NGOs intending to receive funds and donations from other countries should first register under the provisions of Foreign Contribution Regulation Act, 1976.
The NGOs cannot take foreign contribution directly. For this purpose they should be registered under the Foreign Contribution Regulation Act 1976, commonly known as the FCRA.
There can be two types of contribution from the foreign source, i.e. one time or expected more than once and even regularly.
For any one time contribution the NGOs can receive the amount by seeking prior permission of the FCRA Section of the Ministry of Home Affairs, Government of India; whereas for multiple and regular contributions of the foreign source it is advisable to seek permanent registration from the said Ministry.
BENEFITS OF FCRA REGISTRATION
- NGO can avail foreign funding various foreign sources.
- NGO can approach various Foreign Financing Companies to avail foreign Funding for their projects
KEY POINTS FOR FCRA REGISTRATION
- NGO should be at least three years old.
- It does not have a parent Society which is already registered under FCRA.
- Majority of the members of the board should not be on the board of another Society, which is already registered under FCRA.
- The parent society of the applicant, if any, should not be based abroad.
- No foreigner is on the board of the society.
Ministry of Home Affairs does not grant a registration without ensuring the above major issues.
FCRA BANK ACCOUNT
it is essential to receive foreign contribution only in one designated bank account. Therefore, the applicant organisation should open a fresh bank account with the intention to operate it for such funds and mention it in the application. The said Ministry will directly inform the concerned bank to keep watch on the use of the foreign contribution and report back to the Ministry in case of any discrepancy.
VALIDITY OF CERTIFICATE
Every certificate of registration granted to an organisation under the Act, shall be valid for a period of five years from the date of its issue.
CANCELLATION OF FCRA REGISTRATION
There are various reasons to cancel FCRA Registration of NGOs.
- If NGO has not utilized the fund given by Foreign Donors in a proper Manner or used for personal interest.
- If NGO fails to submit yearly Compliance to the Government Authority.
- If Government received Complaint that NGO is not working properly.
- Societies Registration Act, 1860, Indian Trust Act , 1882,Charitable & Religious Trust Act 1920,Sec 25 of Companies Act 1956,Sec 8 of Companies Act 2013
- The FCRA registration is granted only to such association, which has proven track record of functioning in the chosen field of work during last three years, and after registration, such organization is free to receive foreign contribution from any foreign source for stated objectives.
- Organization should be in existence for at least three years and has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilised.
- Organization should have spent at least Rs.10,00,000/- over the last three years on its activities, excluding administrative expenditure. (Statements of Income & Expenditure, duly audited by Chartered Accountant, for last three years are to be submitted to substantiate that it meets the financial parameter.
WHO CAN APPLY