Indian NGOs and Foreign Funding

NGOs and nonprofits in India play a vital role in the development and upliftment of the weaker sections of society. Majority of the Indian population is below the poverty line, with most people not having access to basic needs of food, water, and shelter. In fact, for people of lesser means, even access to education is considered a luxury rather than a necessity. Despite Government funding, we are still not able to tackle problems of poverty, unemployment, hunger, lack of  shelter, sanitation, clean water, and electricity, in all parts of India. It is the selfless operations of nonprofits and NGOs, that are undertaking necessary development projects to further our country’s growth story.

 

However, they have to rely on non-government sources for funding, and in the recent past, foreign funding and NRI donations have come as a blessing to them, and the country overall. In the past, Indian NGOs have raised more than INR 8,500 crores annually from international donors. Several Indian NGOs are establishing partnerships with overseas corporates, to ensure financial stability for their social operations. A huge part of this can be credited to the FCRA (Foreign Contribution Regulations Act), which was implemented in 2010, allowing NRI (Non resident Indians) and POI (People of Indian Origin) to make donations to NGOs in India. The benefits of the foreign donations to Indian NGOs are manifold –

 

NGOs can conduct operations on a larger scale

Earlier, Indian NGOs relied on philanthropic individuals, small donations, charitable trusts, and more recently, CSR initiatives for their projects. While these sources played a major role in kickstarting India’s social development journey, innumerable nonprofits and NGOs were forced to shut down operations or were limited to very small areas due to the shortage of funds. Adding NRI donations to the equation was hugely beneficial for them to scale up activities, especially since donations would usually be of higher currencies, and have greater value in India.

 

Financial stability and sustainability

NGOs and nonprofits have recognized the opportunity to gain financial stability by forming strategic partnerships with international donors, so that their operations can have long term sustainability. For instance, crowdfunding platform for NGOs in India – Impact Guru, recently entered into an exclusive partnership with Global Giving, which allows international donors in UK and USA to contribute towards campaigns on their platform.

 

NGOs are made accountable for utilization of funds

As per the rules stated by the Ministry of Home Affairs, NRIs can only give foreign donations to Indian NGOs if they are registered under the FCRA. Registering under the act makes them eligible to get foreign funding, but it also makes them accountable to share the details of their operations and be completely transparent about the utilisation of funds received. This is because they are required to annually submit income and expenditure accounts, as well as their balance sheet. It is a great way to avoid fraud and money laundering cases.

 

NRIs get a chance to give back to their country

Indian who live far away but still want to participate in social and community building activities get a chance to do so by making contributions towards causes they care about. Online donations through crowdfunding platforms like Impact Guru have made it very easy to transfer funds for causes and initiatives in categories ranging from poverty, education, environment, medical expenses, and so much more. This way PIOs and NRIs have a way to give back to their country.

 

Tax benefits are a great incentive

Giving foreign donations to Indian NGOs allows NRIs and PIOs to get tax benefits, which can be claimed in their country of residence. This is a huge incentive for NRIs to participate in Indian social development activities.

 

Having discussed the benefits of foreign funding to Indian NGOs, we urge all nonprofits and NGOs to register themselves under the FCRA, as well as start fundraising campaigns on crowdfunding platforms like Impact Guru, that are affiliated with notable international donors.
Receiving foreign funding can take your social project to the next level. Get started today!

Annual Fundraising Strategy for Nonprofits

Having a detailed and a strategic plan before starting your fundraising efforts is probably the best advise anyone who has had experience in this field will give to the nonprofits. Planning out every activity gives you and your team a sense of direction and a goal to keep aiming for. More often than not, the success of your crowdfunding efforts depends on your initial strategy. The best thing that can come out of detailed planning is that you get to learn from the past. As each year goes by, you will better understand the nuances of the philanthropic world, as well as the fast-growing method of online crowdfunding in India.

The best crowdfunding plans should have answers to every possible question that a potential donor may have, from the NGOs, before contributing to the cause.

 

This article offers a six-step fundraising strategy and planning process for anybody who is beginning fundraising efforts for their NGOs –

 

Step 1: Analyze past figures

Learn from your mistakes. This is a key suggestion for any kind of organization. Put together your income and expenses from the previous year to know your spending pattern. Analyze where you can cut down costs and where you need to dedicate more time and resources. Evaluate the sources that brought in money, and the sources that didn’t. A good way to do this is to make a chart of the previous year, and then consequently make one for the year to follow. This step will help give you more accurate projections for income and expenditure in the next year. It should include all costs associated with advertising, campaigns, overheads, travel, food, staff payments, and every other cost related to your NGO or nonprofit.

 

Step 2: Have a mission

In simpler terms, determine the philosophy of your organization. Your annual fundraising campaign should begin with giving details about your background, your team, your vision, your goals, and most importantly – your current efforts. It is necessary to have a firm positioning about these details from the very beginning, because it may reflect instability and unreliability if you change your vision and mission in the middle of your crowdfunding campaign. It would be good to include some noteworthy achievements from the previous year as well, as it helps to create goodwill for your nonprofit initiative.

 

Step 3: Gather your resources

Your online fundraising resources are all the assets (fixed, variable, tangible, intangible) that make your crowdfunding campaign successful. This includes people, money, materials, and equipment. Assign a tangible value to each of these resources. This step is also important when it comes to budgeting your expenses for the year.

Another vital part of your resources is your team. Be sure to put together a strong team of like-minded individuals, with the same ideals and goals for the NGO. Having said that, it might be beneficial to have a mixed bag of people with different professional and lifestyle backgrounds, as they will be able to bring in a lot of varied ideas and insights owing to different experiences. Ensure that each member has a specific skillset that will be used to further your cause, such as, strategy, communication, accounting, social media, etc.

 

Step 4: Budgeting

The first step of this annual fundraising strategy was to put together the numbers and figures from the past year and analyze them. We suggested making a chart for the same. Assuming you have all your information together, that chart will tell you so much about from where did your income come in the most, where do your heaviest expenses lie, where you can cut down costs, which departments need more attention, which resources are most valuable to you. Your analysis should include the following costs:

  • Staff payments
  • Overheads (rent, electricity, etc.)
  • Advertising
  • Cost of communications (includes designing, printing, stationary)
  • Consultations
  • Food and travel
  • Events
  • Other miscellaneous expenses

This way you will be able to make an accurate estimation of your income and expenditure in the following year.

 

Step 5: Set up a network

Taking previous years into consideration, analyze the sources from where most of the income is being generated. This will help you with segmenting the market, and knowing exactly where your donor base is. When you have a fixed target market, you can direct your cost of advertising, campaigning, and communication efforts towards them. For instance, if most contributions are coming in from CSR activities by big business, then that’s where your audience lies. You can even consider combining your online fundraising efforts with offline engagement events, which will grow your network of donors and open up more options for future collaborations.

 

Step 6: Set goals and timeframes

Each year, your fundraising campaign should have a new goal. The most common goals include the following:

  • Expanding operations to other parts of the city or country
  • Acquiring new donors with a fresh fundraising strategy
  • Engaging your current donors in fundraising activities

 

There are two ways of setting these goals. You can either have one goal for the entire year, and direct all your efforts and resources towards achieving it, or you can give a fixed time frame to each of these goals by distributing it throughout the year. For instance, the first six months can be dedicated to expanding operations, the next quarter will be dedicated to acquiring new donors, and the last three months will be occupied with engagement activities for current donors.

Having a rough idea of what you want to achieve in the year to follow is not enough information to go by, and this will become glaringly obvious, the more often you start making strategies for your mission.

It is not an easy task to plan your fundraising strategy with such great detail. But once you’ve done it, you will find that it has the potential to make your job so much easier. We also suggest some amount of transparency with your crowdfunding team, so that everyone in the organization is up-to-date with the current status, as well as with future goals.

So here it is, we hope this six-step guide helps you better plan your crowdfunding activities for the next year!

Ready to create a fundraiser for your nonprofit organization now?

Good luck!

What the Budget of 2017 means for crowdfunding in India

The budget 2017 has brought both challenges and opportunities to the nonprofit sector in India. The two main announcements that impact the development sector are expected to completely change the landscape of how people do charity and how nonprofits accept it. The first is the cut down on the limit of cash donations one can make, second is the alterations in the tax exemption clause.

 

The recent demonetization move in India revealed what digital India will look like in the years to come. That said, social problems won’t be going away anytime soon, so the need to fundraise is indispensable.

Let’s discuss what the Union budget announcements of 2017 will mean, and how they will impact the world of crowdfunding.

 

Reduction in amount of cash donation

 

SOLAR ENERGY (2)

 

The amount of cash that one can donate anonymously to an organization has been reduced from Rs 10,000 to Rs 2,000. This is a major crackdown on political funding. It is a bold step towards curbing illegal activities and money laundering that nonprofits may be involved in. In any case, it will always be more beneficial for a genuine donor to give donations with proper documentation and through registered banks because it will add credibility and accountability to the organization’s utilization of the funds.

 

So what does this mean for crowdfunding in India? It means that nonprofits need to start embracing technology and digital tools to raise money for their cause. No longer can they sustain themselves in this competitive ambiance, by using traditional methods of fundraising. They will have to invest their efforts in online fundraising platforms such as Impact Guru.

 

Removal of clause 35AC

 

SOLAR ENERGY (3)

 

Clause 80G allowed a tax rebate of almost 50% and 35AC of almost 100%. The union budget 2017 announced the removal of clause 35AC, which has been a cause of worry for the development sector. It allowed 100% tax exemption to individuals and companies that donated to certain specific charities that are required to be verified by the central government. Experts believe that removal of this provision will also remove the most valuable incentive that motivates people and organizations to donate.
With regards to crowdfunding, it means that nonprofits will have to use newer and more creative techniques that incentivise people to donate. Online crowdfunding platforms use digital and social media tools, as opportunities to draw in funds. 

Therefore the time has come for more people to shift to such platforms and create new processes to sustain that conducive environment for giving in such times of unpredictable dynamism. 

More and more charities have begun to see the need for digitization in achieving their social mission, and the announcements in the Union Budget of India 2017 seem to be a positive catalyst for it. It remains to be seen how nonprofit organizations react to the changes that are coming their way.

For any queries regarding online donations, you may visit Impact Guru and speak to our fundraising consultants for more clarity on recent developments.