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A Non-Governmental Organisation (NGO) is a non-profitable charitable organisation. In India, NGOs established under Section 8 of the Companies Act are governed by the provisions of the Companies Act, 2013, while the NGOs established as a trust or society are governed by the state governments.
All NGOs work for the betterment of society and to help people in need. Since NGOs are non-profitable organisations, they need to raise funds to earn money for doing their work. This article provides how to get funds for NGOs in India.
Many international NGOs are transnational federations of national organisations, including Amnesty International, the International Federation of Red Cross and Red Crescent Societies, Save the Children, Oxfam International, World Wildlife Fund and CARE. In India, there is CRY (Child Rights and You), Care India and Smile Foundation.
The World Bank has identified two broad groups of NGOs, i.e. advocacy NGOs (organised to promote a particular cause) and operational NGOs (focused on development projects). NGOs can also be classified according to their orientation and operation.
The orientation-based NGOs are further classified as follows:
The operation-based NGOs are further classified as follows:
NGOs are non-profit organisations relying on various financing sources to fund their operating expenses. The funds are crucial because they support the NGO’s short and long-term aims. Thus, fundraising activities are necessary for the continuation and success of NGOs.
NGO funding is done by getting membership fees, selling goods and services, grants from other charitable foundations, state governments, municipal and private donors, donations from affluent individuals, etc. Despite their autonomy, many NGOs depend substantially on government subsidies and money for funds. Some government financing for NGOs could be considered contentious since it may promote political aims instead of a nation’s development.
NGOs are authorised to receive contributions from for-profit corporations, private citizens, non-profit foundations and governments, including state, local and foreign ones. NGOs can offer services and goods and collect membership fees as non-profit organisations.
NGOs can also get financing through gifts and donations, especially from unofficial groups or private individuals. Micro-enterprises, micro-insurance and micro-finance are some non-traditional resources for NGO funding.
In India, the government has put efforts into encouraging NGO financing. The government created an online portal, NGO DARPAN, to promote and create a healthy partnership between NGOs and the Government of India and speed up the financing process. The NGO DARPAN portal serves as an interface between NGOs and other government departments.
The portal facilitates the exchange of crucial information between government agencies, volunteer organisations and NGOs. NGOs can get vital information about government programmes and funds by signing up on the NGO DARPAN portal.
The government mandated NGOs to complete the NGO DARPAN online registration as of December 2019. NGOs require an NGO certificate to qualify for FCRA registration and apply for additional government permissions. Below is the NGO DARPAN portal’s registration process:
The following documents are required for the NGO DARPAN registration:
Donations made to NGOs are deductible under Section 80G of the Income Tax Act, 1961. NGOs must register under Section 80G and obtain the 80G certificate. When individuals or organisations contribute to an NGO, having a Section 80G certificate, the contributions are deductible up to 50% of their taxable income.
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