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The discussion outlines when Model L is appropriate, contrasts it with Models A, B, and C, and highlights liability, legal-entity status, ownership of results, and reporting implications.",{"@graph":14,"@context":72},[15,34,55],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/general/","General",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/the-use-of-llcs-in-fiscal-sponsorship-a-new-model-model-l/282801/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/the-use-of-llcs-in-fiscal-sponsorship-a-new-model-model-l/282801.png","ImageObject",442,249,{"name":42,"@type":43},"Stanley","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-09-21","2026-09-16",true,{"@type":52,"interactionType":53,"userInteractionCount":22},"InteractionCounter",{"@type":54},"ViewAction",{"@type":56,"mainEntity":57},"FAQPage",[58,64,68],{"name":59,"@type":60,"acceptedAnswer":61},"What is Model L in fiscal sponsorship?","Question",{"text":62,"@type":63},"Model L is a framework where the charity acts as the sole member of a limited liability company (LLC) through which the sponsored project is conducted.","Answer",{"name":65,"@type":60,"acceptedAnswer":66},"How does Model L relate to Model A and when is it a substitute?",{"text":67,"@type":63},"Model L shares many features with Model A and generally serves as a substitute when the sponsor is concerned about potential liability from project activities.",{"name":69,"@type":60,"acceptedAnswer":70},"How do the benefits and limitations of Model L differ from other sponsorship models?",{"text":71,"@type":63},"Model L can combine benefits of other models, but it may be impractical for smaller projects that are not well funded.","https://schema.org",{"og:url":32,"og:type":74,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":76,"canonical":32},"index,follow",{"doc_id":78,"site_id":7},282801,1790014085,{"code":4,"msg":81,"data":82},"success",[83,88,93,98,103,108,113,118,123],{"id":84,"doc_module":22,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},11,"Presentations",90,"presentations",{"id":89,"doc_module":22,"doc_module_name":25,"category_name":90,"show_sort_weight":91,"slug":92},12,"Resumes",80,"resumes",{"id":94,"doc_module":22,"doc_module_name":25,"category_name":95,"show_sort_weight":96,"slug":97},14,"Invoices",70,"invoices",{"id":99,"doc_module":22,"doc_module_name":25,"category_name":100,"show_sort_weight":101,"slug":102},15,"Posters",60,"posters",{"id":104,"doc_module":22,"doc_module_name":25,"category_name":105,"show_sort_weight":106,"slug":107},16,"Social 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OFLLCSNFSCAL  \nSPONSORSHIP—ANEWMODEL  \nSTEVEN CHIODINI AND GREGORYL.COLVIN  \nFiscal sponsorship,in which a Section 501(c)(3)ciently different from Model A that it deserves  \npublic charity extends the umbrella of its tax-ex-its own conceptual category.As this article will  \nempt status to a previously unaffiliated project,explain,the circumstances in which Model L  \noffers a valuable tool for charitable entrepreneurs will be appropriate are relatively narrow(at  \nleast for the moment),although it can be ex-tremely useful in some situations.This is par-ticularly true given recent IRS guidance per-mitting private foundations to make grants toLLCs wholly owned by public charities withoutconducting expenditure responsibility.²  \nwho want to attract tax-deductible donationsfrom the public and facilitate grants from privatefoundations without going through the timeand expense,at least initially,ofobtaining tax-ex-empt status fora new organization.Large charita-ble organizations that regularly sponsor projectstypically use one of three models of fiscal spon-sorship:a “Model A”direct-project approach,a“Model B”independent contractor arrangement,or a “Model C”pre-arranged grantor-grantee re-lationship.  \nThe existing primary models offiscalsponsorship  \nThe following discussion explores a newmodel—“ModelL”-in which the charity acts asthe sole member of a limited liability company(LLC)from which the sponsored project isconducted.Model L shares many features withModelA,and would generally serve as a substi-tute for a Model A arrangement if the sponsoris concerned about potential liability from theproject's activities.Nevertheless,it also hascharacteristics of other models and is suffi-  \nModel Lmay  \ncombine most of  \nthe benefits of  \nother models,  \nbut may be  \nimpractical for  \nsmaller projects  \nthat are not well-  \nfunded.  \nAs mentioned above,and as shown in Exhibits 1and 2 on pages 8 and 9,respectively(except forModel B),the most common forms offiscal spon-sorship fall into the following categories:  \n·Model A.The project becomes an internal pro-gram of the sponsoring charity.Project staffbecome employees or volunteers of the spon-sor.Legally,the project is no different from anyother activity that the sponsor carries on di-rectly.The chiefbenefit of Model A is that thecharity will usually handle the project's back-office operations,leaving the project staff freeto pursue program activities.Also,there is noneed to maintain a separate legal entity for theproject.  \n| EXHIBIT 1  \u003Cbr>Basic Structures of Selected Sponsorship Models.   |  |  |  |\n| --- | --- | --- | --- |\n|  | ModelA(Direct  \u003Cbr>Project)   | Model L(Single-  \u003Cbr>Member LLC)   | Model C(Preapproved  \u003Cbr>Grant Relationship)   |\n| Basic Characteristics   | Project belongs to  \u003Cbr>sponsor and is  \u003Cbr>implemented by its  \u003Cbr>employees and  \u003Cbr>volunteers   | Project is operated  \u003Cbr>in an LLC,wholly  \u003Cbr>owned by the sponsor.   | Project applies to  \u003Cbr>sponsor for one or a  \u003Cbr>series of grants,spon-  \u003Cbr>sor funds project only  \u003Cbr>to extent money re-  \u003Cbr>ceived from donors.   |\n| Is Project A Legal  \u003Cbr>Entity?   | No.   | Yes.   | Yes.   |\n| Basic Relationship   | Employer-Employee.   | Parent-Subsidiary.   | Grantor-Grantee.   |\n| Charitable Donations  \u003Cbr>For Project Belong To   | Sponsor.   | Sponsor.   | Sponsor.   |\n|  |  |  |  |\n| Private Foundations  \u003Cbr>Issue Grants To   | Sponsor.   | Project LLC itself or  \u003Cbr>Sponsor.   | Sponsor.   |\n| Sponsor's Liability  \u003Cbr>To 3d Parties   | Tota liability for acts of  \u003Cbr>employees.   | No liability for LLC's  \u003Cbr>debts and obligations;  \u003Cbr>akin to Model C as to  \u003Cbr>grant funding.   | Selection and payment  \u003Cbr>of grantee,plus terms  \u003Cbr>set by funding source.   |\n| Ownership Of Results   | Sp","cbCaivDtZoS4Wx3c","https://ap.wps.com/l/cbCaivDtZoS4Wx3c","pdf",1439579,"English","# The existing primary models of fiscal sponsorship\n## Model A\n## Model B\n## Model C\n# A new model: Model L\n## Basic concept and key use cases\n## Relationship, liability, and practical considerations","[{\"question\":\"What is Model L in fiscal sponsorship?\",\"answer\":\"Model L is a framework where the charity acts as the sole member of a limited liability company (LLC) through which the sponsored project is conducted.\"},{\"question\":\"How does Model L relate to Model A and when is it a substitute?\",\"answer\":\"Model L shares many features with Model A and generally serves as a substitute when the sponsor is concerned about potential liability from project activities.\"},{\"question\":\"How do the benefits and limitations of Model L differ from other sponsorship models?\",\"answer\":\"Model L can combine benefits of other models, but it may be impractical for smaller projects that are not well funded.\"}]","The Use of LLCs in Fiscal Sponsorship - A New Model - Model L | PDF",1789582962]