In grant relationship fiscal sponsorship, the project is an independent legal entity, and the sponsor-project relationship is limited to one specific set of activities described by the project in a proposal to sponsor. There is no relationship or affiliation between sponsor and project beyond those specific activities. The project maintains its own legal presence outside of the sponsor as a person, entity, or group entirely separate. Mission alignment between sponsor and project is an important requirement. The sponsor-project relationship is scope- and time-limited.
The project is entirely responsible for all its own insurance, operational systems and functions, full-cycle accounting sufficient to account for restricted grant funds, accounts payable and receivable, personnel policies, payroll, employee benefits, taxes, licenses, local/state/federal filings and disclosures that the work requires, and assumes risk and compliance burden associated with all.
The project must submit a financial report to sponsor at least annually for every year in which funds granted by sponsor are received or spent by project.