Considerations For NGO’s To Get Foreign Funding


In every country, it is the law, that whenever foreign exchange enters into their country, the recipient of such should get the previous permission of the government. It is applicable for all countries. There are specific rules and regulations provided by the Indian government that irrespective of a corporate, organization or any entity, should get prior consent from the Home ministry of India in respect of their foreign currency dealings.

In such a way, the Non-Profit organization must apply for prior approval to get the permission of the Government of India and at the appropriate departments to obtain overseas funds for their projects. A certificate called FCRA under the Foreign contribution regulation Act will be issued to the Non-Profit Organization seeking for foreign funding.

When the Non-Profit Organization deals with an FCRA project, separate bank account, separate accounting procedures, must be followed. Moreover, there are several other flexible rules regarding FCRA fundraising project.

There are numerous foreign funding agencies and trusts that back commendable causes such as Bill & Melinda Gates Foundation, Ford Foundation, DFID, USAID, NORAD etc. It is possible to get such foreign funding provided they are well sensitized and are approach at the right level.

Foreign source includes:

  1. The Government of any foreign country or territory and agencies of such Government.
  2. Any international agency, not being the United Nations or any of its specialized agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification in the official Gazette, specify in this behalf.
  3. A foreign company defined under section 591 of the Companies Act, 1956 (1 of 1956), and also includes-
  4. A subsidiary of a foreign company.
  5. A multinational corporation under this Act.
  6. A corporation incorporated in a foreign country or in a foreign territory.
  7. A company as per the Companies Act, 1956 , if more than 50% of the nominal value of its share capital is held, either individually or in the aggregate, either by one or more of the following, namely:
  8. A Government of a foreign country or foreign territory.
  9. Any citizens of a foreign country or foreign territory.
  10. Any corporations incorporated in a foreign country or in foreign territory.
  11. Societies, trusts or other associations of individuals (whether they are incorporated or not), formed or registered in a foreign country or in foreign territory.

Any Non-Profit Organization, which has a ‘definite economic, cultural, educational, religious or social program’, is covered under FCRA. For practical assertions, this definition covers all NGOs and also covers the unregistered societies like Mahila Mandals.

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