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Is Fiscal Sponsorship the Key to Revitalizing a Middle Sector Economy?

In a recent blog post, I promised to continue the investigation into whether or not Andersen Design, a ceramic art, design and hand crafted production company, established as a free enterprise in 1952, can fit  NEA guidelines as part of the new "creative ecosytem"which connects the "arts" with the non-arts".and "investigates how support systems for the arts are changing, explores how the arts can connect with other sectors that want and utilize creativity, and invests in innovative projects to spark new, collaborative ideas"

Of course not, because eligibility requirements for a NEA grant have remained unchanged for decades.
National Endowment for the Arts’  "Legal Requirements" including nonprofit, tax-exempt status at the time of application. (All organizations must apply directly on their own behalf. Applications through a fiscal sponsor are not allowed. See more information on fiscal sponsors.)
ART WORKS Guidelines
As the National Endowment for the Arts champions itself as agents of change for others, and fancies itself collaborating with the world of business and economic development, the NEA is stuck in a rut concerning the effect of its eligibility policies on the economy. Eligability is tied to a 501 (3)(C) tax exempt status and explicitly excludes fiscally sponsored projects, now accepted by many private foundations. The difference between a fiscally sponsored project and a 501 (3)(C) organization is that the latter is tax exempt and the former is not, while both can accept tax deductible contributions. The NEA is yet another example of how the wealth redistribution systems in America work to tax some without representation while representing and exempting others from taxation and, in some cases, empowering the tax exempt entity with private taxation authority using the guise of refundable tax credits.

There is a popular call in the non-profit sector to discourage new non-profits. It may have started in 2010 with this post from Don Griesmann's Nonprofit Blog and transformed into the rhetoric of official policy in places like and the Guidestar Blog. Don Griesmann offers a single reason for not starting a non-profit. It is because there are already a lot of non-profits. He does not expound further but the concern is apparent that should the ratio between tax exempt organizations to tax paying organization become over burdened on the side of tax exempt organizations, government resources for non-profits will dry up, and that will only be the beginning of larger economic problems.

There is also the competition factor, based in a conception of a fixed amount of wealth to be distributed. In this paradigm every non-profit donation received takes it away from another non-profit. The common sense solution to both concerns is to distribute more funds to fiscally sponsored social enterprise projects. Social enterprises are free enterprises and part of  the wealth creating economy. Fiscally sponsored projects pay taxes, producing more government revenue,a primary source of non-profit funding.

Also, social enterprises are often micro economy enterprises. Why does this matter? An economy with many small parts is a hedge against an economy dominated by fewer and fewer organizations. More importantly, an economy with many small businesses, as well as larger ones, provides greater opportunity that every individual can find a compatible and productive place within society.

Fiscal sponsorship opens a door to funding possibilities for micro businesses, which make up the middle sector of the economy, a sector which has been drained of capital resources by policies implemented to advantage public-private relationships (corporate welfare) and by the corresponding growth of general welfare. A fiscally sponsored project pays into the tax stream which funds the NEA. What goes around, comes around.That's old school, economic development 101. But instead the NEA compounds upon the mission to discourage newcomers on the scene by its funding policies for museums, which is for established museums,only, reinforcing the movement which calls for discouraging the creation of new nonprofits.

Upon reading the guidelines for NEA museum funding, I made a comment via email about how the support system for the arts is changing. I asked "What happened to the America which is about opportunities for all?"

I received a personal phone call which offered information about associations. One is called the American Association of State and Local History which I am told has a special group for businesses that start museums. I was not aware of this organization, which I hope will be helpful in my own historical research. Even though our government seems to have lost track of the founding intentions of Publius, that of a government that strives to serve all factions equally, still, every one who works for government is an individual trying to serve in their job to the best of their own understanding of what that means under the United States Constitution. So when we speak up with our own individual voices to those individuals, we reinforce the principle that government exists to serve all of the people. and like the butterfly that flaps its wings we change the system when we interact with it, in ways we cannot know. Keep the faith.


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