The paperwork is being completed to transfer fiscal sponsorship from the nonprofit Food System Economic Partnership (FSEP) to Artrain, an arts and cultural organization. In a phone interview with The Chronicle, Gottlieb said the new sponsorship by Artrain means that FSEP will release the Selma Cafe funds that had been frozen, including $46,500 from cash donations.

In late March, FSEP had frozen funds it held on behalf of Selma Cafe and had set a May 31 deadline for organizers to find a new fiscal sponsor, or receive a 501(c)3 nonprofit designation from the IRS. If neither of those actions occurred, FSEP could take the Selma assets permanently, under terms of a memorandum of understanding between the two entities. FSEP’s board had decided to end its fiscal sponsorship of Selma Cafe because of what FSEP characterized as significant violations of the MOU’s terms.

At about the same time, Selma Cafe had been notified by the city of Ann Arbor of zoning violations. The violations were related to the location of the weekly breakfasts – in Gottlieb’s home, in the Eberwhite neighborhood on Ann Arbor’s west side. Because of those zoning issues, Selma Cafe suspended operations in mid-April. [For additional background, see Chronicle coverage: "City Notifies Selma Cafe of Zoning Violation."]

This week, Gottlieb said she’s close to securing a new location – or possibly more than one – for Selma Cafe to restart in some form. The basic format of guest chefs and volunteers will remain, with a focus on locally produced food and support for the farming community. But the previous weekly format will be reduced in frequency to once a month – at least initially. The monthly Saturday brunch would last from 9 a.m. until 1 p.m. Gottlieb hopes to hold the first one in late June.

Regarding Selma Cafe’s new fiscal sponsorship, Gottlieb made the connection to Artrain through Mark Braun, a musician known as “Mr. B” who attended high school with Gottlieb in Flint. He suggested approaching Artrain as a possible fiscal sponsor for Selma Cafe. Artrain had recently added “Mr. B’s Joybox Express Mississippi River Ride” to its roster of projects.

In a phone interview on Thursday with The Chronicle, Artrain CEO Deb Polich said the board approved Artrain’s fiscal sponsorship of Selma Cafe at its meeting in early May. She described the sponsorship as a “short-term reality” until Selma Cafe gets its 501(c)3 designation. If that doesn’t happen, then “we’ll work on a longer-term solution,” she said.

Polich reported that Artrain had set up a fiscal sponsorship program a couple of years ago, with a board-approved application process. Creation of the program was prompted by an individual artist who ended up not using it, Polich said.  So Selma Cafe is the first entity to go through the process. It’s not something that Artrain has promoted, she said.

According to FSEP board chair Ginny Trocchio, FSEP’s board approved the transfer of Selma Cafe assets at a board meeting earlier this week.

Gottlieb described Artrain as a better fit than FSEP, because Artrain is not asking for as much control over Selma Cafe’s operations. As a fiscal sponsor, Artrain’s main role will be financial oversight. In addition to the cash funds, Artrain will also be a fiduciary for about $110,000 in additional assets, including CD investments and loan payments related to hoop house kits and equipment.

As for the 501(c)3 application, Gottlieb said the IRS has agreed to give Selma Cafe’s application an expedited review.