Non-Governmental Organizations (NGOs) play a vital role in driving social change and community development across India. To scale their impact, many NGOs seek foreign donations and grants. However, receiving foreign funding in India is regulated by strict legal frameworks to ensure transparency and national interest. If your NGO wants to accept donations from abroad, it must comply with the Foreign Contribution Regulation Act (FCRA), 2010.
This guide will help you understand the process of FCRA registration for foreign funding, eligibility criteria, necessary documents, and legal compliances required to receive international support legally and effectively.
What is Foreign Funding?
Foreign funding refers to donations, grants, or contributions received from foreign individuals, institutions, or governments. These funds can be used for charitable, educational, religious, or developmental purposes in India.
While foreign aid can significantly boost an NGO’s operations, it also invites government scrutiny to ensure funds are used for legitimate causes.
Who Needs FCRA Registration?
Any NGO-be it a Trust, Society, or Section 8 Company-that wishes to legally accept foreign contributions must obtain FCRA registration from the Ministry of Home Affairs (MHA), Government of India.
Without FCRA approval, it is illegal for any NGO to receive foreign donations.
Types of FCRA Registration
There are two ways an NGO can be approved to receive foreign funding:
1. FCRA Registration
- Suitable for NGOs with a track record (minimum 3 years of functioning).
- The NGO should have spent at least ₹15 lakhs over the last 3 years on its activities.
- Registration is valid for 5 years, after which it needs renewal.
2. Prior Permission
- Ideal for new NGOs that don’t meet the eligibility for full registration.
- Permission is granted for receiving funds from a specific donor for a specific purpose.
- Cannot be used for general donations.
Eligibility Criteria for FCRA Registration
Before applying for FCRA, the NGO must fulfill the following conditions:
- Must be registered under Indian Trusts Act, Societies Registration Act, or Companies Act (Section 8).
- Should be functioning for at least 3 years.
- Must have a record of social, cultural, economic, educational, or religious activities.
- Should not be involved in political activities.
- Must have spent a minimum of ₹15 lakhs in the last 3 years on its core objectives.
Documents Required for FCRA Registration
Here is a list of documents typically needed for online application:
- Registration Certificate of the NGO
- MOA and Rules & Regulations / Trust Deed
- PAN Card of the NGO
- DARPAN ID from NITI Aayog (mandatory)
- Details of key functionaries (Name, Aadhaar, PAN, etc.)
- Activity reports of the past 3 years
- Audited financial statements for the last 3 years
- 80G and 12A Registration
- Commitment letter from foreign donor (for prior permission cases)
- Bank account in SBI, New Delhi Branch for receiving foreign funds (as per new FCRA rules)
Step-by-Step Process for FCRA Registration
Follow these steps to apply for FCRA registration:
Step 1: Register NGO with NITI Aayog’s DARPAN Portal
- Obtain DARPAN ID, a prerequisite for FCRA registration.
Step 2: Open FCRA Bank Account
- Open a dedicated FCRA bank account in SBI, New Delhi Main Branch to receive foreign funds.
Step 3: Prepare Required Documents
- Collect and scan all documents mentioned above.
Step 4: Apply Online on FCRA Portal
- Visit https://fcraonline.nic.in
- Fill out Form FC-3A (for full registration) or FC-3B (for prior permission)
- Upload all documents and pay the application fee.
Step 5: Application Review & Approval
- MHA will review the application.
- May seek clarification or conduct a field inquiry via local authorities.
- Upon approval, registration certificate is issued.
Key Compliance After FCRA Registration
Once registered, the NGO must comply with the following regulations:
- File Annual Return (Form FC-4): Must be submitted every year within 9 months from financial year-end.
- Maintain Separate Accounts: Keep foreign funding accounts distinct from local funds.
- Renew Registration: Apply for renewal at least 6 months before expiry.
- File Quarterly Intimations: Details of foreign contributions received and spent must be updated every quarter on the FCRA website.
Non-compliance may lead to penalties, suspension, or cancellation of registration.
Recent Amendments in FCRA (Key Highlights)
- NGOs can receive foreign funds only in SBI, New Delhi Main Branch.
- Limit on administrative expenses: Not more than 20% of total foreign contributions.
- Mandatory Aadhaar for key office bearers.
- Sub-granting of foreign funds to other NGOs is not allowed.
These amendments were introduced to ensure greater transparency and accountability in the utilization of foreign funds.
Benefits of FCRA Registration
- Access to Global Resources: Helps NGOs tap into international grants, aid, and CSR funds.
- Enhanced Credibility: Adds legitimacy and transparency to the organization.
- Long-Term Growth: Enables sustainable funding and scaling of operations.
- Eligibility for UN, WHO & global NGO collaborations.
- Builds Donor Confidence: Easier to gain trust from institutional donors and foundations.
Common Mistakes to Avoid
- Applying without meeting 3-year eligibility or spending threshold.
- Not having 80G and 12A Registration
- Failing to open FCRA-designated SBI account
- Missing deadlines for returns and filings
- Using foreign funds for prohibited or political activities
Avoid these mistakes to ensure a smooth approval process and continued compliance.
Conclusion
Registering your NGO for foreign funding under FCRA is a legal necessity if you wish to accept donations from abroad. While the process involves detailed documentation and strict compliance, the benefits in terms of credibility, growth, and global support are immense.
Whether you’re a new NGO seeking prior permission or an established one ready for full FCRA registration, understanding the procedure is the first step towards unlocking foreign contributions legally and transparently.
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