May 9, 2022

Homeward Bound

By Christina Drummond & Katherine Skinner

Many community initiatives we work with at Educopia are initially funded and administered as university-hosted, grant-funded efforts, i.e. “sponsored” projects. Early in such projects, when scholars and university staff are testing new ideas and approaches using external funding sources, university hosting and “sponsorship” provides efficient and effective administrative management and support. But as a collaborative effort grows, matures, and evolves, its services and activities might extend beyond the host university’s core research and education mission and thus require a new place to call home.

Many things can prompt the discussion of “rehoming” a collaborative effort. A key administrator who supported the project may retire, leaving the effort without an administrative champion, or a project PI may change jobs and be unable to continue to lead the effort at the university where it is based. Additional factors like new (diversified) revenue streams, staffing needs, community governance decisions or desires, product development challenges, and administrative capacity issues may prompt a community to leave its university “nest.”

Transitioning from a university-based home is not always easy or straightforward. Projects seeking sustainability require programmatic independence to be agile and responsive to market forces and lessons learned. They also need operational scaffolding for basic business continuity that is hard to create quickly or from scratch. Finding the right fit when rehoming out of a university requires an understanding of what options are available, what each option offers, and what limitations each may present.

Below, we provide a short list of tips gleaned from our experiences with a broad range of community clients over our last fifteen years of work. We hope this post will be helpful to project and community leaders who are thinking about transitioning into a new home.

Know what you need to seek the right partnership

Know what you have. By auditing the skills you have access to across your board members and founding project leadership, you will be best positioned to evaluate your options and find a partner that is a match for what you need at this moment in time.
Know what you want. Take the time to conceptually model your dream home as marriages of convenience are all-too-common and risky. To ensure a good match, take the time to fully understand how roles and responsibilities are shared and how a successful partnership is defined by both your project’s governance and any potential sponsor or hosting organization.
Know what is offered. Organizations have differing levels of experience acting as a fiscal sponsor, and not all provide the same grant reporting and administration, HR, fundraising, and legal support as universities. Some approach fiscal sponsorship as a strategic alliance while others view it as a direct, professional service. Nonprofits with fiscal sponsorship as core to their mission range from broad in focus to niche. Savvy scholars can ask if a fiscal sponsor is a member of the National Network of Fiscal Sponsors and refer to this common language of fiscal sponsorship models when clarifying expectations for sponsorship services.
Know if you want to learn from peer efforts. Some fiscal sponsors support similar types of projects, such as open science efforts, to allow their sponsees to learn from each other.
Know the restrictions. Clarify with potential sponsors how your near-term project operations and fundraising strategy could be impeded by the sponsoring organization, keeping in mind your expectations for long-term independence. Sometimes challenges surface if a fiscal sponsor can only submit one grant to a given program, but hosts multiple efforts vying to be selected for submission. Some sponsors can only pay for project staff in certain countries. If you are already planning on receiving funding from public agencies or hiring international staff, be sure to confirm your sponsor can support such activities.
Know what you may “owe” your original host. Remember, founding institutions very well may have an interest in generating longtail revenues from your project’s success and scholars must understand and follow their institutional policies around IP, especially if projects were conceived of through institutional and/or grant support. While tech transfer offices may be able to guide those interested in identifying venture capital and incubating as a for-profit start-up, universities do not always have officials able to advise scholars on the process for not-for-profit spin-offs.

Know your project’s worth

Potential host organizations may see value in a project for reasons beyond the grants attached. Similar to how for-profit start-up investors value startups by developmental stage ¹, public-good oriented start-ups can consider what they bring to the table in terms of intrinsic knowledge and technological IP, engaged community governance and strategic partners, and the size of their initial member or user community.
Projects with active revenue sources such as grants, membership fees, and donations signal strong community support and a higher likelihood of being self-sustaining, if not revenue generating. Be ready to share both current financials and project budgets as well as any financial sustainability roadmap with potential sponsors, as such information is often requested by sponsors as a part of their due diligence.
Knowing why a potential host or sponsor is interested in a project can help project leadership to negotiate terms that support a project team’s funder relationships and near-term sustainability goals. If a host’s decision-makers think they will be providing a favor to the project, while project staff expect professional levels of support and service, frustrations can grow to feelings of entrapment with dire consequences for mission-delivery on both ends.

Aim for clear communications

Educate yourself and your board and partners. While fiscal sponsor organizations have been widely used for over a decade in the nonprofit sector, awareness of fiscal sponsorship models in scholarly communications and the digital humanities varies widely and misconceptions abound. Project leadership should take the time to educate board members on the all-too-often invisible support provided by academic sponsored project offices to level-set for future conversations aiming to replace such institutional support that may have been available at low-to-no direct cost to the project.
Expect to be transparent about your project’s history, financials, and leadership at every stage in the process. Not only will such information be required by potential sponsors; ongoing transparency is necessary to keep everyone apprised of anticipated challenges, opportunities, and course corrections to avoid misunderstandings, legal liability, or other issues, nefarious or accidental.
Be on the lookout for unexpected cross-cultural language or jargon mismatches. For example, it wasn’t until after dozens of hours were lost during their search of a host that one project team realized the term “Secretariat” as experienced in international non-governmental organizations (NGOs) differed from the “Secretariat” function within international standards bodies, and that using this term with partners across both communities needlessly complicated hosting negotiations.
Put terms in writing up front, especially related to leaving a sponsor down the road. Many default sponsorship contracts are designed so resources and IP assets remain with a sponsor unless specified otherwise. Issues to address include indicators of when separation may be allowed or considered, the process and timeline by which separation would occur, what happens to project staff, funds and other assets during and after separation, packaging and transition of key operational functions (HR, accounting, legal), and communications (i.e. who can announce and how). The key is to clarify for all involved the permanence and terms of project sponsorship. If you don’t have access to pro bono legal advice through your governance, develop a plan to get it as you’ll want access to legal contract expertise throughout this process.

For scholars with limited time and energy, the easiest home to move into often becomes the only option explored. We hope this post helps to illuminate options to consider so that project leaders can guide their teams onward with increased perspective and confidence.

¹ See the Valuation by stage section at: https://www.investopedia.com/articles/financial-theory/11/valuing-startup-ventures.asp