discount on
production management services,including access to
(12:07):
comprehensive productioninsurance and workers comp for
your next shoot.
Visit WeMakeMoviesorg, slashinsurance and use code CFA23 on
your intake form for 10% offyour quote.
Speaker 1 (12:23):
Yeah, projects that align with our mission and
values are the projects that wecan accept.
And because every applicationis reviewed personally by
Indiana and myself, we get toknow your project inside and out
and we know exactly how italigns with our mission.
Speaker 2 (12:36):
And what's great about it is because it's I call
it boutique, because we're tinyand we're growing, but we're
able to handle a lot with ouramazing team.
But the best part is when we'rereading through your projects,
we know who you might want to beconnected with.
So when you come to us wanting asound designer, or if you
haven't thought about somethingwe might be like, have you
reached out to this person whodid a film similar?
(12:57):
Or they had a festival plan forthis horror that was similar?
We love being involved and welove being able to facilitate
those connections, in additionto the charitable donations
going into your account.
So that's what's just so funabout being able to be fiscal
sponsors for these projects.
Yeah, the minimum amount toapply for our fiscal sponsor
program and this varies so youwant to check this on the
(13:18):
websites of other fiscalsponsors but the minimum rate
that we need you to raise forbudget is $10,000.
And that's because there's alot of admin and legal setup
required in order to facilitatethose donations, and so anything
below $10,000, it's not reallyworthwhile for either you or for
us to facilitate thattransaction and, in addition,
(13:39):
you need to have a prettyfeasible plan on how you're
going to shoot it, how you'regoing to distribute it and how
you're marketing that.
Speaker 1 (13:44):
All of that's obviously covered in the
application when we review it so, once you apply, what happens
is you send your application tous or any organization, and then
that application will bereviewed.
Speaker 2 (14:00):
One thing to mention is a lot of our teams apply with
pre-production in mind, and sothey haven't actually shot yet.
However, we do have a fewprojects that are in current
production, looking to raise fora second round, or are in post
because they need additionalfunding for VFX or color or
festival distribution or somesort of strategy in post
(14:22):
festival distribution or somesort of strategy in post.
Speaker 1 (14:23):
So then, once you finish your application process,
if all of the detailed plansand things are met and we decide
it's a great project for us totake on, you will get an
acceptance email.
It'll be exciting.
Speaker 2 (14:36):
So your acceptance email covers the financial
agreement, so the fiscalsponsorship agreement that
you'll have to sign.
You'll have to sign up to ourmember portal in order to access
a blank W-9, the fiscalsponsorship handbook and all of
the forms, like disbursement offunds requests, as well as
setting up our bank accountlinked to yours.
And all of the other forms thatneed to be filled out will be
(14:58):
based off of our website portalthat you'll have access to.
Now, depending on the type ofproject you applied with, you'll
have a specific ID that weallocate that you'll be used for
all of the future communicationand the disbursement of funds,
so that'll be your project IDspecifically.
Now, the biggest thing is, oncewe accept a project, we then
(15:18):
have to set up all of themethods in which your funders or
donors can donate andcontribute to your project.
So once you receive thosedocuments, we then go into
setting it up on our end, sothat makes all of the actual
financial obligation on us a loteasier to send out to your
prospective donors so they candonate through checks, ach
(15:39):
transfers, online donations,stock contributions which is a
really interesting one as wellas matching gifts.
A lot of that information isavailable on our website on how
that can be done and within ourhandbooks you can look further
into that.
But there's a variety of waysthat people can donate.
I think stock is the mostinteresting.
(15:59):
We haven't seen it done yet, soI'm very excited about that.
But if you think about it, it'sa way of having people who have
been sitting on a stock for avery long time and don't want to
pay taxes on the profit they'vemade actually donating that to
you, and then we convert thatand cash out on the day we
receive it so that we're notplaying the market or anything
like that.
Yeah, I think that's importantto say yeah, and we actually do
(16:21):
it through DonorBox.
So, yes, we are responsible forthe intake of your donations
and providing donation receiptsabove $250.
That's just because of tax code.
Anything below $250, we don'trequire.
You don't require a donationreceipt for that donor.
So anything above $250 isprovided a receipt and then we
(16:43):
go that goes into our accountand then you can disperse your
funds in however many incrementsyou'd like once you request it.
Beyond what we're responsiblefor as the middle person there
in the intermediary, you'reresponsible, obviously, for
setting up your crowdfunding,reaching out to your private
network.
We do not solicit donations foryou.
(17:03):
We are just the carrier and themethod in which we can accept
them for you.
So just keep that in mind.
And that's pretty standard forall fiscal sponsors.
One of the biggest things youneed to keep in mind when
applying for fiscal sponsorshipis the percentage they take out
of your donations.
The standard rate is 5% to 7%.
Cfa Institute is on the 5%level.
Anything above or below that, Ibelieve, should be a little
(17:27):
iffy, especially when it's inthe above 7%.
We have a lot of FAQs in ourhandbook, and that's because
there's a lot of things that youneed to know when starting as a
fiscal sponsor and sponsoree,and one of the things I want to
make clear is that, for thepurposes of CFA Institute, any
charitable contributions must befrom US-based or US or donors
(17:52):
with taxable income in theStates.
That's really important.
So you could be in Canada oryou could be in the UK, but your
donor has to have US taxableincome, as we are a US charity,
american charity, in 501c3.
So it wouldn't be taxdeductible if it's.
I'm Canadian originally, so ifit was Canadian income only,
they wouldn't be able to filethat at the end of the year
(18:13):
because we're not currently aCanadian entity, right?
Speaker 1 (18:17):
Yes, and I wanted to talk a little bit about, um, why
you can't just accept adonation from someone you know
like.
Of course, anyone can give youmoney and if they're like, oh, I
don't care about this money, Idon't need it back, that's fine.
But in order for them to writeit off on their taxes, they need
(18:38):
to have the donation receiptthat is provided to them by a
fiscal sponsor that has the EINof a 501c3 on it, or else it
doesn't count as a charitabledonation.
So that's why it's necessarythat you have a 501c3 supporting
you, or your own 501c3 toaccept tax deductible donations.
Speaker 2 (19:00):
Yeah, and one of the things you want to look at when
applying for fiscal sponsorshipto many programs or interviewing
is asking their turnaround timefrom application to possible
acceptance, because that'll varybased on the scale of the
corporation or the company.
So we say around 7 to 10business days, because as we get
busier, I imagine that that'sjust going to go up.
(19:21):
However, currently we'reexperiencing like a one to five
day turnaround for setting upprojects, which is great.
One of the questions we alwaysget is what is the best time of
year that I should be filming orfunding, at least for my
project, and does it make adifference when I'm asking for
charitable contributions?
This would obviously dependdonor to donor and project to
project.
However, one of the things youneed to keep in mind is tax
(19:43):
season and when that is so inApril, and know when that fiscal
year ends for each donorspecifically, and also if you're
going to be applying for anindividual specific donor or a
company, because they both fallon different calendars for when
taxes are due for them.
Speaker 1 (20:01):
Different fiscal calendars.
There's also the idea there area lot of organizations that
solicit donations in adevelopment period around the
holidays.
There is a lot of holiday giftgiving from people who are
(20:21):
generally giving money tocharity.
So it is a person-to-personbasis, of course, but I think
you are more likely to run intosomeone who's like oh, I already
gave away all my gifts duringthe holidays, so earlier in the
year you may be able to get inthere and get some of that gift
(20:43):
before they give it to theirfavorite charity.
Speaker 2 (20:45):
Yeah.
And on the opposite side ofthat you can argue I think you
know playing devil's advocatethat at the end, closest to when
they're doing taxes, they mightfind that they didn't give away
all of their the ability forthe charitable contributions
based off of their householdincome and their percentage
they're able to donate.
Speaker 1 (21:00):
So, like February is a good time to sweep up the
leftovers, sure, yeah.
Speaker 2 (21:06):
But I would say, like have, the most important thing
about our industry, regardlessof fiscal sponsorship, is having
long term relationships withpeople and not just asking for
one off.
So I think having check ins,like knowing I'm going to if I
was going into production, youknow, in November, having that
check in as early as possible,knowing I'm going into November
and checking in being like, hey,I'm going to start, you know,
(21:28):
fundraising soon.
I'm going to have a fiscalsponsor.
That means that you can have acharity, like a tax deductible
write-off, so please keep me inmind and maybe, like reserve
some funds that would be awesomebecause I know you were
interested in supporting me andthen a few months later, when
you have it set up with yourfiscal sponsor, you can go back
to them and say, hey, I'm ready,I have fiscal sponsorship.
Can you do an online donationof X amount to support my
(21:50):
project?
So I think those annualcheck-ins or those quarterly
check-ins are a really great wayof not only building your
relationship up as a filmmakerand throughout your career, but
it keeps you on track to beaccountable for what your
projects are doing and not just,and also it makes you look more
professional, because you're onit and you know your deadlines
and your production schedulesalso that that donor will be
(22:11):
thinking of you because they'reseeing what you're doing a lot
so they'll be keeping you inmind when they're making other
donations.
Speaker 1 (22:18):
Correct, a lot of people have donors, but they
also have investors, yes, yes.
So with fiscal sponsorship, canthey fund their film using both
donations and equity.
Speaker 2 (22:32):
Yes.
So you as a filmmaker are afor-profit entity.
We as a charity are not.
We will not take equity, wewill not take investment and
process that.
We will only process charitablecontributions or donations
(22:52):
where there is an incentive,where people aren't going to get
a payback or percentage of netproceeds or revenue.
So that means, yes, you as yourown person and team and
filmmaking production company,whether it's an LLC, an S-corp
or a C-corp, you can solicitequity, investment and deal with
the cap table over there.
We will only deal withcharitable contributions.
So we don't accept them.
Speaker 1 (23:13):
But yes, you as a filmmaker are able to do both
equity and donor, and we don'teven need to know or want to
know about your equityinvestment.
Yeah, we won't handle it justbecause we're a charity, so a
lot of people also areconsidering having a fiscal
sponsor and also crowdfunding,which is something you can do.
(23:39):
There are rules around it andthere are percentages around it
that you should consider,because, depending on how much
you're expecting to raise, itmay change your decision.
Speaker 2 (23:45):
Yeah.
So in addition to our 5% fee ora fiscal sponsor fee, whatever
they set it as you're obviouslypaying to the crowdfunding
platform, so you just want tokeep in mind how much of that
percentage of your budget isgoing to other platforms.
Obviously, we act as an onlinedonation portal, so if it's
because you're worried about amethod in which you're accepting
(24:07):
donations, your fiscal sponsorshould be able to handle all of
those things, because that'swhat you're signing on to.
Crowdfunding is a really greatthing in order to just promote
your website and your film andif you have a goal to reach, or
you want to give something inreturn and send out newsletters
to everybody that sign up andare your crowdfunders.
(24:27):
But it's just something toconsider because of the large
amount of your budget thatyou're saying that you're going
to be giving away.
Also, fair market value issomething that you need to keep
in mind If you're saying you'regoing to give someone something
tangible or a value back.
Speaker 1 (24:41):
Like a poster or a keychain or a DVD.
Speaker 2 (24:45):
Yeah, or a Blu-ray I should say, I guess DVD Then you
have to deduct the cost of thatgood off of the donation, so
you're not actually getting thefull donation amount.
So that's just something tokeep in mind and that's called
fair market value.
Speaker 1 (25:01):
So if you're like, if you donate $10, you get this
enamel pin, but if the enamelpin, if the fair market value of
that enamel pin is $2, thenthey only get a donation receipt
for $8.
Speaker 2 (25:14):
Correct and we don't issue donation receipts unless
they're $250.
So if you say, for $250 donorsor $500 donors, you're going to
give them a ticket to thepremiere and a DVD and a t-shirt
and all of that costs youaround $100, $125.
You have to subtract that $100or $125 off of the full donation
(25:36):
in order to then claim thatdonation.
So keep that in mind, don'tforget.
Yeah, fair market value andthat's what's tax deductible at
the end of the day.
Speaker 1 (25:46):
So at the end of your project you do have to end your
relationship with us Not really.
You can always be part of ourcommunity.
We will want that.
But there is going to be aformal closure of the project
with us.
There's a form on the websitethat you'll fill out.
We'll kind of go througheverything that happened and
(26:07):
make sure that the reports arein line and make sure that all
the taxes that need to behandled on our end, all the
forms on our end, thateverything's ready to go, and
then we say goodbye and we closeyour account.
Speaker 2 (26:20):
Closing your account in closing your account.
Speaker 1 (26:23):
In closing your account, any funds that are left
over are given to you as well.
So if you came in under budgetor you raised a little more, um,
we still will only keep thatfive percent.
Speaker 2 (26:35):
You will receive all of the funds that you raise
above yeah, and for anyquestions you can reach out to
us at contact atcinematographyforactorscom, and
you can also look on our website.
Thanks everyone, thanks forThanks for joining us.
Bye.
Speaker 3 (26:47):
Join us in bridging the gap between talent and crew.
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Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.