A Fiscal Sponsor Rises in the Desert

Location: Phoenix, AZ
Services Offered: Model A (full or comprehensive) and Model C (grant-specific) fiscal sponsorship — as well as Model F services (outsourced bookkeeping and back office services) for independent 501(c)(3) organizations
Geographic Focus: Maricopa County, The State of Arizona
Sector/Service Focus: Health and Human Services: medical-related, wellness-focused or wellness-based

Recently, I sat down with George Redheffer, Associate Director of Sponsored Projects at the Technical Assistance Partnership of Arizona (TAPAZ), a fiscal sponsor based in Phoenix.

While TAPAZ has been operating (in a number of different forms) since the late 1990s, it has really honed in on its fiscal sponsorship focus in the last four years and George’s focus is building a sustainable program that will continue, and grow, well into the future.

Here is an edited transcript of our discussion:

Schulman Consulting: Let’s start with some basic information. Can you tell me a little about TAPAZ’s fiscal sponsorship program?

George Redheffer: The TAPAZ program offers Model A, C fiscal sponsorship to nonprofit entities as well as Model F services to independent nonprofits – mostly in Maricopa County (where Phoenix is located), but also throughout Arizona, and in some cases, outside Arizona – but the concern is that groups that approach us from outside of Arizona would not be able to thoroughly take advantage of our technical assistance and local training sessions (Ed. note: see below for more information on those).

In terms of sector focus, we really target the “health and human services” area, but for us we use a pretty broad definition – so projects in the medical field, but also wellness-focused or wellness-based entities – those fall under our umbrella, as well.

We currently have 65 sponsored projects and have a steady stream of new applicants. To service those projects, we have a staff that includes one full-time employee, four part-time staff and a number of contractors and other service providers.

SC: Great. You mentioned that you’re accepting new applicants – what’s the process like to apply and what does TAPAZ look for in those applicants?

GR: In terms of process, our fiscal sponsorship committee convenes every other month to consider sponsorship requests, and that includes Model A full comprehensive fiscal sponsorship, Model C grant specific requests and Model F outsourced services.

We look for groups that are collaborating with other organizations in the community, and for groups that are focused on filling community gaps that exist that are not currently being served or can be improved upon by their efforts.

SC: So once you accept a project into the fold, what can they expect from the TAPAZ team? Do you all have a specific focus?

GR: Yes – we focus on three things. One is technical assistance: providing education and training to help build projects’ capacity and ability to perform and ultimately succeed on their own. We know that it takes some time for projects to ramp up their abilities and we’re committed to assisting them to take the next step.

The second thing we provide is accounting and finance support. That includes a number of services such as accounting, check writing, expense tracking, and budgeting. And that all rolls up to our TAPAZ financials, which are audited every year.

The third area of focus is grant application submittal and report tracking. And because our success to this point, we’re confident in our abilities to represent these groups to help them grow and focus on their mission while we take the lead on proofreading, compiling and submitting those grants. We submit those grants in our name but on their behalf and for their benefit. Also, we’re the only full-service fiscal sponsor in the state of Arizona possessing audited financials, so of course that allows us to represent groups in order to apply for grants that they wouldn’t qualify for, or be considered for, on their own.

SC: How did you determine that grant applications should be a focus area for you?

GR: We held a meeting in October of 2015 and convened seven of our more established groups. From that meeting, we understood there was a real need and demand for additional technical assistance and training in the area of grant submittal and writing budgets.

So, in 2016, we created a series of four seminars collectively titled “Preparing Grants and Budgets” where we spent approximately four hours training them developing program narratives and preparing budgets – two key areas of grant applications that we found were the most challenging for our projects. So we brought together a group of our projects and had some experts come in and help demystify the process.

At one session, we had each group bring a project narrative they had written and then share it with others in the room for a critique, and then had each group submit their program narrative for review by our team. And if they have not written one, we requested that they submit one to us within a week after the seminar which is their draft really for their first grant application if they had yet to submit for one. This collaborative approach really helped our projects break through and make marked improvements.

At another seminar session we discussed preparing budgets in the same collaborative format. At this session, we have each group prepare a program budget in Excel on their laptop while sitting in the room. Several of these groups have never worked with Excel or they’re not very proficient in it and they learned how to input formulas, and they walked out of there with some real hands-on training and experience.

The impact of these kinds of activities is really striking. Prior to our seminar series, our grant success rate was approximately 20%. After a year of these sessions, our collective success rate had increased to close to 50% — and that’s while submitting 4-6 grant applications each month. In total, our collective fundraising has grown 1,000% in three years.

And we feel we’re just really getting started. We are continuing to work with our projects to build their capacity, which now includes getting them to the point where they are doing all of their own grant research and applications. TAPAZ’s role is really proofreading, compiling and submitting.

SC: That is great progress. So, are grants the primary source of funding so far for your projects?

GR: Yes, primarily foundation grants with a handle of government grants.

SC: With that kind of growth and adding new projects, I’m sure you’ve encountered some challenges. Can you talk about them?

GR: Based on our tremendous growth, TAPAZ is building out its internal capacity and ability to continue to effectively serve these groups. My number one responsibility is expanding our operational platform, along with the policies and procedures – and staff – in our back office in order to be able to accommodate the current workload and future expected growth.

Also, we would like to collaborate more with other groups in order to assist additional or other nonprofit organizations that don’t necessarily align with our mission but that we could be collaborative partners with and assist each other moving forward.

SC: Can you elaborate on that?

GR: Yes. We’re not focused really in the arts and we don’t really work in the education area, for example. So, those would be a couple of areas (and there are many others) where we could serve as a referral partner to be able to assist projects looking for a home by referring them to another trusted group.

SC: That makes sense. Just based on the success you all have had, it seems like there’s a strong demand for fiscal sponsorship type services in your area, and if there are other sectors, those people out there who see this or read this or find TAPAZ, they should start thinking about meeting those needs.

Can you touch on a couple of project success stories?

GR: I’d love to. We’re proud of all our projects and two immediately come to mind.

First is the TigerMountain Foundation, which has a focus on building community gardens to reduce recidivism. So they are employing formerly incarcerated individuals – people that have a difficult time finding traditional employment, and they have been very successful in expanding their food production and distribution through farmers’ markets, restaurants, and the public. And they’ve been very successful in collaborating with community partners, and recently converted a second tract of land into productive agricultural yield…consumable fruits and vegetables.

And TigerMountain has been very successful with receiving both contracts and grants, and has dramatically expanded. Also, they’ve dramatically built their internal capacity and I see them in the next year or two “flying from the nest” and being able to perform all of these functions on their own.”

Second is the Trinity Opportunity Alliance. They’re offering meaningful employment to young adults that transition from the foster care system at age 18. And they have gone out to numerous large companies and corporations in the Phoenix area and have contracts with these groups, that they will hire foster youth after they age out of the system. That is the best way they can help these young folks, that they need meaningful employment and they get on their feet financially and end up becoming productive members of our community and society. So far, they’ve signed agreements with some large companies here locally, including Kroger, Lowes, Spirit Electronics, Humana, LaQuita, Wells Fargo and Harkins. All in 24 months!

And in addition to all of that success, they’ve been three-for-three in their grant applications within the past year.

SC: Those are some amazing successes…Thank you for sharing.

Taking a step back, I’m curious what you see as the biggest benefits of fiscal sponsorship, at a macro level, and maybe what some of the drawbacks or some of the things that you maybe wish you could change about how they exist currently?

GR: The biggest advantage of fiscal sponsorship, from our viewpoint, is assisting these great groups in the operational areas they need, which allows them to focus on fulfilling and expanding their mission.

The biggest challenge we face is turning groups away that don’t meet our mission in the health and human services area. And there’s tremendous demand for our services, but we want to be able to effectively serve our projects. We need to have adequate internal capacity to be able to keep up with our existing and growing platform.

SC: As you many already know, there are organizations out there in different parts of the country that offer the assistance without the fiscal sponsorship. Do you ever see a day where that’s something you might do?

GR: Very much so, and we’ve had several groups attend our seminar, our series of seminars, as we’re focused on strengthening the community and encouraging collaboration.

SC: One last question – going back to the grants, with all the success you’ve had, one of the things that other fiscal sponsors and their projects sometimes have trouble with is that institutional funders, and even some government funding entities, don’t always understand fiscal sponsorship. And, in a lot of cases, where fiscal sponsorship should be viewed as a positive, where a startup organization or a fairly young organization has the backing of somebody like TAPAZ, who has audited financials and a track record, a lot of times it’s seen in a totally different way, where it comes off as a negative. And I’m curious if you run into that at all or if you’ve come up with any ways to mitigate that or just sort of what’s your experience with that type of thing?

GR: I think, generally, our broader grantor community is knowledgeable about fiscal sponsors and on the quality of services and the platform of services that fiscal sponsors provide. And it’s a goal to reach out to more of those grantors to let them know about our entire platform of services.

Further to that point, we work with the funders in our community and let them know that if they have a group that they really like, but that group’s financial capacity is young or inexperienced or small, we want to be a place where those funders can direct those groups. We will properly steward the funds and provide proper reporting. And the funding community is receptive to those kinds of conversations.

SC: So, just to make sure I’m clear, one of your goals to really get out there and develop those relationships with the grantors ahead of time so that when they receive an application from one of your projects through you, that they know who TAPAZ is. They know what you do. It’s not something new or something they’ve never seen before, or some group they’ve never heard of. It’s someone they know, and it’s someone they know is doing things the right way.

GR: Yes, that’s correct. That’s a big part of my role – to be out in the community, letting everyone know that we’re here, what we’re up to and how we can assist.

Do you have any questions for George or Andrew? Do you know of a sponsor that we should feature? Please let us know in the comments below.