An Overview of NGO CSR Consultancy

The Registered Companies under the Indian Companies Act, 2013 have a Corporate Social Responsibility which is also known as CSR, through which they contribute to the society by providing arms and various types of foundations from the date of their establishment. A few well-known Registered Indian Companies that are popular for their contribution to their Corporate Social Responsibility are Tata Group, Aditya Birla Group, etc. Corporate Social Responsibility has been a norm that has been practised in India for a long time.

In accordance with the Companies Act, 2013, which states a “Comply or Explain” mandate that specifies that Registered Indian Companies which a Net Profit of more than five crores for a year have to contribute to their Corporate Social Responsibility.

This mandate provides new possibilities for funding for Non-Governmental Organisations. However, there are a lot of Non-Governmental Organisations that have not been able to seek the benefits of this law and do not have access to the Corporate Social Fundings due to multiple concerns such as lack of initiative, lack of knowledge of the understanding of Corporate Social Responsibility Concept, lack of networking, etc.

Corporate Social Responsibility

Corporate Social Responsibility, which is also known as CSR, is a concept through which Registered Indian Companies contribute to the society by providing arms and various types of foundations that result in a positive impact on the society. Corporate Social Responsibility assists ethically in the maintenance of sustainability issues, social issues, etc.

Corporate Social Responsibility is a type of Management concept where Registered Indian Companies assist in providing aid to Social and Environmental Concerns that are integrated through their business operating process and their stakeholder interactions.

Corporate Social Responsibility grants funding and financial aid to Non-Governmental Organisations that are in need of raising Corporate Social funding. In accordance with Section 135, sub section 1, of the Companies Act, 2013, there are mandatory provisions that state specifically for contributing two per cent of their Company’s Average Net Profit. In accordance with the Companies At, 2013, the provision of CSR Regulations is applicable only for companies with a Turnover that is more than one thousand crores or the companies that have a Net Profit that is equal to or more than five hundred crores for the applicable financial year. All such companies are also required to have a Corporate Social Responsibility Committee of the Board.

Registrations Needed for CSR Funding to NGOs

The Registered Indian Companies contribute their Corporate Social Responsibility Funding to Non-Governmental Organisations which have –

• Certification of 80–G Registration that results in providing fifty per cent exemptions from taxes to be paid by the Corporate Social Responsibility Funding Donor Company
• Certification of 12–A Registration that results in providing exemptions from taxes to be paid by the Non-Governmental Organisations
• Non-Governmental Organisations Registration Certificate
• Foreign Contribution Regulation Act Registration which is also known as FCRA Registration for Non-Governmental Organisations that seek Corporate Social Responsibility Funding from Foreign Companies
• The applicable Non-Governmental Organisations that seek Corporate Social Responsibility Fundings have to make sure that all these documentation are in accordance with the applicable acts and needs to be submitted for Renewal each applicable year.

Brief on the 80–G Registration

The Income Tax Act has regulations that offer exemptions from taxes to Corporate Social Responsibility Funding Donor Companies. A Non-Governmental Organisation can apply for the issuance of Certification of 80–G Registration, which results in providing fifty per cent exemptions from taxes to be paid by the Corporate Social Responsibility Funding Donor Company. Prior to the Finance Act, 2020, Certification for 80–G Registration was only granted once unless there were any specifications mentioned for any restrictions that were mentioned in the certificate.

Brief on the 12–A Registration

The Certification of 12–A Registration is a registration that is granted only once issued by the Income Tax Department to Non-Governmental Organisations or Trusts. Certification of 12–A Registration results in providing exemptions from taxes to be paid by the Non-Governmental Organisations or Trusts, which is applied for immediately from the date of Incorporation in general.

Brief on NGO Registration

The Non-Governmental Organisations Registration Certificate is regulated in accordance with three acts, namely –

• The Indian Trust Act, 1882
• The Indian Societies Act, 1860
• The Companies Act, 2013

The Non-Governmental Organisations Registration Certificate is provided to Non-Governmental Organisations or any other applicable Charities that are involved in having a positive influence on the society, whether for a social cause or environmental cause.

Brief on FCRA Registration

For the purpose of receiving Corporate Social Responsibility Funding from Foreign Companies, it is mandatory to obtain a Foreign Contribution Regulation Act Registration which is also known as FCRA Registration Certification, for the applicable Non-Governmental Organisations in India. The Registration of FCRA Certification is regulated under Section 6 (1) of the Foreign Contribution Regulation Act, 2010.

Essential Points for NGO CSR Consultancy

The following pointers that are mentioned below need to be followed for having a clear organisation for the smooth functioning of seeking Corporate Social Responsibility Funding for Non-Governmental Organisations that Companies contribute for the purpose of their applicable Corporate Social Responsibility –

• Laying out a Structural understanding of the potential Corporate Social Responsibility Funding Donor Companies. The NGO that seeks funding from such companies can start by constructing a profile of the company’s preferences and policies and setting up a meeting session with the potential company’s Corporate Social Responsibility Committee or their Human Resources Personnel.
• Focusing on building the Non-Governmental Organisation’s Networking. The Non-Governmental Organisation can evaluate the listed profiles they have created of the potential Corporate Social Responsibility Funding Donor Companies.
• The Non-Governmental Organisations need to build their connections, especially with the stakeholders of the company or other personnel with higher authority, to boost their chances of the potential company contributing to their Organisation. A few options for building their network can be hosting events, conducting offline and online campaigns, etc.
• All necessary documents should be updated. Along with the legal documents, the potential Corporate Social Responsibility Funding Donor Companies also expect the Non-Governmental Organisations to have the following documents to be updated with correct information that plays an essential role in motivating them to contribute their Corporate Social Responsibility as these documents showcase the credibility of the Organisation –
• Evaluation Reports
• Impact Data
• Third-Party Evaluations
• Any other necessary document that strengthens the Non-Governmental Organisation’s chances of receiving the contribution

How can NGOs Generate CSR Funding?

The following pointers mentioned below are essential to be followed for Non-Governmental Organisations to increase their chances of CSR Contributions –

• Having a structural flowchart of the list of resources needed by the NGO. The NGO does not necessarily require funding but other resources such as volunteers. Companies also seek to provide support to Non-Governmental Organisations by providing financial aid through funding along with providing volunteers for their necessary projects.
• Always Seeking Feedback from the Current Corporate Social Responsibility Funding Donor Companies. The Non-Governmental Organisations need to maintain an interactive bond with their current donors. On taking feedback from the current donors and implying them to the NGO’s project strategies make the Company feel valued and help build a stronger bond and increase integrity and trust, resulting in the Company donating to the organisation frequently.
• Meeting the Set Expectations. On meetings conducted between the Non-Governmental Organisations and the potential company’s Corporate Social Responsibility Committee or their Human Resources Personnel, there are certain targets set on how the contributed financial aid is to be utilised. The Non-Governmental Organisation is expected to meet those targets within an appropriate set duration. It is also essential as this showcases the NGO’s impact on the appropriate community and builds trust between both parties resulting in the Company donating to the organisation frequently.

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