Funders say they want social change…one funding path is still in the shadows

An application form that asks a group whether it has its own bank account often ignores the option hidden in the gaps between ‘yes’ and ‘no’.

Grant eligibility guidelines often look clear. They tell you what costs are allowed, who is and isn’t eligible, and where the funds can go. You can apply if you have a bank account in your group’s name, but funds can’t go into a personal bank account. Simple enough, right? And yet, they often fail to answer an otherwise straightforward question.

Can a group apply if a fiscal host holds the money on their behalf?

Fiscal hosting still sits in a grey area in the funding landscape, particularly in Europe. Some funders do not yet understand or trust the model, whilst those who accept it don’t always make that clear on their websites or eligibility guidance. The result? Groups either waste time on applications or pass up a perfect opportunity.

This points to a wider problem in philanthropy. Funders want to support work that is close to the issues they care about, but a “fundable organisation” is often registered, incorporated, and has a group bank account. If we keep associating an organisation’s maturity and capability of making an impact with its legal status, we risk overlooking the groups that are often closest to the problem.

Fiscal hosting is built on the simple but often neglected idea that groups should not have to incorporate for funders to take their work seriously. Fiscal hosting (or fiscal sponsorship, as it’s known in the US) allows a legally registered organisation to hold funds on behalf of another group, project, or initiative. It provides a secure and transparent way to receive and manage money, whilst supporting financial oversight, reporting, and governance so the group can focus more on the work itself.

For funders, a good fiscal host makes it possible to support groups outside the usual criteria, while making it clear where the money sits, what it’s being used for, and who’s responsible for it.

This is particularly relevant now as philanthropic restrictions have shaped funding into one of the ways power decides who is allowed to organise. 20 January 2025 showed us just how quickly the lack of funding can disrupt humanitarian aid. Donald Trump’s abrupt decision to freeze USAID turned off the ventilator for health programmes, education projects, peacebuilding initiatives and humanitarian responses that supported around 95 million people.

And what about the foreign-agent laws that CIVICUS describes as a wider assault on civic space? Disguising themselves as a question of transparency, they make international support look suspicious, isolating organisations that rely on foreign funding to survive. These laws have become a legal way for governments to suppress civil society organisations into a state of self-censorship.

The route money takes can decide whether support reaches the work at all. That’s why demand for fiscal hosts has been growing rapidly in Europe, and why funders need to treat the model as more than an exception to the rule. In a context of rising restrictions on philanthropy, fiscal hosting creates layers of protection and separation, enabling grantees to carry out their work safely by remaining (or moving) into unincorporated spaces. It will also enable funders to continue funding the impact they are passionate about without putting themselves at risk.

But despite its growing importance, the information around it still hasn’t caught up.

Compiling funding opportunities for a newsletter should be simple, and yet each month, I find myself pausing over the same missing sentence and asking my team, “Do they accept fiscal hosts?” The strange thing is that sometimes we know they do. They’ve accepted fiscally hosted groups before, yet that route still isn’t named.

Even asking directly sometimes doesn’t help. In doing so comes the frustration at the realisation that the funder hasn’t understood the question at all, nor informed themselves on what fiscal hosting is.

“I wish we’d have known about fiscal hosting two years ago” is something we hear often from grassroots groups who felt pressured to incorporate. Their projects were not held back by a lack of commitment, but by the machinery that’s meant to make them fundable in the first place. Time went into opening bank accounts, HMRC processes, governance and admin before their work itself had room to grow. They were made to believe that there was no other route, when one had been hiding in plain sight.

Funders need to name the route clearly, whether it’s a yes, no, or only in certain circumstances. A clear statement not only answers the question and avoids wasted applications, but it also helps other groups recognise fiscal hosting as an option for them in the first place. 

It all comes down to risk. Funders need to know who’s holding the money, ensure the funds will be used for the agreed-upon purpose, and that the group aligns with their ethical standards. However, the assumption that fiscal hosting allows a group to bypass legal regulations and compliance standards misses what a good host actually does. Fiscal hosts do their own due diligence and ensure the grant agreement is being followed. This supports the group in becoming more accountable, giving funders the assurance that money is spent appropriately.

This is why we’re researching what we’re calling the Fiscal Hosting Gap, to help us understand how many funders are aware of this route, how many accept it, and how many communicate that information clearly on their websites. As part of this research, we are inviting funders to share their understanding of fiscal hosting*. The aim is to build a clearer picture of the funding landscape and create practical recommendations for funders.

Fiscal hosting helps funding reach those who need it. Funders should not accept every arrangement unquestioningly but rather understand the model well enough to assess it, set safeguards, and communicate clearly. If funders specify requirements for registration or bank accounts, they should state their position on fiscal hosts, too.

* The survey will close on 13 July, 10 am UK time