Our situation was similar and putting the time and effort in on obtaining tax exempt status seemed like the best course for us to take. It has provided funding we never could have obtained otherwise. Too we have reaped additional benefits by belonging to our state’s non-profit organization. Their states non-profit organization probably has workshops on how to prepare the form or may be a good place for them to go for advice. I think they need to evaluate if seeking 501 ( c ) 3 status is worth it in the long run. How long does the team see itself existing? If this is something they are going to pursue for only a couple of years, then the 501 (c ) is probably not worth it. If they are in it for the long haul, then seriously consider it. There is a considerable amount of money that can be saved if they fill out the application on their own. We had to prepare our own because of cost. I suggest they also talk to people in their community to see if there is an attorney that would possibly prepare it pro bono. As far as the time element is concerned, I believe you can ask for donations while waiting on the application to be approved.
I am unfamiliar with fiscal sponsorship, so I cannot speak to that.
There is a document from 2008 that compares the two. http://fusionpartnerships.files.word...al-sponsor.pdf