The High Desert Community Foundation (HDCF) has announced it will end its fiscal sponsorship program on December 31, 2026, with operations expected to cease by the end of June 2027. This means the foundation’s sponsored projects will need to establish their own independent nonprofit status or find another fiscal sponsor.
HDCF’s decision, announced on July 30, affects more than just the foundation itself. The foundation had previously stated that its sponsorship program supports more than 30 community projects in youth development, healthcare access, food insecurity, and services for underserved communities. HDCF provides the projects with the financial, legal, and organizational structure needed that allows them to operate. The closure of the funding program forces nonprofits and community project leaders to consider what happens when multiple community projects depend on a shared nonprofit structure, and what happens when that structure gets taken away.
What fiscal sponsorship actually provides
Creating a nonprofit involves substantial paperwork and ongoing compliance, plus it takes time and money. Fiscal sponsorships allow a project to operate through an existing nonprofit organization rather than having the project create its own tax-exempt status. Fiscal sponsorships can provide the legal and financial infrastructure behind a project, such as managing funds, receiving charitable contributions, handling the accounting, and providing compliance support.
The case of HDCF introduces a broader question of whether continuity planning should be a part of every sponsorship arrangement right from the beginning.
While this is a more convenient option for new and smaller projects, one caveat is that dependency is created. While the project may control its own mission and programs, it will still rely on the infrastructure that allows the project to operate. If the sponsor is no longer able to provide that infrastructure, the project will need to find another way to manage its finances and legal compliance.
What happens to the projects?
HDCF’s wind-down offers a clear case study in what happens to projects that lose their financial and legal infrastructure. On its website, the foundation lists more than 30 current projects like Lucerne Valley Youth Project, The Apple Valley Schools Foundation Fund, High Desert Autism Support, and others. Right now, they have two options: find another fiscal sponsor before the program ends at the end of 2026 or establish and maintain their own California nonprofit corporations and 501(c)(3) status, a costly and complex undertaking.
And what happens to existing grants, contracts, donor relationships, restricted funds, records, and other obligations tied to the foundation? According to the National Network of Fiscal Supporters guidelines for comprehensive fiscal sponsorship, the sponsor assumes legal and financial responsibility for contracts and other binding commitments. It also calls for fiscal sponsors to have a process for termination.
For the projects, the question is not just about where their charitable status will reside next but how the financial, legal, and administrative relationships supporting their work will be transferred. This may mean taking on responsibilities that were previously handled by HDCF.
The case of HDCF introduces a broader question of whether continuity planning should be a part of every sponsorship arrangement right from the beginning. The National Network of Fiscal Sponsors guidelines call for processes that address how to end a sponsorship relationship.
How much do we know about fiscal sponsorship?
When announcing the closure of its sponsorship program, Ryan McEachron, president of the board, said, “The High Desert Community Foundation has been privileged to work alongside so many generous donors, dedicated volunteers, nonprofit organizations, and community leaders.” But no reason was given for the closure. “While this marks the conclusion of an important chapter in our organization’s history, we are incredibly proud of the lasting impact made possible through the generosity and vision of our community,” he added.
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The foundation’s most recent available Form 990 does offer a snapshot into the organization behind the program. The form reveals that in 2024 the foundation reported around $1,44 million in revenue, $1.6 million in expenses, and $1.8 million in net assets with only two employees listed. These figures do offer some context on the infrastructure that once funded more than 30 projects, but don’t explain why HDCF decided to close down its sponsorship program.
HCDF’s closure highlights that this visibility matters for the communities who are relying on the infrastructure.
HDCF’s closure introduces another challenge with fiscal sponsorship. The problem with fiscal sponsorship is that it can make it difficult for the public to see the finances of individual operations because the project doesn’t generally file its own Form 990. The organization, like HDCF, would report that financial information through itself.
But this transparency gap may be changing. In April 2026, the U.S. Department of the Treasury announced plans to revise Form 990 to improve transparency, strengthen tax administration, and provide clearer reporting on certain activities of tax-exempt organizations. This includes fiscal sponsorship arrangements.
This is not to say that HCDF was purposely hiding anything, but rather to make it easier for other nonprofits and project leaders to understand and examine fiscal sponsorship relationships. HCDF’s closure highlights that this visibility matters for the communities who are relying on the infrastructure.
What boards, funders, and sponsored projects can learn
For projects relying on fiscal sponsorship, HDCF suggests treating these arrangements as an ongoing organizational relationship. They should have a clear understanding of what happens when that relationship ends.
They need to ask themselves:
- Where will funds go?
- What will happen to contracts and other responsibilities?
- How much time will the project have to make the transition?
This can help projects anticipate and avoid disruptions from a disappearing infrastructure.
Fiscal sponsors should take the time to consider whether their agreements, contracts, and internal procedures address the process of termination and separation as the NNFS guidelines suggest.
The case of HDCF’s closure raises a final broader question for the nonprofit sector: If projects depend on shared infrastructure to operate, how should that same infrastructure and the real possibility of its disappearance be planned from the start?
