Fiscal hosting enables Collectives to transact financially without needing to legally incorporate. In other contexts, this is sometimes called fiscal sponsorship.
A fiscal host is a legal company or individual who holds a Collective’s funds in their bank account, and can generate invoices and receipts for backers and sponsors. You can think of a fiscal host as an umbrella organization for the Collectives in it.
The fiscal host is responsible for taxes, accounting, compliance, financial admin, and paying expenses approved by the Collective’s core contributors (admins).
The Open Collective platform makes the job of fiscal hosts a lot easier by providing our software platform for tracking budgets and expenses, generating reports, and automating bookkeeping. Fiscal hosts have a dashboard where they can see their Collectives and perform common actions.
By sharing a host, Collectives are effectively mutualizing the cost and overhead of having a legal entity.
Fiscal Hosts can be in any location and take any form of legal entity (as long as they have a bank account, Paypal account, and Stripe account). Each one determines its own policies for which Collectives it will host and what fees it will charge.
Below are the hosts that Open Collective manages, plus some more examples.
We want to enable all kinds of diverse Collectives, so we make our platform available to a network of fiscal hosts with different missions in different geographies. Each fiscal host determines its own policies and fees.
Some projects can’t be fiscally hosted by the entities Open Collective runs itself, because they are in a country we don’t cover or don’t fit under our entities' missions. For example, Open Source Collective is only for Open Source software projects, and Open Source Foundation is for US-only charity projects.
Every Collective that receives or pays out money needs a fiscal host, because they need to connect the host's bank account, Stripe account, and Paypal account to activate Open Collective’s payment features. If you already have a legal company set up, or you are comfortable taking on the responsibility as an individual, you can fiscally host your own Collective.