{"id":29286,"date":"2021-04-23T12:30:49","date_gmt":"2021-04-23T07:00:49","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=29286"},"modified":"2021-11-19T16:23:51","modified_gmt":"2021-11-19T10:53:51","slug":"ngos-intending-to-receive-foreign-funding-governments-new-rules","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/ngos-intending-to-receive-foreign-funding-governments-new-rules\/","title":{"rendered":"NGO\u2019s Intending to Receive Foreign Funding: Government\u2019s New Rules"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Non \u2013 governmental organisation (NGO) is a widely accepted term for referring to a legally constituted body working for a social cause for uplifting the society. NGO is created by natural or legal person without any representation or participation by the government. The major function of the NGO is to give its commitment for the social justice, human rights and sustainable development. They are mainly focused and committed to the right to information for the under-represented people and to promote the sustainable development initiative in response to the needs of the marginalised sectors and of the society. Hence, as <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGO<\/strong><\/a> is working for so many causes it receives a huge support in the form of contribution and charity from the individuals, companies, government funding, foreign funding and other multiple agencies. In this article, we will know about those NGO\u2019s intending to receive foreign funding and the government\u2019s new rules associated with it.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/ngos-intending-to-receive-foreign-funding-governments-new-rules\/#Governments_New_Rules_on_Foreign_Funding_to_NGO\" >Government\u2019s New Rules on Foreign Funding to NGO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/ngos-intending-to-receive-foreign-funding-governments-new-rules\/#What_are_the_Key_Highlights_of_the_Notification\" >What are the Key Highlights of the Notification?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/ngos-intending-to-receive-foreign-funding-governments-new-rules\/#What_could_be_the_Possible_Impact_for_Changes_Made_in_FCRA\" >What could be the Possible Impact for Changes Made\nin FCRA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/ngos-intending-to-receive-foreign-funding-governments-new-rules\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Governments_New_Rules_on_Foreign_Funding_to_NGO\"><\/span>Government\u2019s New Rules on Foreign Funding to NGO<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On September 28, 2020 a new&nbsp;law was signed with\nthe purpose to greatly constrict and limit the existing&nbsp;Foreign\nContribution Regulation Act (FCRA). FCRA is the foundation law that regulates\nand manages on how the nonprofits in India are able to receive the foreign\nfunding, including from U.S.-based foundations and other corporations.&nbsp;<\/p>\n\n\n\n<p>The law is expected to impact the ways how the\nfoundations and corporations make grants to Indian NGOs, in several important\nways. In the\nnotification, the home ministry has asked the office bearers of the NGOs\nlooking for the registration under the Foreign Contribution (Regulation) Act that\nthey must mandatorily submit the specific letter of commitment from the donor\ndemonstrating the amount of the foreign contribution and the purpose behind its\nproposal has to be given.<\/p>\n\n\n\n<p>The FCRA rules were brought after two months since the central government has amended the law making it mandatory for the office bearers of the NGOs to provide with their Aadhaar numbers. The profit of the office expenses were lessened to 20 percent of the amount and all the election candidates, political parties, government servants, legislature members were prohibited from accepting the foreign funding.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-fcra-registration-makes-easy-foreign-contributions-process-for-ngos\/\">How FCRA Registration Makes Foreign Contributions Process Hassle-Free for NGOs?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Key_Highlights_of_the_Notification\"><\/span>What are the Key Highlights of the Notification?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Under section 12 (4) (b) of the Act&nbsp; if any person is seeking registration, then he shall conform to the following conditions, namely:\u2013 <\/strong><\/em><\/p>\n\n\n\n<ul><li>It should mandatorily be in\nexistence for three years and must have spent a minimum sum of rupees fifteen\nlakhs on its major and core activities for the advantage of the society throughout\nthe duration of last three financial years.<\/li><li>In accordance with the\nprinciples, if any particular person or any NGO making an utility for the\npurpose of obtaining the prior permission to receive the foreign funding shall already\nhave an FCRA Account.<\/li><li>FCRA is made stringent by\nprohibiting the transfer of the funds from one NGO to other, and also has decreased\nthe administrative expenses through the foreign funds from the earlier 50 per\ncent to 20 per cent, besides making aadhaar&nbsp;obligatory for registration,\nand given the government the powers to end utilisation of the foreign contribution\nthrough a summary enquiry.<\/li><li>Every member of the NGO by\ntaking an oath must certify that they have not been involved in\n&#8220;diverting&#8221; any foreign funds or indulged in propagating\n&#8220;sedition&#8221; or &#8220;advocating any violent means\u201d through an\naffidavit<\/li><li>Earlier only the\napplicants and the persons on director-level were responsible to give this\ndeclaration but now it is mandatory for all the members of the NGO to give this\ndeclaration.<\/li><li>The Centre said that in\ncase where the value of foreign funding is above Rs one crore, it may be agreed\nto be given in installments but subject to the condition that the subsequent and\nsecond installment shall be given only after submitting the proof about the\nutilisation of 75 per cent of the foreign funding that is received in the\nprevious installment. It will be allowed only after the field inquiry of the use\nof the foreign contribution.<\/li><li>According to the market\nvalue of the gift item in India, earlier it was Rs. 25,000, but now it has been\nincreased to the sum of Rs. one lakh.&nbsp;<\/li><li>If any person from NGO\ngets hospitalized anytime during his foreign visit, then within one month such\nperson has to intimate the Government.<\/li><li>Centre has inserted Rule 9 \u2013\nwhich has made it mandatory for seeking prior permission or obtaining\nregistration to receive the foreign funds.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_could_be_the_Possible_Impact_for_Changes_Made_in_FCRA\"><\/span>What could be the Possible Impact for Changes Made\nin FCRA?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Within the law, there are four major changes that will most probably impact the grant makers that are supporting Indian grantees: &#8211; <\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/What-could-be-the-Possible-Impact-for-Changes-Made-in-FCRA.png\" alt=\"Possible Impact for Changes Made in FCRA\" class=\"wp-image-29307\" width=\"501\" height=\"651\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/What-could-be-the-Possible-Impact-for-Changes-Made-in-FCRA.png 769w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/What-could-be-the-Possible-Impact-for-Changes-Made-in-FCRA-231x300.png 231w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/04\/What-could-be-the-Possible-Impact-for-Changes-Made-in-FCRA-768x999.png 768w\" sizes=\"(max-width: 501px) 100vw, 501px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Re-Granting Relationships are Not Permissible<\/h3>\n\n\n\n<p>Any grant made to Indian NGO will not permit sub-granting\nor re-granting. This means that those funders who presently use FCRA-registered\nnon profits as a re-granter may no longer support other FCRA-registered Indian\nnonprofits. Furthermore, the Indian nonprofits that provide as lead\nimplementers on a particular project will now no longer be able to create\nsub-grant relationship with other nonprofits using the foreign funding.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">State Bank of India Accounts Required<\/h3>\n\n\n\n<p>Earlier, those nonprofit organizations receiving foreign funding under the FCRA was required to create their account in any government-approved bank. Under the recently amended FCRA, it is mandatory for all those nonprofits to create and solely use their new account with the State Bank ofIndia at <em><strong>New Delhi<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/New_Delhi\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Administrative Expenses Capped at 20% (instead of 50%)<\/h3>\n\n\n\n<p>Under the existing FCRA, the administrative expenses\nare capped from the earlier 50% to now 20% of the received foreign funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Nonprofits Can Forfeit FCRA Status<\/h3>\n\n\n\n<p>Under the amended FCRA, there is now a way for the nonprofits in India to voluntarily forfeit their <a href=\"https:\/\/corpbiz.io\/fcra-registration\"><strong>FCRA registration<\/strong><\/a> but the assets that are formerly created with the foreign funds will have to be transferred to the proper government arm.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With the Government\u2019s new rules on the NGO\u2019s intending to receive foreign funds it will bring more accountability and transparency in the non profits sector. Hence, this will lead to betterment of the NGO sector with strict budgetary provision and promoting humanitarian works. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/process-to-get-fcra-registration-online\/\">What is the process to get FCRA registration?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Non \u2013 governmental organisation (NGO) is a widely accepted term for referring to a legally constituted body working for a social cause for uplifting the society. NGO is created by natural or legal person without any representation or participation by the government. The major function of the NGO is to give its commitment for the [&hellip;]<\/p>\n","protected":false},"author":33,"featured_media":29306,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[1686],"acf":{"service_id":"407"},"authorName":"Kandarp Vanita","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/image_2021_02_01T09_09_44_024Z.png","authorDescription":"Kandarp Vanita has done masters in Corporate and Commercial Law from WB National University of Juridical Sciences. She has 3 yrs of experience in drafting legal documents &amp; dissertations. Being a curious reader, she is also passionately into providing legal backups and comprehensive understandings in every aspect of Law to the firms.","postViews":5337,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29286"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=29286"}],"version-history":[{"count":10,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29286\/revisions"}],"predecessor-version":[{"id":29308,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29286\/revisions\/29308"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/29306"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=29286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=29286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=29286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}