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Non-profit Partnerships

What is a Non-profit Partner Administrative Agreement?

A non-profit partner (operating under an administrative agreement) is distinguished from a fiscal sponsorship (operating under a fiscal sponsorship agreement). A non-profit partner is typically a New Mexico non-profit corporation that may have a federal 501(c)(3) charitable status with the Internal Revenue Service, though having a 501(c)(3) status is not a requirement.

The Administrative Agreement is not a source of funding. It is, instead, an arrangement whereby we provide a sort of banking, bookkeeping, financial reporting service which enables project directors to focus their efforts on the operating aspects of their projects while we do the back office work.

At any given time, we have between 50 and 100 sponsored projects ongoing, some of which are legal entities who prefer to have an organization such as NMCF do the back-office work. However, most projects are not organized as legal entities.

Operationally, the services provided by NMCF to a non-profit partner are similar to that of a fiscal sponsorship. However, a non-profit partner, as a legal entity, has some authorities that a fiscal sponsorship doesn’t have, such as being able to enter into contracts, obtain business insurance, and hire employees.

As is the case for fiscal sponsorships, an administrative agreement between NMCF and a non-profit partner must comply with the IRS tax code, and each project operating under this agreement must have as its objective a charitable purpose that is consistent with the NMCF mission – “to serve and invest in New Mexico’s communities and their people”.

Typically NMCF maintains custody of the received funding and provides disbursement and accounting services for which it assesses a fee on the project’s funding.

The project could be short-term (as in the case of an event) or long-term (as in the case of a project having eventual autonomy as its goal). It could be operated by a non-profit corporation or a partnership.

The following are NOT eligible for an administrative agreement.

  • A for-profit entity.
  • Services of an individual which are the sole expenditures of the project and which provide the basis for that individual’s livelihood.
  • A project which has as its objective the advancement of a religion or religious doctrine.
  • An entity whose purpose is to engage in electioneering and prohibited lobbying activities.