I work on a nonprofit and to receive donations, you need to have 501(c)(3) status, which can be a very painful and long process (took us 8 months, I've heard of

I work on a nonprofit and to receive donations, you need to have 501(c)(3) status, which can be a very painful and long process (took us 8 months, I've heard of it taking as long as 18 months). The nonprofit industry has collectively come up with a hack to avoid this process called fiscal sponsorship. Through fiscal sponsorship, you basically "rent" someone else's nonprofit status for a percentage of your revenue (typically 7 - 12%). You operate as an independent project under someone else's 501(c)(3), so contributions to you are tax deductible and you don't need to wait on the state and the IRS before you can start taking contributions. We had a fiscal sponsor and incorporated as soon as we could reasonably justify the expense (our lawyer cost ~$6k for the whole process) because being under fiscal sponsorship is so painful. You typically don't get access to your bank account directly, payroll has to be done through your parent org and sometimes they won't have systems in place for seemingly common situations, like hiring international contractors, and every large expense (large being >$500) has to be sent through their accounts payable department. I'd really love to see someone start the Stripe of fiscal sponsors. I think you could enable a lot more people to start a lot more nonprofits without being stunted by fiscal sponsors or the large (for new nonprofits) legal costs.