Can You Fund Raise Without Being a 501(c)(3)?

The short answer to this question is "yes".  Please note that there is a difference between "raising funds" and applying for grants from a foundation or government entity.  The latter does require the 501(c)(3) status almost without exception. 

Many very new or small nonprofits have community fundraisers, or solicit small donations from the general public, and do not have the Internal Revenue Service (IRS) determination letter. Many smaller charities raise funds online without the formal IRS determination letter.   I always suggest to prospective clients that they develop a complete fundraising strategy, and this is where most of them start, or have started previously.  It's the "baby-steps" part of being a successful nonprofit. 

You WILL need to register as a nonprofit corporation with your state, or apply to an approved 501(c)(3) for a "fiscal sponsorship".  As an non-sponsored, state-registered-only nonprofit you are not allowed to state that donations are tax-deductible, which may affect your ability to accept large donations.  

Since each state may have different regulations regarding fundraising and nonprofit registration, you should consult your state attorney general's office or a knowledgeable attorney concerning the requirements for your specific state. 

Fiscal sponsorship allows you to solicit funds, including grant funds from some donors, by utilizing the larger nonprofit's 501(c)(3)status.  In general, you apply for affiliate status with the charity. Some of them will list the requirements on their website, while you may have to approach others with a letter of inquiry, and many do not accept affiliates at all. 

The larger NPO will have basic requirements that may include furnishing them with documentation related to your activities, including program descriptions and budgets, governance, organizational and fiscal history, board member list and proof of state registration. In addition, they may require you to relinquish some control of the program(s) to them, or at least allow them to inspect or review your procedures and provide them with proof of success or impact.  

Again, do your due diligence. There are very specific requirements from both a tax and legal standpoint that you should investigate thoroughly, as well as investigating the fiscal sponsor  to be sure they are reputable, well-run, and representative of your goals.  If possible, try to meet personally with them, since you will be working very closely with their staff. As in any relationship, the chemistry has to work for both sides.