The Need for Transparency of Fiscal Sponsorships: Black Lives Matter Global Network Foundation and Black Visions Collective

This topic was born out of the current scrutiny of the Black Lives Matter Global Network Foundation. Black Lives Matter was started by Patrisse Cullors, Alicia Garza, and Ayo (Opal) Tometi after the murder of Trayvon Martin in 2012. Their social media organizing started a global movement that spurred the birth of three different organizations; Black Lives Matter, the grassroots organization; Black Lives Matter, the PAC; and the foundation. After years of scrutiny by local activists around the nation, and the 2020 uprising, chapters broke away from the organization as family members who lost loved ones to Police violence called out the organization for lack of support.

In Minneapolis, a similar public outcry was happening. Black Visions Collective, a new social change organization that skyrocketed to notoriety after the murder of George Floyd. The group received millions of dollars in donations, which drew community scrutiny as they were a largely unknown group pre-May 25th, 2020. In a community conversation with the group in October 2020, it was revealed through conversation that the group was under the fiscal sponsorship of Take Action MN, a progressive political group.

To build capacity, many in the social justice community have fiscal sponsors that are more prominent organizations. What ethical obligations for a well-funded group to disclose its fiscal sponsorship?

In 2022, when the Black Lives Matter Global Network organization released its first 990 forms detailing 42 Million dollars in assets, many scrutinized the organization’s structure and financial planning. It was revealed that the reason for much of the mysticism around the Black Lives Matter Global Network Foundation was due to it being in a fiscal sponsorship under the Tides Foundation. The Tides Foundation also is the fiscal sponsor for the NAACP. Tides handle the administration of an organization's funds to make sure that funds are spent according to the IRS’s rules and regulations. Having a fiscal sponsor can open up capacity for organizations with a small staff yet controlling millions of dollars. Yet, the organization's leadership makes the decisions on how to use funds.

Regarding fundraising after George Floyd’s Murder, Black Vision Collective and Reclaim the Block fell under TakeAction, raising millions of dollars from independent donors separately. Perhaps donors would have decided to donate to other groups if that connection was clear. Today, Black Visions Collective has an obligation to publicly disclose its fiscal sponsorship with TakeAction MN and also work toward independence from that fiscal sponsorship.

A fiscal sponsor is an existing non-profit organization that agrees to be a legal or administrative home for a new organization. This can benefit small organizations as they do not need to build the infrastructure and capacity to achieve their functions and goals. For instance, a small group of activists could benefit from fiscal sponsorship because they will be able to focus on their work in the community over the minutiae of the administrative and legal details. With a large organization’s backing, they could also apply for grants and learn how to grow with a safety net. Fiscal sponsors can be very useful for small organizations, but they also are a temporary arrangement as an organization grows and establishes its autonomy.

There are limitations of fiscal sponsorship when it comes to agency, governance, and, most importantly, building community trust. Small organizations might feel bound to the mission and governance of the larger organization. They might even alter their vision to appease the larger organization with a say in their activities. An ill-thought-out fiscal sponsorship might even establish an asymmetric relationship between the entities. The fiscal sponsor could have an out powered position over the direction and shaping of the smaller organization — crucial information for community trust and individual donors.

In the 2019 article, Bringing Fiscal Sponsor Activity to Light, by Fredrik Andersson and Daniel Neely, published in the Nonprofit Policy Forum Journal, the authors show that organizations who employ the fiscal sponsorship model often do not disclose their fiscal sponsorship activity on Form 990 nor their website. Transparency is crucial for accountability, as emphasized in the Minnesota Council for Non-profits standards. Without transparency, it can be difficult for communities to decipher an organization’s true intentions, governance, mission, or ethics to establish the trust needed for broader collaboration and partnership.

Community trust is hard to build and easy to lose. There is nothing inherently wrong with fiscal sponsorships. They serve an excellent purpose for nascent and under-resourced organizations. Still, the relationship must be clearly defined and documented for those organizations to foster community trust before they lose it.

Black Lives Matter Global Network Foundation and Black Visions Collective are no longer nascent or underfunded organizations. They should move quickly to establish their 501c3 or 501c4 to regain the community's trust, or publish a plan for autonomy and follow it diligently.

If Black Lives Matter Global Network Foundation had a strong board, perhaps with the representation of individuals who had been impacted by police brutality, activists from their grassroots branch, and a continuous cycle of members, perhaps questions like, how did Patrisse Cullors and BLMGNF come to decide to buy a $6 Million dollar house in California? It would be more readily answered with less scrutiny.

Also, organizations accountable to the community should invest in creating democratic and transparent mechanisms for decision-making. An example is the NAACP National Board meetings, which are open to the public and broadcast over the internet, allowing NAACP members to see board members' decisions. Also, the NAACP has a national meeting every summer where members can vote to change the constitution and impact the agenda of the NAACP. Such a democratic structure facilitates transparency in decision-making.

But this is not an issue that solely lies with the Black Lives Matter Global Network Foundation or Black Vision Collective; as Andersson and Neely show, this is a common practice in the sector. A practice that needs to change. There should be as much scrutiny on the Tides Foundation and TakeAction Minnesota as on the Black Lives Matter Global Network Foundation and Black Visions Collective. As more groups choose the route of fiscal sponsorship, the industry should proactively practice disclosure of the partnerships to maintain transparency in the sector.