Fiscal Hosting

What is fiscal hosting?

Most of the time local or grassroots groups (especially those that spring up quickly in a time of crisis) have no bank account, legal status, governance, decision-making structures or back office systems. Whilst this allows them to act quickly it can pose a problem when it comes to financial accountability.
A Fiscal Host is a legally constituted organisation that enables a Collective to transact financially without needing to legally incorporate themselves. They can hold a Collective’s funds in their bank account and generate invoices and receipts for Financial Contributors. Having a Fiscal Host also allows the Collective to receive donations from bodies that would not legally be able to donate to an individual's bank account, like foundations, councils, NGOs and organisations. It also protects against the risk of people donating directly into individual’s bank accounts, with little to no accountability of where that money will go.
The Fiscal Host, in this instance The Social Change Nest, acts as an umbrella organization for the Collectives in it. We are the legal entity, with a bank account, that is hosting your collective’s money. The Open Collective platform keeps a public record of all the transactions.

Why do we need a fiscal host?

Most community or mutual aid groups won’t have a bank account, but will need to handle money. Whether donations, groceries or gas meters. Managing this can quickly become an admin headache.
Using a private bank account, whether attached to a platform like Kickstarter, or to transfer payments directly is never a good idea. The lack of transparency can lead to arguments, fall-outs or even exploitation. Plus all the burden falls to the one account holder, which isn’t sustainable. Using a personal bank account also means formal organisations or NGOs who might want to donate cannot due to legal reasons.
On the other hand, creating a dedicated bank account is tricky for many quickly formed groups who are not a registered charity or business. Registering as either can be a lengthy process, and neither legal status accurately describes the function of a mutual aid or community group.
Having a Fiscal Host bypasses both of these options and the Open Collective platform itself makes all incomings (like donations) and outgoings (like shopping expenses) visible, so clear and accountable to the whole group. The responsibility for signing off expenses can also be shared among group members. Using us as a Fiscal Host on Open Collective serves a specific, but significant function, which we hope will give groups the support they need to focus on other pressing issues.