Define: Feeder Organization

A feeder organisation is a term used to describe a nonprofit organisation that raises funds or provides resources to another organisation, typically a larger nonprofit or charitable entity.

Unlike a regular nonprofit organisation, a feeder organisation does not directly carry out charitable activities or programs. Instead, it supports and contributes to the work of another organisation by providing financial assistance or resources.

While the primary purpose of a feeder organisation is to support another organisation, it is not uncommon for feeder organisations to engage in some limited charitable activities of their own. However, these activities are usually secondary to their main role of supporting the designated organisation.

Feeder organisations typically raise funds through various means, such as soliciting donations from individuals, corporations, or foundations, organizing fundraising events, or applying for grants. The funds raised are then transferred to the designated organisation.

Yes, feeder organisations are generally required to register as nonprofit organisations with the appropriate government authorities. This ensures compliance with legal and regulatory obligations, including tax-exempt status and transparency in financial reporting.

Yes, a feeder organisation can support multiple organisations simultaneously or over time. However, it is essential to establish clear guidelines and criteria for selecting and supporting these organisations to ensure transparency and accountability.

The transfer of funds from a feeder organisation to the designated organisation can occur through various methods, such as direct bank transfers, checks, or electronic payment systems. It is crucial to maintain proper documentation and records of these transactions for transparency and accountability purposes.

In some cases, a designated organisation may provide financial support to its feeder organisation. However, this arrangement should be carefully structured and documented to avoid any conflicts of interest or misuse of funds.

Feeder organisations are subject to the same legal requirements as regular nonprofit organisations, including compliance with tax laws, financial reporting, and governance regulations. It is essential to consult with legal professionals to ensure compliance with all applicable laws and regulations.

Yes, a feeder organisation can change its designated organisation if the need arises. However, this process typically requires careful consideration, proper documentation, and compliance with any legal or contractual obligations associated with the existing designated organisation.