‹ How It Works
Criteria
Overview
To fundraise on ioby, your project must:
- Be based in the United States or its territories
- Have a public benefit, rather than private benefit (political campaigning and lobbying activities are not eligible)
- EITHER be managed by a 501c3 nonprofit organization or government entity, OR have a fiscal sponsor (ioby can serve as your fiscal sponsor - information about this service can be found here).
- If you're interested in offering direct cash aid, please see eligibility requirements here.
Definitions
501c3 nonprofit: An organization as described under Section 501(c)(3) of the US Internal Revenue Code, such as a public charity or private foundation. This type of organization is exempt from federal tax and may receive charitable, tax-exempt donations. You may search registered 501c3 organizations here.Fiscal sponsor: A fiscal sponsor is a nonprofit organization that has agreed to manage the funds raised by an informal group or individual for a charitable project. Often, fiscal sponsors accept charitable, tax-exempt contributions on behalf of the unincorporated group or individual.Government entity: Charitable contributions made to governmental units are tax-deductible under section 170(c)(1) of the Internal Revenue Code if made for a public purpose. Therefore, government entities may receive a direct disbursement from a nonprofit organization without fiscal sponsor oversight. Examples include municipalities, public schools, libraries, or townships. To verify that we may disburse charitable funds to a government entity, ioby staff will ask for a Governmental Information Letter.Private benefit or private inurement: When the person or group raising the funds intends to spend them on private interests, or may themselves benefit from the possession of the funds or items purchased with the funds. For example, a private interest may include raising charitable funds to pay oneself for a service or to purchase property. It may also include raising funds to repair one’s family home or to plant a garden on private property. Private benefit may also include spending charitable funds to purchase items that will be used in one’s own home, or the home of select friends or family.Public good: According to the Internal Revenue Service:“IRC 501(c)(3) exempts from Federal income tax: corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation (except as otherwise provided in subsection (i)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.”
Direct Cash Assistance
Direct aid—giving financial assistance directly to individuals—can be a powerful and relatively simple way of lending a hand in challenging times. It can help plug the gaps the way donations of goods might not, like helping to cover rent, cleaning supplies, or medication. Whether you are a formal 501(c)(3), or just a group of neighbors starting a mutual aid group to help one another out, ioby can be a useful tool to help you offer direct cash assistance to your community. If you don't have your own 501(c)(3) status, ioby can help make giving direct cash assistance easier and straightforward. Raising funds to give direct aid with tools like Zelle, Venmo or even GoFundMe means that you may have to provide tax documentation for gifts above $600, which are normally considered income. When you crowdfund with ioby’s fiscal sponsorship, those funds don’t need to be claimed (and taxed) as income.Ready to get started? Share your idea with us, and one of our expert crowdfunding coaches will reach out with tips, resources, and support every step of your crowdfunding journey.
How can ioby support your crowdfunding campaign to offer direct cash assistance?
If you are a 501(c)(3) nonprofit or already have a 501(c)(3) fiscal sponsor, awesome! You won't need fiscal sponsorship from ioby, and can crowdfund with us whenever you're ready to raise funds. You will still get access to our fundraising coaches and our breadth of fundraising resources. Get started.If you do not have 501(c)(3) status and would like ioby.org to be your fiscal sponsor while you gather donations to give cash assistance directly to neighbors, just as great! We're happy to offer fiscal sponsorship to you so you can collect tax-deductible donations and simplify reporting. In order to receive ioby fiscal sponsorship, your project must align with all of the following:- Those who will receive cash assistance from your campaign must be multiple people, not one person, and they cannot be named in your fundraising description or budget.
- Be ready to name how you’ll give the financial assistance to your audience. State whether you will be giving away prepaid debit cards, prepaid gift cards, prepaid vouchers, or paper cash. If you are giving paper cash we'll need to approve your system of oversight which will need to include how you're recording recipients and evidence that your vulnerable population is being served. Your system should also be organized and include more than one approver.
- Those who will receive cash assistance from your campaign must be a vulnerable population who you describe. You decide what description is best for your mission, it’s just legally required that the campaign say who the vulnerable population is for giving out cash assistance. Some examples of groups typically recognized as charitable by the laws for nonprofit cash assistance:
- Low-Income families
- Families eligible for SNAP benefits
- Families who are ineligible for Federal Stimulus Funds
- Refugees and asylum seekers
- Residents of a specific neighborhood where the median household income is below the national or city average income
- Renters in a specific neighborhood
- Senior citizens (if you're centering vulnerability to COVID-19)
- Any other health inequities or other description of vulnerability.
- You must keep receipts of all your expenses. Because ioby will serve as your fiscal sponsor, it is possible that an audit of ioby will ask for records regarding your campaign. An easy way to keep track of your expenses is to purchase gift cards or prepaid debit cards as the way that you distribute cash, and to save the receipts for the purchases of those prepaid cards.
- You must keep a private list of who has received cash assistance from your fundraiser. Again, this is only information that will be needed in the event of an audit of ioby. We will only ask for this information in the event of an audit, and we will never share this list publicly. Keep this information in your own private records, just in case ioby needs it in the future.
- You can protect the anonymity of your cash recipients by listing just their initials and their zip code, or the last four digits of their phone number.
- Name how much of your fundraiser will go to vulnerable neighbors. This can be as simple as: “All funds will be given to low-income households.” Another example would be: “97% of funds will go to undocumented families, and 3% will pay for the fees when we buy prepaid debit cards.”