My article reprinted here from The Filmlot:
What does it mean to be tax-exempt and how does that positively, or
negatively, impact how much money you can raise for your film? There
are film organizations, such as the International Documentary
Association (IDA) and Filmmakers Alliance that have fiscal sponsorship
programs as part of their services to members. What this means is that
you can attach a non-profit organization to your project and utilize
their 501c(3) status (see below on what that might mean). They act as
an oversight partner and will charge a small percentage, usually 5%,
for private and foundation contributions, and a fee starting from 5%,
but not exceeding 8.25%, for governmental awards to cover the
administration costs of monitoring the monies granted in connection
with sponsored projects.
By way of example, Polish-born filmmaker, Marzena Grzegorczyk, sought
out Filmmakers Alliance to be a fiscal partner to raise money to fund
her feature, Sex Life of Savages. You can visit adardor.com
to see how she set up her fundraising web site for the film. The site
includes a blog and payment information on where you can send your
donation, accepting check or credit card. Filmmakers Alliance
doesn’t yet have any kind of PayPal system, but they’re
working on it. Marzena hopes that they set it up soon. Although based
in L.A., like most filmmakers, she travels extensively and needs the
ease and accessibility of a service like that.
I asked Marzena what the motivating factors were in deciding to
embark on a fiscal sponsor relationship with a non-profit or 501c(3)
entity. (The tax code from the IRS on this is pretty thick going, but
basically a foundation that has this status exists on public support
and some funds from income from investments and endowments. This offers
the potential supporter to deduct his/her “contribution”
representing up to 50% of the donor’s adjusted gross income.
Depending on whether you’re an individual donor or a corporation,
the percentage varies.) Marzena decided to start this type of
fundraising because “I wanted to push my project forward. My
script has been circulating among industry people for a few months. It
generated interest, but so far no producing/financial commitment. I was
getting impatient and wanted to move the project forward. Non-profit
fundraising seemed like something that I could do on my own without
relying on other people’s time, tastes, etc. It was intended as
the first stage in my fundraising efforts.”
As a member of the IDA, a filmmaker has access to their Fiscal
Sponsorship Program, which assists more than 300 documentary projects
in film, video and interactive media and allows a filmmaker to raise
funds under the their non-profit banner. Admission to this program is
only available to members and requires filling out an application with
a $75 review fee. I was accepted into their program for a documentary
project I was developing in the South Pacific last year called The Kingdom Just West of Midnight,
about the people’s democratic movement in the Kingdom of Tonga.
At this point, the project is moving along like a gigantic ice flow,
but I must say that it was beneficial for me to be able to say to
potential funders and investors that I had this kind of relationship
with a well-regarded international entity like IDA. It carried some
heft, in other words, in the doc world. (Not that any money has come
through yet, mind you. But still.)
In applying for these programs, (or any grant-writing exercise, for
that matter) you have to force yourself to hone your synopsis and/or
treatment for your film. Ultimately, this helped me with my pitching
skills—I learned how to present my project in the most favorable
light, with the biggest emotional impact I could muster on the page, in
order for an administrator, inundated with submissions up to the
eyeballs, to put it in the “let’s consider that one”
pile. I’m a proponent of applying for things as much as you can.
It’s good practice for all kinds of things, particularly your
sales skills. It does take inordinate patience since most funding
institutions or fiscal sponsorship programs, labs, etc. can take up to
six-to-eight weeks to get back to you with a nay or yea
on whether they’re considering funding your project or will allow
you to act as a legal representative in an agreement with their
institution. In essence, you become the project director of your
film—a role a lot of filmmakers find daunting. Don’t be
daunted.
Finding a fiscal sponsor is not really difficult. There are several across the
country. A little bit of Internet research will stand you in good stead. You’re
very likely to find a non-profit entity (arts funding or otherwise) in your area.
Ask to speak with the public relations office and find out more about what kinds
of programs they’re offering. Think of your project, whether it be documentary,
feature, multimedia, or video, creatively in terms of it’s proposed impact on
various things – society, children, politics, law-making, groundbreaking use
of technology, historical resonance. If your project falls outside the mainstream
of what the studios or other major filmmaking companies want, then create your
own category of blockbuster and figure out how to enlarge your audience – you
might surprise yourself.
Not all films need to have a mission to better the universe to qualify
for a fiscal sponsorship. However, you are asking for donations, so be
cognizant of the fact that someone is making a choice to put some of their money into your film.
It’s your responsibility to make it worth their while. This will
lead to long-term relationships with producers and other people who
have successfully assisted you in funding your project to move forward
with production, post-production, marketing, distribution, etc.
The fundraising hat for any filmmaker is often the least desirable role
one has to take on when there are only a handful of people (or just
you) to do all the selling for the film. But, it’s the
filmmaker-of-today’s lot so embrace it and educate yourself as
much as you can. Soon, you’ll be the “go-to” guy or
girl on behalf of other people’s projects and, poof, you’re
a mini-mogul with his/her own studio worth billions. It could happen.
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