FAQ: How to fundraise for mutual aid

This guide is not meant as a substitute for legal, financial, or other advice as each individual group may have circumstances not captured in this document. The information contained here is intended to be a starting point for framing the types of questions that arise when considering fundraising and is not exhaustive. For specific individual inquiries or suggestions on how to improve this document, please reach out to us at funding@mutualaid.nyc.

Click each question below to see its answer.

Raising funds

What fundraising platform(s) should we use and what are pros and cons of different platforms?

Different platforms provide different aesthetics, user experiences, and probably most importantly, linkages to different fiscal sponsors. Scroll to page three of this document to learn more about platforms and sponsors.

What are strategies we can use to amplify our message and raise more funds?

Ask everybody within your network to reach out to people in their networks to tell them about the great work that you are doing. This is a life update that friends and family will care about. The idea is to continue passing the message on to others. If people can give, great. If they can like, or share, that helps too. Also share the message with those in your networks doing the fundraising to not to be ashamed to directly ask for money. Recipients of the conversation can then make the informed choice to or not to donate. Connect with existing resource guides and newsletters to include in their directories and blasts.

How can we connect with influencers, the media, and other avenues to amplify our message?

Get in touch however you can. Call media outlets, use Instagram and social media outlets, show up at physical locations if you know where you might be able to find people, and again, do not be afraid to make the ask: educate them about what you are doing and tell them what contributions you need. You miss 100% of shots that you don’t take 🙂

What are some strategies for raising funds outside of our communities?

Look for connections to people/groups outside of your communities and take advantage of those connections. Make as many connections as possible and ask if you can be included on distributions of those who have a wider distribution network than your own.

How can we connect to wealthier donors and communities?

Brainstorm widely who might be interested in your community and, if possible, find any connection to those individuals and reach out through those connections. If there isn’t a personal connection, just find their contact info however you can (ideally personal email address, but direct messaging or tagging on Instagram could work too) and carefully introduce yourself. Briefly explain what you are doing and share a link to your fundraising site. Ask them for a conversation and during that conversation tell them more about it. Ask them for a specific amount of money (determined by your group’s needs). They may not give the full amount, but at least you’ve started a negotiation. 

This process may feel awkward, but if these people are wealthy, they are quite used to it, and may even expect it. Keep in mind that you are not hounding them for money, you are simply educating them on how best to apply their charitable giving, which they likely have already set aside. They will appreciate being made aware of this great opportunity to help out and your being there to directly answer any of their questions and make them feel involved. 

If you get a large amount from somebody, you may also invite them to visit or virtually join a meeting to learn more about what you do. This kind of step will help them get emotionally invested and be more likely to support you again.

How can we ensure that we are able to continue fundraising in the long-term?

If you can, set up your online or physical site to collect people’s contact info (specifically email addresses), particularly when they give. If you have a fiscal sponsor, the donor will automatically be sent a form acknowledgement and tax receipt. It is a best practice to then personally follow up with all of your donors later on to ask them to give again. One easy way of doing this is to once monthly write an update email to send to everyone that has donated letting them know what you’ve accomplished so far, what you still need to do, and how much more you need to raise to get it done. People will appreciate knowing what they have contributed to, and some will be inspired to give again.

Can we take advantage of subscription-based donation models?

Subscription-based or recurring donation models can be quite effective for nonprofits in the long run (from months to years) since they provide a mechanism for donors to give more cumulatively than they might have otherwise. It can also be beneficial for the receiving organization by enabling them to better plan their future cash flow. For project-based Mutual Aid groups, the long-term gains are less relevant. It may be preferable to instead simply fundraise any possible funds from any donor up-front. Afterwards, if possible, follow-up with them in the subsequent months for second and third donations.

Should we be aware of any limits to the amount of money we can raise?

If you have a fiscal sponsor, you likely will not have a limit to the amount of money that you can raise. It will be good to check with your sponsor to be certain. Although it is highly unlikely, if we do raise all that you need, it is ethical to stop fundraising at that time.
If you do not have a fiscal sponsor, this becomes more complicated. For example, if you were to keep everything on Venmo, your weekly spending limit would be $6,999.99. There will also be a tax liability if you raise more than $20,000 in total. Refer to What do we need to know about tax liability? for more on this.

What is the fiscal sponsor’s mission and vision?

Understand the mission of the organization that is your fiscal sponsor. This is a partnership between two organizations. Legally, because you live as a project under the fiscal sponsor, your mission has to be able to fit under their organizational mission.  If your mission is not aligned with theirs, the fiscal sponsorship will be unlikely to happen. 

For example, an economic justice project is not going to be able to be fiscally sponsored by an arts organization if the mission of the arts organization is to promote the arts and artists in NYC, and your work is focused on getting groceries to elderly people (who are not artists). However, a mutual aid effort for artists may qualify under the umbrella for fiscal sponsorship for that same arts organization.

Who do they fiscally sponsor? What are the yellow flags and red lines?

A fiscal sponsor is more than just a passthrough for your money, they also are often a signifier of where your priorities are as a group. You might not be completely aligned with groups under a fiscal sponsor’s umbrella, but the fiscal sponsor’s goals and philosophy might still be aligned with yours. Understand what your limitations are and what is a dealbreaker. This can be an issue especially if you are being fiscally sponsored through a religious non-profit that may itself have limitations of who they will support based on their own philosophies and beliefs. 

For example, if you are doing work explicitly for LGBTIA+ communities, you will probably not want to be fiscally sponsored by an organization that has other fiscally sponsored projects under their umbrella with homophobic/transphobic histories.

Are we eligible to apply for New York City funds?

At this time, City resources are directed primarily toward individuals, businesses, and nonprofits. Opportunities for unincorporated neighborhood groups to secure City funding appears limited. One option that may be helpful to your group is the Mayor’s Office of Criminal Justice Safe in the City Grant Program, which was recently expanded to address COVID-19. It may also be helpful to get in touch with your local community board to request information on whether it is allocating resources toward COVID-19 response efforts.

Structuring to accept funds

What structure should we set up to receive donations?

We recommend fundraising through a fiscal sponsor. This means that you do not need to incorporate a 501(c)(3) or obtain an EIN and the sponsor will lend their tax deductibility status and liability coverage.

What is a fiscal sponsor?

Fiscal sponsorship is an arrangement in which a legally incorporated nonprofit agrees to accept and manage funds for another entity, such as an individual or informal group. It occurs when a group or an individual wishes to receive tax-exempt contributions for charitable or community-focused activities without building a full organizational infrastructure.

How to select a fiscal sponsor?

Selecting a fiscal sponsor will likely be linked to what platform you choose to fundraise on since many offer their own fiscal sponsorship. For our purposes, it is a best practice to select a partner who can offer both. Otherwise you will likely choose an online platform and a third party sponsor (please refer to Appendix 1: Common Fiscal Sponsors to learn about a few that other groups use)

Questions to think about when choosing a fiscal sponsor

1. How soon can my project be sponsored? Normally it takes a few days to get approved and set up.

2. What are the fees and the fee structure? These may include some combination of:

a) donation processing and/or credit card fees

b) fiscal sponsorship fee 

c) any flat rates

3. Is our project eligible? Are there any restrictions on what money can be raised or spent on?

4. How easy is it to disperse funds and how long does it take? 

5. What are the additional services offered? These include preferred user experience, fundraising tips, customer support, etc.

6. What kind of fees are there and how do these function?

Most fiscal sponsors will take some administrative fee, normally between 5%-10% of total fundraising. Refer to Appendix 1: Common Fiscal Sponsors to learn more.

Accepting funds

What fees are associated with receiving donations via credit cards?

Most sites will include a donation processing fee associated with credit card donations. Normally, this is around 3%. When donating online, supporters are given the option to add the processing fee on top of the donation, which will help with this. You can also build the +3% into your project budget, so that you fundraise for it.

What do we need to know about accepting donations via cash or cashiers check?

What is allowed for cash donations will vary between platforms. If a supporter wants to give in cash, a project leader who is comfortable doing so can collect that cash and then use their personal card to give the same amount to the project.

This practice will not raise any red flags with the IRS as long as the cash income is less than $15,000.

Do we need a bank account to accept donations?

If you have a fiscal sponsor, you will not need a bank account to accept donations.

If you chose not to use a fiscal sponsor and would like to open a bank account, it is recommended to create an account for your group rather than under an individual’s name. If you do this, be aware that you will either need to incorporate as a 501(c)(3) or your total funding must stay under $20,000 to avoid tax implications.

Are there specific banking institutions that we should look at when considering where to open an account?

While we cannot suggest one type of institution over another, we can share that some people feel that credit unions are a superior choice to banks. Credit unions are not-for-profit organizations that exist to serve their members. Like banks, credit unions accept deposits, make loans and provide a wide array of other financial services. But as member-owned and cooperative institutions, credit unions provide a safe place to save and borrow at reasonable rates. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. Amalgamated Credit Union is a popular choice. 

Whether you choose a bank or a credit union, you will need to file the required paperwork with the state to form a nonprofit corporation or nonprofit association and obtain a federal Tax Identification Number in order to open an account for your group. You can open a bank account and start doing business before applying to the IRS grants for a tax exemption, but you won’t receive all of the benefits associated with tax-exemption until you get your IRS approval.

Can the fiscal sponsor provide tax receipts for in-kind donations?

This depends on the fiscal sponsor you select.

Disbursing funds

What methods and platforms can we use to distribute money to reimburse volunteers for costs incurred?

There are a number of ways to electronically transfer money to your volunteers from your fundraising account. If you have a fiscal sponsor, check to see if they can manage this process for you. If not, you might consider the use of a cash transfer app. While they can provide fast and convenient ways to send money, each comes with its own set of limitations, charges, and other considerations. A helpful comparison of a few popular options — Zelle, Venmo, Cash App, PayPal, and Google Pay, Apple Pay Cash, and social media money transfers — is here. You may opt to employ multiple choices depending on your needs and the needs of the recipient. 

In addition, you may want to consider whether the app is unavailable to volunteers who need to be reimbursed due to reasons such as technological access/capability, access to financial institutions, the app’s policies as to who can use it, which is available in the platform’s terms of service.

Regardless of what your method is for transferring payments, it is always important to implement accounting practices such as tracking expenses and retaining receipts.

What are the steps to get the money into the hands of the community, and how long does this transfer take?

Depending on which platform you use, the money will either be dispersed once you have completely closed the fundraiser, or at set intervals during the fundraising process. Dispersal usually comes through an ACH transfer to a bank account (usually between within 24hrs or once weekly depending on your sponsor), or reloadable debit cards.

Transparency, oversight, and governance

What are best practices for bookkeeping/keeping track of funds?

It is always best practice to keep accurate records of how funds are used. How you track funds will depend on what method you use for distributing funds. If this is a task that is required, it may make sense to choose a fiscal sponsor that can provide this service.

Do we need to track our activities? If so, how should we do that?

It is best practice to track where funds went and what they were spent on, especially as the dollar amounts get higher. Be aware that transfers of large amounts may be subject to tax regulations. Partnering with an organization that offers fiscal sponsorship before receiving and distributing large funds may be worth considering to decrease risk.

What else do we need to consider with respect to transparency, oversight, and governance?

Please take caution when considering large fund transfers as these may be subject to tax regulations that a fiscal sponsorship relationship can assist with and provide guidance on. It is always best practice to track cash flow, maintain accurate records, and reach out for guidance sooner rather than later.


How can we redistribute money, goods, and other resources to communities who have more trouble securing them than we do?

There are many ways to do this. The quickest and easiest way is to connect those wanting to give directly with those in need with no intermediary. However, when considering larger scale transfers and/or ongoing projects, you may want to consider fiscal sponsorship or even 501(c)(3) status. Many crowdsourcing sites will have restrictions on how they will disperse funds and fund-transfer apps often have their own weekly, monthly or upper limit restrictions on the number or amount of transactions an account can make. This may make working entirely on these platforms tricky, but not impossible. Try to find this information out before and consider if there are other options to achieve your objectives.

How can we redistribute money, goods, and other resources from communities who have more success securing them than we do?

There are many avenues to take here. It may be worth considering an online campaign which is heavily promoted to a particular demographic either in a particular geographic or affinity community. There are many crowdfunding sites that focus on giving in this way. It also may be worth considering fiscal sponsorship or even 501(c)(3) status. Crowdsourcing sites will have restrictions on how they will disperse funds.

Meeting the needs of the community

What tools can we use to better monitor requests, manage volunteers, and coordinate and track our activities?

There are a number of free and relatively low-priced technological tools that your team can use to facilitate communication and manage the flow of information and resources. Slack, for example, is a popular free tool used to communicate with volunteer bases, and has several channels that can be used to facilitate communication between multiple teams. Google Sheets is a free tool that groups use to track various types of information in real time in sharable spreadsheets. For helpful examples of how one group has structured their volunteer base and employed technology to manage and respond to requests from their community, please see this slideshow describing Bed Stuy Strong’s procedures and systems. This is provided as an example and not as an endorsement of their processes.

Other considerations

What do we need to know about carrying liability insurance?

Unless you seek it out, you likely will not have liability insurance. This means that, for instance, if a volunteer slips and falls while working on a project activity, the group leaders could legally be liable. You may check with your fiscal sponsor for provision or linkages to liability insurance.

What do we need to know our tax liability?

If you have a fiscal sponsor, they will manage the tax liability for you, so you do not have to. If you do not, expect to have a file a 1099-k if you raise more than $20,000. Most advice explains that you will need to count the fundraising as “other income” and then on another line, report an offset reduction for the same amount. You should consult a tax professional to be sure.

Will donors receive a tax deduction?

If you have a fiscal sponsor or are incorporated as a 501c3 they will, otherwise they will not.
It might also be worth noting that the CARES Act has affected tax-deductibility. Just for 2020, individuals can deduct charitable gifts cumulatively totalling up to $300 from their gross income. This means that even if donors don’t qualify for itemized deductions for charitable donations, they can still simply subtract up to $300 from their reported income, and they will not be taxed on that money. To learn more: https://afpglobal.org/news/cares-act-charitable-giving-incentives

Additional support

Where can we find webinar recordings, toolkits, and other resources to help us move money to our communities more effectively?


Common fiscal sponsors

Please note that these are some known fiscal sponsors that mutual aid groups based in NYC have used currently and in the past. We do not endorse any of the below fiscal sponsors. For full transparency, MANYC is currently fiscally sponsored by Project Prosper, as they fit our organizational needs best. Other mutual aid groups are using other fiscal sponsors, based on their needs and specific contexts. 


SupportProvides an online crowdfunding platform including goal setting, and some fundraising coaching.Limited fiscal sponsorship: they can only sponsor you for one project at a time, not for broader, organizational needs that encompass several projects. E.g. a mutual aid fund that provides grocery support counts as one ‘project’ but if it a bail fund for the same group will be another ‘project’ that requires another fiscal sponsorship. Several MANYC groups fundraise through Ioby, including:
Fees3% donation/credit card processing fee Normally they have other fees (5% for fiscal sponsorship and $35 flat rate, but these are waived for COVID response MA groups). 
Fund Access, Accounting, and LimitsFunds can either be transferred to the group leaders’ personal bank account weekly via ACH, or can be disbursed weekly via reloadable credit cards. You are then responsible for your own accounting of usage.Limits are set by the project leader in conjunction with Ioby. These limits can be broad and can be changed over time – you simply need to document and share your preferences.
Financial flexibility for changing needs:You can always change your documented needs and your fundraising goal.
Disbursement:You can set it up to receive incoming donations up to once weekly.
Transparency: You will have real-time access to how money is coming in.
Other infoWebsites are project-focused and easy for potential donors to interact with.

Open Collective

SupportOpen Collective provides the opportunity to connect to fiscal sponsors (they refer to as Fiscal Hosts). Most MANYC groups use the Open Collective Foundation as their fiscal sponsor: Bushwick Ayuda Mutua, East Bronx Dems Mutual Aid Group, North Brooklyn Mutual Aid.
As the name implies, Open Collective is an open-source community. They host both fiscal sponsors and various projects. For projects, they can provide connection to fiscal sponsorship, an online platform for crowdfunding, financial management and record keeping.
FeesThrough end of June 2020: Open Collective is waiving their platform (5%) and host (5%) fees for all covid response projects until the end of June. This means that from now until June 30th, there will only be a 3% credit card processing fee per transaction. Starting in July 2020: Fees will be 13% per transaction (platform (5%) + host (5%) + processing (3%)). They have stated that they are hoping to extend waiving fees, yet do not yet have the funds for it.
Fund Access, Accounting, and LimitsAll money is stored online through your host’s bank account. Anyone within the collective can then submit receipts or invoices. Team leaders can approve or reject expenses with one click for money to be dispersed. It is easy to then download reports for record-keeping.
The project determines their own expense policy and what are and are not reimbursable costs. All expenses go through two rounds of review: with the collective admin to ensure it meets the expense policy, and then with the host admin to ensure all the documentation is in place and payment is processed correctly. As the expenses of the collective are visible to your supporters, you need to have the peace of mind they are all in line with the collective mission. 
Financial Flexibility for Changing NeedsSince the group determines their own expense policy, they are free to change it if need be. There is no further reporting required.
Disbursement Open Collective processes payments every Monday and Thursday, As long as there are sufficient funds on the collective budget to cover the expense and the admin clicks to pay, the money will be paid out.
Transparency: There is greater transparency with overall donations across open collective. You can see who gave to what, when, and what it was spent on. Since everything is managed through the site, everything automatically updates as users interact with it.
Other infoWebsites are more focused on listing donors, and not as user-friendly for potential supporters to learn about the project. However, stronger software for team expense management and record keeping. It might also be worth noting that their customer support team replies promptly and thoughtfully to inquiry emails. Check out their Quick Start Guide to learn more.

Alliance for Global Justice

SupportLong history as a fiscal sponsor of established social justice organizations including: United Students Against Sweatshops, US Labor Against the War, Refuse Fascism, Movement for Black Lives Fund, Assata’s Daughters. Services include:Completion of all federal tax formsSend IRS receipts for donations of $250 or moreReceive foundation grantsProcess donation checks and crowdfunding donationsCollection of credit card donations on an individualized secure donate pagePayroll and independent contractor servicesGroup Health Insurance (available to those on payroll)Monthly financial activity reportsWeekly donation reports
Fees7% admin fee for check donations; 8% for online donations
Fund Access, Accounting, and Limits
Held in their account on a project’s behalf. They have an online request form for withdrawal requests. You will indicate who is authorized to use that form on the application and you can update that list at any time. You can connect your 3rd party fundraising platforms to our bank account.  We have guidelines for the set up to make sure your deposits are credited accordingly. Venmo not an option since has to connect to a bank account that it can draw on. Prepaid credit card is more for staff expenses and not to distribute funding to individualsThey do not fiscally sponsor groups that participate in election campaigns or which endorse or oppose candidates for elected office. A limited amount of lobbying is permitted under section 501(c)(3). If your organization lobbies, we will need to coordinate so that we don’t go over the IRS lobbying limits.
Financial Flexibility for Changing Needs:Yes as  long as the aims of the organization  agree with their Vision and Mission Statements 
Disbursement:4 ways to distribute funding: e-checks, ACH or wire transfers, and a prepaid credit card.  They issue paper checks twice a week, e-checks possibly around the same (not sure). ACH and wire transfers are issued in 24-48 hours. Prepaid credit card is used more for staff expenses and not to distribute funding to individuals, but it can be funded in 24-48 hours. 
Transparency: Online dashboard to see what’s in our bank accountWe get monthly financial activity reports and weekly donation reports
Other infoContact: Elena Spivak-Rodriguez– fiscalsponsorship@afgj.org

Project Prosper

Support:Support small grassroots orgs to give them infrastructure. MANYC and SWOP Behind Bars are fiscally sponsored by Project ProsperProvide access to a number of app and smart phone-based services to keep sponsored partners productive without getting overwhelmed. Access to extension on community support line (24/7) so people can contact directly. Groups never never lose access to the community support line, CRM, apps, even if they get another sponsor or their own 501c3. Introducing a payroll system in 2021 to pay employees and offer benefits. 
Fees6% of funds collected – what accountant charges to do the books so they can maintain their 501c3. 
Fund Access, Accounting, and LimitsThey do all bookkeeping and just ask that sponsored partners maintain their own receipts in a google doc (Can take pictures of receipts and upload them.)They can pay out directly to a third party. We don’t need to have an individual responsible for funds that come in who would then need to file a 1099. They provide a link on their website and put the project into GuideStar so people can see it’s sponsored. Sponsored partners can get a Paypal button. Up to us if we want to disburse payments. They can do it or we can do it. Part of Hopsy, which gives sponsored partners full control over donations. They can build a gofundme-type site without the hassle of gofundme. They are trying to figure out the best way to build that out for their sponsored partners. (There are credit card fees associated with the platform: about 2.75%.)
Financial Flexibility for Changing Needs:They are super flexible. They want to be responsive to the things and willing to do things differently to meet needs.Contract is open-ended and can be cancelled at any time.All grant funds must be used for grant purposes.
Disbursement:Funds within 24 hours of getting a donation, sent either to the fiscally sponsored org or another payee.Can mail a check, send though PayPal, Cash app, Circle Pay, Google Wallet, etc.Once we reach a “second tier” situation (consistently provide receipts for first couple of months) we get all money (less fee) immediately and then we upload receipts. 
Transparency: There’s a google spreadsheet that has all financial information. Also get access to outreach apps to track what we’re doing and provide info to funders. 
Other infoContact: Alex Andrews407 310 0879 alex@swapusa.org
Project-prosper.org has list of groups they fiscally sponsor. 

Social and Environmental Entrepreneurs

SupportAdministrative support Organizational compliance HR management and payroll services Grant and content management Full Charge Bookkeeping 
Fund Access, Accounting, and LimitsDonations always need to be sent to the SEE office, where they are deposited.SEE processes all account receivables on Wednesdays (deposit checks, run credit cards, bank transfers) and all payables are processed on Friday (submit electronic payment transfers, cut checks, send wire transfers). Only project-related expenses can be covered with these funds, never personal expenses. Only 5% for lobbying
Financial Flexibility for Changing Needs:A project is not required to spend any particular length of time with SEE. You can begin to seek independent tax-exempt status at any point that you and your advisory council feel ready. SEE does require an exit interview before spinning off.
Disbursement:Turnaround time on funds is weekly 
Transparency: This is not clear–more research is required. 
Other infoThey have other mutual aid groups in their portfolio.No word on how quickly they approve fiscal sponsorship.