š” Fiscal sponsorship lets your project operate as a tax-exempt nonprofit under Hack Club's existing 501(c)(3), so you can accept tax-deductible donations and apply for grants without registering your own charity.
Your project becomes a fiscally sponsored project of The Hack Foundation (Hack Club's legal name), a registered 501(c)(3) nonprofit. You get the benefits of nonprofit status immediately, without filing your own paperwork, in exchange for a flat 7% fee on incoming funds (the low end of the typical 7% to 14% range for fiscal sponsors).
A few terms first
501(c)(3): the section of the U.S. tax code that defines tax-exempt charitable nonprofits. Donations to a 501(c)(3) are tax-deductible for the donor.
Fiscal sponsor: an existing 501(c)(3) that lets your project operate under its legal and tax status, its "umbrella."
EIN: Employer Identification Number, the IRS tax ID for an organization.
Fiscal sponsorship vs. your own 501(c)(3)
Fiscal sponsorship (HCB) | Your own 501(c)(3) | |
Time to start | Days | Months |
Cost to start | Free to apply | Filing fees, often plus legal help |
Tax-exempt status | Immediate, via The Hack Foundation | Only after IRS approval |
Bookkeeping and taxes | Handled for you | Your responsibility |
Ongoing cost | 7% of incoming funds | Annual filings and accounting |
What you get as a fiscally sponsored project
Tax-exempt status as a project of The Hack Foundation, so you can accept tax-deductible donations.
A shared tax ID (EIN: 81-2908499) you can give to donors, funders, and platforms.
The HCB financial platform for spending, transfers, donations, and bookkeeping.
Bookkeeping and taxes handled for you. Your job is to upload receipts.
Support with a roughly 24-hour response time on weekdays (48 hours on weekends).
Perks such as software credits and discounts on your dashboard.
What's the catch?
You operate under The Hack Foundation's nonprofit status, so you don't have your own separate legal entity.
You can't simultaneously run a registered 501(c)(3) of your own. All of your project's funds must run through HCB.
The 7% fee is deducted automatically from incoming funds.
What if I want my own 501(c)(3) later?
You can start the process while you're sponsored. Once the IRS grants you your own Determination Letter and EIN, you end the fiscal sponsorship and your assets transfer to your new nonprofit. See What is the fiscal sponsorship agreement? for how that transition works.