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Frequently Asked Questions

Who or what organizations are eligible for an administrative agreement as a non-profit partner?

To be eligible for an administrative agreement with the New Mexico Community Foundation a project must have as its purpose an objective that in some way “serves and invests in New Mexico communities”.  The activities of the project must be charitable in purpose.  The project must have a written plan indicating the anticipated funding source(s), its purpose(s), the duration (or perpetuity) of the project, tentative budget (not less than $5,000), and information about the person(s) who will be involved in the project.  The project, at its inception and before incurring any expenses, must have adequate funds secured to cover two months worth of operations (or the entire project if the project is an “event”).

The following are NOT eligible for administrative agreement with NMCF:

  • 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.

How do I determine whether or not my project is eligible for an administrative agreement?

New Mexico Community Foundation has as its first requirement a letter of inquiry.  This letter must be submitted on-line using the “letter of inquiry form”.  The letter of inquiry must provide brief, but basic, information about your project: its mission, planned activity or delivery of services, its current stage of development, and the proposed budget/funding.  We will respond within ten business days.

If your project meets the necessary preliminary criteria, we will then invite you to submit an application, a process which provides more detailed information to enable NMCF to make a final decision as to whether or not to act as administrative agent for your project.

Once a decision is made by NMCF to accept a project, the project principal will specify what services are needed, which will determine NMCF fees, and an agreement will be executed.

What is expected in a letter of inquiry?

The letter of inquiry is intended not only to provide information to NMCF, but is also meant to serve as a guide to your thinking as you plan the development of your project.  To the extent that such information has been determined, the letter should provide as clear a picture as possible of such things as how the project complements the mission of NMCF, a clear fund-raising plan, what funds have been confirmed, how far along the project is, how long it is expected to last, and who is involved in the project.

Which comes first, an agreement or fund-raising?

Generally, these two steps are done concurrently.  First, you must submit a letter of inquiry to determine whether or not the project, as contemplated, would meet NMCF’s preliminary criteria.  If so, then NMCF would require that the fund-raising effort to secure funding commitments begin.  The actual establishment of an administrative agreement would not occur until the required funding threshold is achieved.

Does NMCF provide funding or assist with fund-raising?

Each project must develop and execute its own fund-raising plan.  NMCF does facilitate the collection of internet donations through our web-site for specific projects for a fee.  NMCF does provide grant application assistance in the preparation and submittal of grant applications.  However, the final application is prepared and submitted by the project personnel.

What if I need a fiscal sponsor immediately, or sooner than your usual application processing period?

Each situation is handled on a case-by-case basis. Your justification for expediting the process should be described in your letter of inquiry.

What functions and services are provided by NMCF?

  • NMCF provides forms and procedures for the processing of payment requests, issues checks to the providers of goods and services, accepts and records cash receipts, and produces monthly financial reports. (Click here to view standard financial reports.)
  • Custom reports can be provided for a fee.
  • NMCF does not provide funding of payments beyond the level of funds on hand for the project. We act as your “bank”, disbursing payments only to the extent that funds are available.
  • NMCF does not pay interest on the funds it holds for fiscal sponsorships
  • NMCF does not provide audit services or reporting to tax and regulatory agencies. Assistance to fiscal sponsorships for audits and reports can be done on an hourly rate basis

How does NMCF handle my project’s funds?

NMCF records all cash receipts and cash disbursements based on the forms as submitted and coded by the fiscal sponsorship. We provide the chart of accounts showing the account codes and descriptions for the various categories of revenue and expense. Project administrators are responsible for submittal of correctly coded payment requests and proper documentation, and for monitoring their own cash flow.

Is my non-profit partner a part of the New Mexico Community Foundation?

No. Although the project activity is part of the NMCF audit and NMCF assumes some degree of liability for the custody and disbursement of funds on behalf of the non-profit partner, the project is not an agent or representative of NMCF.

Who owns the project’s work products and intellectual property?

The non-profit partner.

Can a non-profit partner use NMCF as a purchasing agent for the purchase of supplies or services?

No. NMCF does not make its credit cards and charge accounts available to non-profit partners.

Are projects of non-profit partners exempt from gross receipts tax?

No. However, an organization having an administrative agreement with NMCF would be eligible for tax exemptions granted by its own tax status. There is no exemption for gross receipts tax on services.

Can a non-profit partner’s project be used as a “stepping stone” or an “incubator” toward forming a permanent organization?

Yes. In fact, NMCF has sponsored many projects which later organized as non-profit corporations and hired their own staff and operated autonomously. The intermediate step is usually to move seamlessly from fiscal sponsorship status to non-profit partner status when incorporation takes place. NMCF encourages this type of development.

How long can an administrative agreement exist?

There is no specific duration.  NMCF encourages the initiators of non-profit partner projects to think in terms of a two-year term, after which they should have attained the status of an autonomous organization or negotiate a new administrative agreement if continuation of the project is approved.

What is the relationship between project employees and NMCF?

Non-profit partners are responsible for the engagement of employees and private contractors.  These persons are not employees of NMCF.

Does NMCF provide business insurance to its non-profit partners?

Non-profit partners must obtain ordinary business insurance coverage through an insurance agency.  (Click here for a link to Daniels Insurance Agency, NMCF’s agent.)  However, NMCF must be a named insured for project activities, whatever the insurance policy.  Insurance premiums should be an integral part of the project’s budgeted funds.

Can a non-profit partner enter into its own contracts for goods and services on its projects?

Yes.

What is the fee structure for administrative agreements?

NMCF collects a fee at the time funds are received.  Fees range from 3-10% of revenue, depending on a number of factors.  These factors are transaction volume, type of reporting needed, and additional services needed such as budget tracking and liaison with funding sources.