Legal & Compliance FAQ

Do we need to set up a bank account?

Nope. We will hold your funds for you! Hosted Collectives should not set up a separate bank account or legal entity for the project. If you are eligible, joining is fast and easy.

Do we need to file taxes?

Collectives do not have a separate legal existence from Open Collective Foundation and thus should not submit tax forms to the IRS. Your financial activities are included within our annual filings.

Individuals who receive income from Open Collective Foundation (or one of its hosted Collectives) may be asked to submit a W9 and will be issued a 1099. If this applies to you, you will automatically be sent a notification.

If you have questions about your own personal tax situation, we recommend reaching out to a tax professional.

Are we exempt from sales tax?

Sales taxes are administered on the state and local level, but we're happy to apply or complete a certificate for your state or area, provided that we are eligible. Reach out to us and we'll look into it!

We are currently exempt from sales tax in Massachusetts, New York, and Texas. We are not exempt in Colorado. As of June 2022, our application in Illinois is still under review.

Only direct purchases, such as those via the platform or via Virtual Card, are eligible for sales tax exemption. Purchases that would be reimbursed are not eligible.

Will OCF own our intellectual property?

Per our Fiscal Sponsorship Agreement, you retain ownership of all your Collective's intellectual property. If you would like us to hold non-monetary assets, such as trademarks, please reach out.

Do you provide insurance coverage for our activities?

Yes! More info here.

Can we receive international contributions or pay out international expenses?

Yes. But be aware that all of OCF’s transactions are denominated in USD and will then be exchanged into other currencies as part of the transaction.

Can you host groups that are based outside of the United States?

Please review our International Activity Policy.

Can we be fiscally sponsored by another group while being hosted by Open Collective Foundation?

No. Hosted Collectives can only be hosted by OCF for the duration of their time with us. See our Outside Entities Policy and Outside Accounts Policy for additional details.

I'm fiscally hosted by OCF. How should I describe our relationship?

For US-based donors, you can use the following text:

COLLECTIVE is a fiscally sponsored project of Open Collective Foundation, a 501(c)(3) public charity.

You can also use the following snippets if needed, for donors and foundations:

Contributions for the charitable purposes of COLLECTIVE must be made payable to “OpenCollective Foundation” only and are tax-deductible to the extent permitted by law.

Open Collective Foundation will receive grants for the charitable purposes of COLLECTIVE and provide oversight to ensure that grant funds are used in accordance with applicable grant agreements.

Hopefully these are helpful, and you can add your own personal flare. (Whatever you do, do not use the term "fiscal agent," as that means something completely different.)

Last updated