Outside Accounts Policy
6. 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 Initiative outside of the Fund or utilize the services of any other fiscal sponsor during the Term of this Agreement.

What are outside accounts?

An outside account is any financial account used by an Initiative (“Initiatives”) hosted by OpenCollective Foundation (“OCF”) that is not directly owned and managed by OCF, including Venmo, Cash App, GoFundMe, Eventbrite, PayPal accounts, cash boxes, personal bank accounts, business bank accounts, cryptocurrency wallets, or any other means of storing and distributing money.
If the outside account is associated with an incorporated entity, also ensure compliance with the Outside Entities Policy.

Receiving money to outside accounts

If initiatives receive money to any outside account, the funds must be transferred in a timely manner to OCF. When OCF receives such transferred funds from outside accounts, the amount (less standard fees) will be credited to the Initiative’s budget balance on the Open Collective platform (“Platform”).

Initiatives may process incoming funds through external services or accounts only if the following conditions are met:

    1.
    Donors are made explicitly aware that paying via an outside account means that their donation will not be tax deductible for them.
    2.
    Funds collected through outside accounts are regularly transferred to OCF, not held in an outside account for more than 30 days.

Spending money from outside accounts

Initiatives may not, under any circumstances, receive money to an outside account and disburse or spend those funds from the outside account without transferring them to OCF.
In some circumstances, Initiatives may coordinate distributions of funds via external services or accounts and then seek reimbursement from the Initiative funds held by OCF. Such payments must conform to OCF’s Cash Assistance Policy.
However, receiving money to an outside account and paying it back out again from the outside account, without first transferring the funds to OCF, is never allowed.

Transfers from outside accounts to OCF

Funds may be transferred from outside accounts to OCF via: bank transfer, PayPal, credit card, or check. To make such a transfer, the owner or administrator of the outside account or service should go to the Initiative’s page on the Platform and make a contribution.
If paying through the Platform is not possible, email [email protected] and we will try to find an alternative method. All transfers from outside accounts must include reference info so we can correctly credit the amount to the correct Initiative balance.
When funds are transferred from an outside account to OCF, a receipt will be issued to the payer, i.e. the person or entity who owns or controls the outside account. That person or entity may be eligible to claim a tax deduction for their donation. OCF will not issue receipts to the person or entity who initially paid the money into the outside account; OCF can only issue receipts for payments received directly to its own accounts.

Why we need this policy

OCF has a responsibility to protect its reputation and 501(c)(3) status for the sake of all Initiatives under its umbrella, and violations of this policy can put that at risk.
OCF must ensure that each and every dollar donated to the Initiatives is counted as the revenue of OCF on its annual tax returns—the only way to do this is for the Initiatives to properly transfer all funds to OCF, as required by the Terms of Fiscal Sponsorship.
In addition, OCF must ensure that funds for all Initiatives under its 501(c)(3) umbrella are legitimately used for charitable purposes, and a key part of that process is keeping money in OCF-owned accounts and tracking all transactions through and on the Platform. OCF is required by the IRS and its auditors to have proper documentation for every donation and expense.
Ultimately, it is the laws of the state of California and the United States pertaining to OCF as a 501(c)(3) nonprofit organization that define the requirements of this policy.

Outside Entities

If the outside account is associated with an outside entity, the Initiative is also required to maintain compliance with the Outside Entities Policy.

Policy violations

OCF will make every effort to communicate with Initiatives to help them understand this policy, and work together to find solutions that meet their needs, but ultimately, if an Initiative is not in compliance with this policy, OCF may terminate the fiscal sponsorship relationship.

More Info:

Read our Policies Update / Watch our Webinar to learn more.
Last modified 3mo ago