NYMC-NYCMT Partnership FAQ

There is an active proposal that New York Math Circle (NYMC) and New York City Math Team (NYCMT) form a partnership, in which NYMC will become a Fiscal Sponsor of NYCMT and set up a restricted fund for the Math Team.

Here is the proposed Fiscal Sponsorship Agreement.

This page is formatted in FAQ format to answer the questions about this proposal. Please email with additional questions.

  1. Why change anything?
  2. For many years, money has come from DOE, and lived in a special account. That dried up years ago. Since then the money has lived in an account of Stuyvesant Alumni Association (as far as we know). There are concerns that a non-Stuy head coach would not be able to use this money. There are also concerns about transparency and accountability: it’s hard to know what money has been given to Stuy Alumni Association earmarked for Math Team, and whether it was actually spent on the Math Team.

    NYMC offers a restricted fund designated for the Math Team, with a Fiscal Sponsorship agreement that spells out certain rights for NYCMT to this money, restrictions against using this money for other purposes, and the right for NYCMT to take this money out, e.g. by starting a separate non-profit.

  3. Why non-profit?
  4. NYC Math Team needs to raise money. People and organizations prefer to donate money if they can deduct them from their taxes. It requires the receiving organization to be tax-exempt. NYMC is a tax-exempt 501(c)(3) organization.

  5. Can’t NYMC just accept donations for Math Team without any special agreement?
  6. Yes. But without an agreement, there is nothing that gives Math Team coaches any rights over the money donated to NYMC. The agreement spells out these rights, including the possibility of taking Math Team money out of NYMC if the partnership doesn’t work out.

  7. Why not form an independent non-profit?
  8. It’s a possibility. Forming a non-profit involves a somewhat painful and long process to register and get a tax-exemption, and annual IRS filings and other requirements. These aren’t fun. Since NYMC is already doing all this, and the Math Team activities fit well within NYMC’s tax-exempt purpose, this administrative burden can be shared.

    The Fiscal Sponsorship agreement explicitly leaves open the possibility for NYCMT to form an independent non-profit and split off from NYMC, taking its restricted fund with it.

  9. Why rush with this?
  10. NYC Math Team has virtually no money in the Stuy accounts, so we need to fundraise actively, now. When we fundraise, we need to tell people who to write the check to. The currently availble options are basically limited to Stuy Alumni Association, and NYMC. Either way, we feel that it’s important to have an explicit agreement that NYCMT has some rights to this money.

  11. Does this mean that NYMC will support the Math Team financially?
  12. That’s unlikely. NYMC does not have excess income or support, so the Math Team cannot count on financial support from NYMC. The purpose of the partnership is to make it easier for the Math Team to do fundraising.

  13. Does this mean that if Math Team can’t raise the money, NYMC is on the hook to raise it?
  14. Legally, no. NYMC is obligated to ensure the money in the restricted fund is spent for Math Team purposes; but if there is no money, there is no obligation. Morally, we at NYMC feel like we should help and make sure MT activities happen as planned. That’s in fact what several of us at NYMC are doing, we are just wearing our Math Team hats while helping the Math Team. We need to raise new money for the Math Team, however, since NYMC barely makes its own ends meet.

  15. Why does the agreement say that NYCMT becomes a “project” of NYMC, subject to NYMC’s ultimate discretion?
  16. That’s because when NYMC receives a tax-deductible donation, it has a responsibility to the IRS to spend the money within NYMC’s declared tax-exempt mission (which is wide enough to include Math Team activities). As long as NYCMT uses the money as intended, all is fine. But ultimately, NYMC has the legal responsibility, so NYMC has the ultimate discretion.

    This arrangement is mainly to protect NYMC’s tax-exempt status. If the Math Team uses its funds in disallowed ways (e.g. for political campaigns, or private inurement), NYMC’s status would be jeopardized. Since the funds are given to NYMC, it has the fiduciary responsibility over them and so needs to oversee how they are used.

  17. Can NYMC dig into the fund earmarked for Math Team?
  18. No, except for Math Team purposes. The agreement says so. It even protects the Math Team fund from creditors in case NYMC is in debt for unrelated reasons.

  19. How do Math Team head coaches use the money in the restricted fund?
  20. There will be a separate bank account with a checkbook, as well as a credit card. Either a head coach, or a NYMC person involved with the Math Team, or both, will have a credit card, and signature on file with the bank to be able to write checks. All income and expenses would have to be reported promptly to NYMC, because they will show up in NYMC accounting, and will be reported in NYMC annual filings.

  21. What if NYMC isn’t nice, and makes it hard to use the Math Team money?
  22. Then Math Team can form its own 501(c)(3) or find a better fiscal sponsor, and move out, taking the restricted fund with it. The agreement spells out this possibility.

  23. If the agreement is terminated, why do we require that the Math Team fund move on to another 501c3? Why this restriction?
  24. When donors give money to NYMC for Math Team purposes, they deduct them as charitable contributions. So we can’t turn around and transfer their money to some for-profit, for example. We can only transfer it to another charitable organization that offers the same tax deductibility.

  25. Why does the Math Team have to get NYMC approval for fundraising?
  26. There are legal regulations about fundraising, e.g. we can’t misrepresent what we are soliciting donations for. The responsibility for compliance lies with the NYMC board of directors, so NYMC needs to be able to monitor compliance.

    It’s also important that donors realize that by donating to “NYCMT”, their money goes to NYMC, and that although it will be used for Math Team purposes, NYMC has the ultimate discretion over it.

    On the other side, donations may come with conditions, for which NYMC is ultimately responsible. Also, some donations may affect NYMC’s public charity status. All these possibilities mean that NYMC needs to approve the solicitation and acceptance of donations and grants.

  27. Does this mean that NYMC will have to coordinate MT fundraising with its own, e.g. when approaching the same person or entity?
  28. Yes. It certainly makes sense to coordinate when requesting support from the same people. Such coordination can only be easier if NYMC and Math Team work together than if they are separate organizations.

  29. Might participation in NYMC classes imply partiality of selection for MT? Would this partnership shift NYMC’s mission towards competitive, time-pressured math activities?
  30. The answers are up to NYMC and Math Team people, but there is no reason why either organization should shift towards any bad ideas. E.g. Math Team has a focus on contests while NYMC has never been contest-centered, and they can (and should) stay so.

  31. Wouldn’t it be best to set a specific timeframe for Math Team to become fully independent?
  32. There are benefits to staying together, given that both organization have similar missions (math enrichment), and many of the same people are involved in both. If the relationship does not work out well, it’s certainly best that the Math Team become completely independent. If it does work well, it should be possible to continue the relationship indefinitely, perhaps with some modifications.