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!