Fundraising for NGO and FCRA Rule
1. Anonymous donations – Fundraising for NGO and FCRA Rule
Internet fund-raising is becoming popular now days. Suppose, you suddenly receive a credit of Rs. 1.3 lacs in your bank account. The donor does not tell you his or her name.
What do you do?
Ask your bank to trace back the donation. If it came from an overseas account, transfer it to your FCRA account. Then report it in FC-3 as ‘Anonymous Donation’. Attach a copy of FIRC (Foreign Inward Remittance Certificate) from the bank.
2. NRI donations: Fundraising for NGO and FCRA Rule
NRI donations to an Indian NGO may be Indian funds or FCRA funds. If the NRI holds an Indian passport, then the donation will be Indian funds. If not, then these will be FCRA funds.
The type of bank account or currency does not matter.
3. Contribution from Foreign Guest: Fundraising for NGO and FCRA Rule
If your NGO is not registered under FCRA, do not accept any payments (for food etc.) from foreign volunteers who stay. You will be violating FCRA!
If you do have FCRA registration, credit these recoveries to the FCRA accounts.
Many people believe that gifts by foreigners are not a FCRA contribution. This is not quite correct. This exemption applies when the gift is given to an individual. Secondly, the gift must be for his/ her personal use, such as a shirt or a watch.
Therefore, if a foreigner gives your NGO a wall clock worth Rs 1800, you should record it in FC-6 and report it in FC-3.
A foreigner can come and work in your NGO without any salary. This is not considered as foreign contribution.
4. Endowment Income & Investments: Fundraising for NGO and FCRA Rule
When you receive interest or dividend on your endowment investments, report these in FC-3 as receipts. When you make a ‘profit’ by sale of investments (capital appreciation), show the entire sale realisation as ‘receipt’ in FC-3.
You are free to make investments out of Endowment Funds in the normal way. These can be reported as utilisation in FC-3. But you must show these on the assets side of FCRA Balance Sheet as ‘Endowment Investments’.
5. Sale of Publications or Goods: Fundraising for NGO and FCRA Rule
If the books have been published or handicrafts made with FCRA funds, then the sale recoveries (often termed as ‘contribution’) should be kept in FCRA accounts.
6. Consultancy income of NGO: Fundraising for NGO and FCRA Rule
NGOs cannot receive consultancy payments from foreign sources without FCRA registration / prior-permission. Such income is treated as FCRA income. It should be reported in form FC-3
7. Raising funds abroad: Fundraising for NGO and FCRA Rule
FCRA does not allow multiple accounts for receiving funds. Therefore, you cannot open an account abroad in your NGO’s name for raising funds.
You then have two options:
1. Set up an independent sister concern abroad. They will raise funds for you and transfer these to you.
2. Make an arrangement with a fund-raising group abroad. They will raise funds on your behalf and transfer these to you.
SUDESH KUMAR FOUNDATION
Talk to Ozg NGO Funding Consultant Online at anytime you prefer
NGO.email@example.com (Windows Live)
Download Application forms for FCRA registration and filing
fcra-registration.com – fc-2 – FCRA Application for seeking Prior Permission of the Central Government to accept foreign hospitality
fcra-registration.com – fc-3 – FCRA Yearly account of foreign contribution received and utilised
Ozg FCRA Consulting