Our Terms & Conditions

As of July 2020

Below, find Open Collective Foundation's Fiscal Sponsorship Agreement with added help text to explain legal terminology.

Plain English help text (unofficial) below

These are the basic Terms of Fiscal Sponsorship of the Open Collective Foundation. This agreement is entered into effect (“Effective Date”) upon acceptance of the Terms of Fiscal Sponsorship when creating a Collective (“Project” or “Sponsee”) and requesting fiscal sponsorship by the Open Collective Foundation (“Sponsor” or “Foundation") by and among Open Collective Foundation, a California nonprofit public benefit corporation, and the Collective.

  • These are the terms we agree to when the Open Collective Foundation fiscally hosts a Collective. It takes effect when a Collective that has applied is approved.

  • In this document, the Open Collective Foundation is called the “Sponsor” or “Foundation” (we), and the Collective is called the “Sponsee” or “Project” (you).

  • What we call “fiscal hosting” is called “fiscal sponsorship” in this agreement.

RECITALS

The parties enter into this Agreement with reference to the following facts:

A. Sponsor is a California nonprofit public benefit corporation exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code (“Code”), its charitable purposes and activities of which include enabling individuals and groups, working together, to create and invest in projects that benefit the public by providing services and support, including fiscal sponsorship (“Sponsor’s Mission”). In alignment with Sponsor’s Mission, it serves as a fiscal sponsor to certain charitable projects which meet the criteria set forth in the protocols, which are attached hereto and incorporated herein by this reference as Exhibit A (“Protocols”).

  • The Open Collective Foundation is a 501(c)(3) organization. This means it is exempt from taxes and its income is used for a charitable purpose, not for profit.

  • Our purpose and mission is explained in detail in Exhibit A below.

  • Serving as a fiscal host to Collectives who share our charitable purpose is one way we achieve our mission.

B. Sponsee’s charitable mission as set forth in the materials submitted to Sponsor has met the Foundation’s criteria as set forth in Exhibit A.

You told us about your Collective’s mission, and we agreed that it fits with our charitable purpose.

C. Because the Project is in alignment with Sponsor’s Mission and the specific criteria set forth in the Protocols, Sponsor desires to act as the fiscal sponsor of the Project and Sponsee desires to have Sponsor act as fiscal sponsor of the Project upon the terms and subject to the conditions set forth herein.

We want to fiscally host you, and you want to be fiscally hosted by us, because our missions are in alignment.

D. In support of the Project, Sponsor has approved the establishment of a restricted fund (the “Fund”) to receive donations of cash and other property earmarked for support of the Project, and to grant from the Fund all amounts raised by Sponsee during the Term (as defined herein), less any administrative charges, interest, expenses and other fees (as provided for in the Protocols), to Sponsee in furtherance of the Project.

We will hold funds and pay them out on your behalf, minus fees. We won’t use your Collective’s money for anything else.

AGREEMENT

In consideration of the mutual promises in this Agreement, the parties agree as follows:

1. RECITALS

The above cited Recitals are incorporated herein by this reference and made a part of this Agreement.

We all agree to the facts in the “recitals” section above.

2. TERM OF AGREEMENT

This Agreement shall commence upon the Effective Date, and will continue unless and until terminated under Section 6 of this Agreement (“Term”).

This agreement starts when the Foundation becomes the Collective’s fiscal host, and it will continue until terminated (as explained in section 6 below).

3. RELATIONSHIP & PROCESS

Sponsor will assist in managing the funds of the Fund; it will collect the income and will pay and disburse the net income and principal for purposes of the Project as specifically set forth in the Protocols.

We will collect money on your behalf, and will pay it out for expenses related to your project, as long as they meet the requirements explained below.

A. Relationship of the Parties. Nothing in this Agreement constitutes the naming of the Sponsee or members or agents of the Sponsee as an agent or legal representative of Sponsor for any purpose whatsoever except as specifically and to the extent set forth herein.

You can’t legally act for the Foundation, except in the specific ways laid out in this agreement.

B. Protocols. To operate the Fund, Sponsor has established certain protocols, the Protocols, as set forth in Exhibit A. Sponsor will provide the Protocols to Sponsee and may from time to time update the Protocols to assist in performing its obligations under this Agreement in as expedient and professional a manner as possible.

We will manage your funds according to the processes explained below. We might adapt or improve them over time.

C. Solicitation of Contributions & Fundraising. Sponsee may solicit gifts, contributions, sponsorships, and grants to Sponsor for the purpose of the Project through Sponsor’s website platform (“Platform”). However, at least 60 days prior to any official fundraising campaigns or events that are to be physically held in a particular geographic location (as opposed to online), Sponsee shall be required to provide notice in writing to Sponsor so that Sponsor may comply with any applicable state or local rules or regulations. For purposes of clarity, Sponsor shall not be required to provide such notification to Sponsor for any fundraising campaigns or events that solely take place over the Internet.

  • You can fundraise online through your Collective.

  • If you are going to hold an offline fundraiser, you need to let us know so we can make sure certain legal restrictions are followed.

  • If your fundraising activities are only on the internet, you don’t have to notify us about them.

D. Agreements with Third Parties. If Sponsee wants to enter into any agreement or obligation with a donor to provide services to a donor beyond simply receiving a donor’s contributions, Sponsee must first provide notice of the specific details relating thereto to Sponsor and obtain Sponsor’s prior written consent to do so, as these agreements or obligations will legally be between Sponsor and the donor.

If you want to enter into an agreement with someone else, such as a contract with a vendor or providing a specific service to a sponsor, you need to get our permission, because legally that agreement is with the Foundation.

E. Ownership of Intellectual Property. Any and all tangible or intangible property, including intellectual property, such as copyrights to the Project belong to the Sponsee. Furthermore, Sponsee represents that it has the power and right to advance the Project. Sponsor acknowledges and agrees that any trademarks, trade names, artwork, designs, logos, copy, and all other intellectual property provided to Sponsor by Sponsee or its agents belongs to Sponsee.

You own the intellectual property of your project. You don’t turn it over to us when we become your fiscal host. If you provide something like a logo for use on your Collective page, it still belongs to you.

4. THE PROJECT

According to the terms of this Agreement, Sponsor will create a Fund for the Project to receive donations of cash and other property earmarked for support of the Project, and to make disbursements for expenses incurred in furtherance of the Project. Beginning on the Effective Date, Sponsor will place all gifts, grants, contributions and other revenue received by Sponsor and identified with the Project into the Fund to be used for the sole benefit of the Project’s mission, as that mission periodically may be defined by the Sponsee with the written approval of Sponsor. Sponsor will exercise full control and discretion over the Project’s financial administration, management, and disbursement of the Fund including the income generating from the Fund.

  • We will accept, hold, track, and pay out money for your project.

  • We will use that money only to further the mission of your project.

  • You can update your project’s mission, but we’ll need to re-approve it to make sure it still fits the Foundation’s criteria.

  • We’ll do all the admin and management related to paying out money from your Collective.

A. Restricted Fund: Sponsor’s Income. The parties agree that all money and the fair market value of all property in the Fund will be reported as the income of Sponsor, for both tax purposes and for purposes of Sponsor’s financial statements. Accordingly, Sponsor is responsible for the processing and deposit in the Fund of all monies received for the Project.

  • We’re responsible for taxes and accounting, and money for your project will be reported as the Foundation’s income.

  • It’s our responsibility to make sure money contributed for your Collective is credited to your Collective’s balance.

B. Restricted Fund: Acknowledgment of Contributions. Sponsor is responsible for providing donors with acknowledgement of charitable contributions received by Sponsor for Project.

We will send receipts to sponsors and donors who give money to your Collective.

C. Restricted Fund: Disbursements. Sponsee periodically will submit requests to Sponsor through Sponsor’s Platform for disbursements from the Fund to support the Project as specifically set forth in the Protocols.

You can submit expenses and we’ll pay them out from your Collective’s funds.

5. CHARITABLE PURPOSES

A. All of the assets received by Sponsor under the terms of this Agreement will be devoted to the purposes of the Project in furtherance of Sponsor’s charitable, Code section 501(c)(3) purposes. Sponsee agrees it will use the funds Sponsor disburses to it from the Fund solely for the purposes of the Project, and it will repay to Sponsor any portion of those funds that is not spent or committed for those purposes.

  • Contributions to your Collective must be devoted to your charitable purpose (which fits with our overall purpose).

  • You can’t use your Collective’s funds for anything other than furthering your charitable purpose, and if you do you have to pay it back.

B. Expenditures for any attempt to influence legislation within the meaning of Code section 501(c)(3) are subject to limitations imposed by Sponsor. Sponsee will not use any portion of the assets to participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office, to induce or encourage violations of law or public policy, to cause any private inurement or improper private benefit to occur, nor to take any other action inconsistent with Code section 501(c)(3).

You may not use your Collective’s funds to influence legislation or politics, to support breaking the law, or for private profit.

6. TERMINATION

Either Sponsor or Sponsee may terminate this Agreement on 30 days' written notice to the other party. Within those 30 days, Sponsee shall be required to identify another nonprofit corporation which is recognized as tax-exempt under Code section 501(c)(3), and is not classified as a private foundation under Code section 509(a) (a “Successor”), who is willing and able to support the Project. When a Successor is found, Sponsor will transfer the balance of assets in Sponsor’s restricted Fund for the Project, together with any other assets held or liabilities incurred by Sponsor in connection with the Project, to the Successor at the end of the notice period or any extension thereof, subject to the approval of any third parties that may be required. Further, Sponsee may terminate this Agreement by providing Sponsor with written notice upon receipt of its own 501(c)(3) status recognition under Code. Such notice shall also include evidence of Sponsee’s receipt of 501(c)(3) status recognition; upon Sponsor’s receipt of such evidence, Sponsor will transfer the balance of assets in Sponsor’s restricted Fund for the Project, together with any other assets held or liabilities incurred by Sponsor in connection with the Project, to Sponsee.

  • Either you or we can end this fiscal hosting relationship with 30 days notice.

  • If you want to shut down your Collective and there are funds left, you need to pick another 501(c)(3) organization for us transfer the balance to (to prevent money donated to charity being used for non-charitable purposes).

  • If you start your own 501(c)(3) and don’t need a fiscal sponsor anymore, we will transfer the funds to your new organization.

7. NOTICE

Any notice, demand, delivery, or other communication under this Agreement will be in writing and will be deemed properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or email in the manner provided in this paragraph to the following persons:

To Sponsor:

Open Collective Foundation

340 S. Lemon Avenue, #3717 Walnut, CA 91789

Email: info@opencollective.com

To Sponsee:

Collective name, Email address, and information provided when creating the Project

  • If you need to give us notice of something relevant to this agreement, it needs to be in writing. You can email us or mail us a letter.

  • If we need to notify you of something, we will do it in writing using the contact info you provided when you signed up.

8. ARBITRATION

Any controversy, claim, or dispute between the parties arising from or related to this Agreement that cannot be resolved through discussions between the Sponsee and Sponsor’s leadership must be submitted to mediation before a single mediator mutually agreed to by the parties. If the claim or dispute is not resolved through mediation, it will be submitted to legally binding arbitration before an arbitrator mutually agreed to by the parties. The arbitration will be governed by the rules of the American Arbitration Association. Binding arbitration under this provision is the sole and exclusive remedy for resolving any such dispute or claim, and no party has right to a trial in the civil courts or any right to appeal the arbitrator’s decision, except as may be permitted by the arbitration rules. Judgment upon the award rendered by the arbitrator may be entered in any court otherwise having jurisdiction thereof. The parties will evenly split the costs of the arbitration. Each mediator and arbitrator under this provision must be an attorney who has been licensed to practice law in the State of California or any other state for at least 10 years. If the parties cannot agree upon a qualified mediator or arbitrator, each party will select a qualified person and those two (2) will select a third qualified person to be the sole mediator or arbitrator. Notwithstanding the above, neither party is prevented from obtaining injunctive or other equitable relief from a court of competent jurisdiction pending the resolution of a dispute through mediation or arbitration.

  • If we have a dispute related to this agreement, we will first try to work it out by discussing it together.

  • If that doesn’t resolve the problem, we will do mediation with someone we both approve.

  • If that doesn’t resolve the problem, we will go to binding arbitration, instead of going to court. That means a qualified person will hear both sides and then make a decision, which we will all have to abide by.

  • If we go to arbitration, we will split the cost.

9. ATTORNEY’S FEES

The prevailing party in any legal action to enforce this Agreement is entitled to recover its costs and reasonable attorney’s fees in addition to any other relief granted.

If there is legal action related to this agreement, the winning side will have its costs and legal fees paid by the losing side.

10. CHOICE OF LAW

This Agreement is governed by and interpreted in accordance with the laws of the State of California applicable to agreements made and to be enforced entirely within such State. The sole situs of all mediation, all arbitration, and any other form of dispute resolution for any controversy or claim arising out of this Agreement is the County of Los Angeles in the State of California in the United States of America.

This agreement is governed by the laws of the State of California. If there’s a dispute resolution process, it will take place in Los Angeles.

11. ENTIRE AGREEMENT; MODIFICATION

This Agreement supersedes any prior oral or written understandings or communications between the parties and constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement may not be amended or modified, except in a writing agreed by both parties hereto.

  • This agreement is the official one when it comes to the issues covered in this document, regardless of any other communication or understanding between us.

  • We both have to agree for this agreement to be changed.

12. MISCELLANEOUS

Each provision of this Agreement will be separately enforceable, and the invalidity of one provision will not affect the validity or enforceability of any other provision. Time is of the essence of this Agreement and of each and every provision hereof. The failure of Sponsor to exercise any of its rights under this Agreement will not be deemed a waiver of such rights.

  • If one part of this agreement is invalid, it doesn’t invalidate the rest.

  • If we don’t exercise a right that we have, it doesn’t mean we’re giving up that right for the future.

13. SPONSEE RECEIPT OF AGREEMENT

By signing this Agreement, Sponsee acknowledges that each member and agent of the Sponsee has received a complete copy of this Agreement, including Exhibit A, Protocols and hereby agrees to be bound by the terms hereof.

You acknowledge that you have received this document and agree to what it says.

14. SPONSEE LIABILITIES & INDEMNIFICATION

Sponsee is responsible for all activities of its Project, including any financial or other liabilities and hereby agrees that it will not enter into any conflicting obligations herein as it pertains to this subject matter. Sponsee shall indemnify, defend and hold harmless Sponsor and its respective agents, representatives, employees, directors, managers, members, and officers from any and all claims, damages, losses, liabilities, costs and expenses (including reasonable attorney’s fees) resulting from Sponsee’s performance of its obligations contained herein; injury (including sickness, disease or loss of life) to any person, or damage to any property of any third party at or as a result of Sponsee’s activities or its Project, including that caused by Sponsee’s willful, wanton or intentional acts; Sponsee’s improper use of or claim to the Project, including those made by any third party for Sponsee’s violation of any intellectual property laws; or Sponsee’s operations of the activities under its Project.

  • You are responsible for your project’s activities.

  • You won’t enter into another agreement that conflicts with this one.

  • You can’t hold the Foundation responsible or sue us if you or your project hurt someone, cause damage, or fail to honor this agreement.

EXHIBIT A Protocols

The following are Protocols of Sponsor; these Protocols may be amended by Sponsor with 10 days notice at any time.

These are our policies and processes. We may change them in the future as long as we give you 10 days notice.

1. Criteria: In furtherance of Sponsor’s Mission, it promotes projects in the United States with the charitable purposes outlined below. As such, Sponsee has provided evidence and Sponsor has confirmed that Sponsee’s Project has met one (1) or more of the following criteria for Sponsor’s fiscal sponsorship of the Project:

  • These are our charitable purposes.

  • We’ve confirmed that your project’s purpose is to further at least one of these in the United States.

a. Increasing access to educational resources and training: With the advance of technology and the movement towards a society where people work together to enhance and develop the future, there has been an increase in the number of organizations and groups that are coming together to promote education.

b. Creating a positive social impact: Sponsor’s social impact purpose is aimed at finding ways to (i) eliminate prejudice and discrimination; (ii) combat community deterioration; (iii) decrease juvenile delinquency; (iv) serve the less fortunate or distressed; (v) serve to prevent animal or child cruelty; or (vi) create a positive impact on society.

c. Developing tools to improve civic participation within cities or communities: Sponsor sponsors projects aimed at fostering civic participation, democratic debate and rebuilding community ties and strengths.

2. Requirements Imposed on Sponsee: To remain in compliance under the terms of this Agreement, Sponsee must follow open governance best practices; use the funds received for stated activities or research only; and maintain at all times a public and transparent ledger for the disbursement of those funds on the Platform.

Your project must: follow open governance best practices, only use the funds for your stated mission, and maintain a transparent budget through your Collective.

3. Sponsor Fee & Expenses: Sponsee will be required to pay fees (“Fees”) and cover any expenses Sponsor incurs on Sponsee’s behalf as a result of this Agreement. Sponsee’s Fund will be automatically deducted to pay from the Fund the following Fees and expenses:

You agree to fees and expenses being automatically deducted from your Collective balance.

a. Fees consist of:

i. 5% of the gross amount of all of the funds raised by Sponsee during the Term of this Agreement, regardless of source, to defray the costs Sponsor incurs in administering the Fund; and

You will pay a 5% fiscal hosting fee, plus payment processor fees.

ii. All interest earned on the Fund which will be retained in Sponsor’s general fund.

Interest earned from money held on your behalf goes to the Foundation.

b. Expenses: In addition to the Fees, Sponsee is responsible for any merchant account credit card processing fees incurred by Sponsor as a result of administration of the Fund, which are directly related to Sponsee’s Project.

(Collectives also pay a 5% platform fee to Open Collective Inc, which is not covered in this agreement with the Open Collective Foundation).

4. Platform: Upon execution of this Agreement, Sponsee’s Project will be featured on the Platform located at https://opencollective.com/foundation#hosting. Sponsor will set Sponsee up on the Platform such that Sponsee will have its own dedicated page that tracks, in total transparency, the funds that it raises and the expenses it incurs in relation to the Project. The Sponsee’s page on the Platform will be linked to Sponsor’s Stripe account and PayPal account so that Sponsor has control over the funds received and disbursed under the Platform for purposes of Sponsee’s Project. The Platform thus serves as a fundraising avenue for the Sponsee’s approved Project enabling it to raise funds and pay for Project expenses. The Platform makes the revenue and expenses of Sponsee available to the public through a transparent ledger.

  • Your Collective will show up on the Open Collective Foundation’s webpage.

  • Your Collective will have its own page on the Open Collective platform, showing your transparent budget, which you can use for fundraising.

  • Your Collective is linked to our Stripe and Paypal accounts to facilitate accepting and paying out money, which we manage.

5. Disbursements: In order to receive a disbursement from the Fund to cover expenses incurred in furtherance of the Project, the Sponsee must upload its receipts/invoices onto the Platform for review by the staff members of the Sponsor. Upon Sponsor’s receipt of said receipts/invoices its staff members will review all documentation to ensure the expenses to be incurred are valid and in alignment with Sponsor’s exempt purposes and the terms of this Agreement. Upon approval by the Sponsor staff members, Sponsor will allow those expenses to be incurred from the Fund by Sponsee through the Platform using PayPal or other mutually agreed payment method. Each time Sponsor approves such expenses, the funds allocated to Sponsee on the Platform will automatically decrease by the amount used. Notwithstanding the foregoing however, prior to incurring any expenses outside of the United States (“Foreign Expenses”) for which Sponsee wishes reimbursement from the Fund, Sponsee shall obtain prior written consent from Sponsor. Specifically, Sponsee shall be required to submit details of such anticipated Foreign Expenses to Sponsor, which shall include but not be limited to the maximum amount to be incurred. In the event Sponsor determines in writing that such Foreign Expenses may be eligible for reimbursement from the Fund as provided for above, Sponsee shall be permitted to incur the disclosed and approved Foreign Expenses and seek disbursement from the Fund pursuant to the process set forth above. Sponsor shall not reimburse from the Fund, any Foreign Expenses incurred by Sponsee for which Sponsor does not provide prior written approval.

  • To trigger a payout of your funds, submit an expense through your Collective with a receipt or invoice, and approve it as the Collective admin. Then we will review it to make sure it’s valid.

  • Once approved by both you and us, we will pay the expense using Paypal (or another mutually agreed payment method), and automatically deduct that amount from your Collective balance.

  • You aren’t allowed to use your Collective funds to pay for expenses incurred outside the United States, due to legal restrictions on US 501(c)(3) organizations. If you submit a foreign expense without getting special permission from us in writing beforehand, we won’t pay it.

6. Funds Received/Expenses Paid Outside Platform: In the event that Sponsee receives funding outside of the Platform (that which does not go directly into the Fund), Sponsee will immediately transfer such funds to Sponsor for deposit into Sponsee’s Fund; at no time shall Sponsee hold any funds for the Project outside of the Fund or utilize the services of any other fiscal sponsor during the Term of this Agreement. Sponsor will use a feature enabled on the Platform to ‘Manually Add Funds’ to Sponsee’s page upon Sponsor’s receipt and deposit of the outside funds into the Fund. This means, that Sponsor will assign the funds received in the Fund destined to the Project for the Sponsee, thus increasing its budget. In the same fashion, if an expense is paid outside of the Platform by Sponsee, because for example the recipient does not hold a PayPal account or another payout method is required, then Sponsor will use the ‘Mark as Paid’ feature on the Platform, that allows Sponsor to record that an expense has already been paid through a different method and that amount is automatically deducted from the Sponsee’s Fund balance.

  • If you raise funds for your project outside of the Open Collective platform, you need to transfer them to the Open Collective Foundation.

  • If you send us funds for your project from another source, we will add them to your Collective’s balance.

  • You can’t hold funds for the project in another account, or simultaneously have another fiscal sponsor for this project while we are your fiscal host.

  • If an expense for your project gets paid outside of the platform, we will manually deduct the amount from your Collective’s balance.

7. Reporting: Sponsor will send Sponsee a monthly email report with all transactions related to the Fund including the revenue generated and the invoices and expenses that have been paid.

We will email you a monthly report of all activity related to your Collective.