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How to get CSR Funding for your NGO ?- Internal Control System

Why a company having huge CSR funds and want to implement genuine projects, should give funds to your organization ?  This is the question you should ask to yourself and do not indulge into the malpractices as mentioned in this part 1 of this CSR series.

How to get CSR funding for your NGO?-PART 1

Most of the organizations are good at what they are doing in terms of implementing projects and grass root work, but they are not good in maintaining documentations and showing their good work to the world. Read this Part 2 blog, where I mentioned how you should showcase your good work.

How to get CSR Funding for your NGO ?- Program Quality – PART 2

Before we go ahead with Part 3 of this series regarding maintenance of Financial and Internal Control System, look at this latest news regarding spending Rs. 2,80,00,00,00,000 in last three years under CSR by the companies.

Accounting and Financial Control System

When you are approaching companies for CSR funding, it is almost prerequisite that NGO’s Accounting and Financial Control system is matched with the industry standards. You have to remember this:-

  • Regular Accounting (zero backlog)
  • Accurate Accounting
  • High Quality of Supporting (Single rupee spent hast to be  supported by Bills and Vouchers)
  • Strong Internal Control System
  • Watertight Cash Management System
  • Efficient Advance Management System

 

Statutory Compliance

No company will be ready to fund your organization if you have not followed all the Statutory Compliance. As a first step, list down the following compliance and check which  you followed in your organization. For remaining compliance, why you are not following it. Take expert opinion whether it is applicable to your NGO or not.

  • 12A – 80G
  • TDS
  • Income Tax Act
  • GST
  • FCRA
  • PF
  • ESIC
  • Professional Tax
  • Trust and Society Act

 

Governance

How your NGOs working is governing by the members ? Is your NGO is  one man army? Is it look like Proprietorship or Partnership Firm? Whose taking decision and how? These are some of the questions which may be asked at the time or per-scrutiny of project.

  • Authority Matrix
  • Decision Flow
  • Rotation in the Board Members
  • Election or Selection procedure of new board members
  • General Meeting and Executive Body Meetings
  • Maintenance of Minutes of such meetings
  • Intimation of Change in the Board Members

 

Policies

Following policy documents should be prepared and implemented in the NGO

  • Financial Policy
  • HR Policy
  • Accounting Manual
  • General Work Policy
  • Anti Corruption Policy
  • Gender Policy
  • Child Policy, if applicable

Hope the above information will be useful to you in getting CSR funds. We will discuss in next part of this series on how to approach companies for CSR funding.

Part -4 How to approach companies for CSR funds? – Coming Soon

Disclaimer : This blog is purely for the education purpose and author is NOT providing any services to get CSR funding.

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Change in objects of NGO – Whom to intimate?

Every NGO, whether registered as Trust or Society or Sec8 Company has very specific main objects. However, sometimes during the lifespan of trust, it need to change (add or modified) some of the objects already stated in the constitution of the NGO.  The question is to whom NGO should intimate regarding the change.

Registration Authority

Depending upon the entity, NGO should intimate to the authority under which it got registration originally. Suppose, NGO is registered as Trust under the Bombay Public Trust Act and Society Registration Act. Then, intimation should be sent to Charity Commissioner and Society Registrar. It is mandatory to intimate the authority.

FCRA Department

If NGO has FCRA registration, at the time of registration, nature of association is to be mentioned. There are five types of nature of association specified in the Act. They are Religious, Cultural, Economic, Educational, Social. It is advisable to check the registration certificate of FCRA where it is clearly mentioned. If NGO has change its objects and which is not mentioned in the registration certificate, NGO has to file Form FC6 regarding change of objects of the trust.

Income Tax Department

 

After the amendments in Income Tax Rules 2018, Income tax department has notified on 19.02.2018 ,If you are a registered charitable trust, society or a company registered u/s 8 of the Indian Companies Act 2013 and if you have changed or amended the objects of your organization, the Income tax Act 1961 now requires your organization to apply afresh for registration u/s 12A in the new online Form 10A. This must be done within “thirty days from the date of such adoption or modifications of the objects”.

Donor / Funding Agency

It is not mandatory, but advisable to even intimate about change in main objects of the trust to donors and Funding Agency. It is a good practice.

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List of Banks allowed by FCRA -UPDATED

NEW LIST UPDATED – 46 Banks

https://fcraonline.nic.in/fc_bank_list.aspx

Bank Integration – FCRA

FCRA department has issued a notification dated 22.12.2017, instructing organization to have FCRA Bank Account only with the list of banks mentioned in the attachment.

Purpose

The purpose is to link FCRA Bank Account with PFMS – Public Financial Management System.  However, system of some of the banks are such that account can not be linked with PFMS.

Action

Thus, if your organization having bank account with the bank other than mentioned in the list, you need to change the FC account with the given 32 Banks within a month.
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FCRA makes it compulsory to take DARPAN ID

As per FCRA latest notice, all the NGOs now need to acquire DARPAN Unique ID. This it the portal offered by NITI Aayog in association with National Informatics Center.

Also, it is mentioned in the notice, that all the all FCRA related services like Registration, Renewal, Filling of Return etc.. shall require DARPAN Unique ID.

Public Notice for DARPAN ID

[dg ids=”4516″]

How to Register for DARPAN ID

Step 1 – Login

http://www.ngodarpan.gov.in/

Click on “Register” button on right corner.

Step 2 – Enter Details

You have to give details of your organization – NAME, MOBILE and EMAIL. OTPs will be sent to given Mobile number and email.

Step 3 – Verify OTPs

Once you submit, OTPs will be send to your email and mobile. Also, here you need to provide PAN of your Organization and Name of mentioned in the PAN.

Step 4 – Create Password

Once your PAN is verified, Unique ID is generated and you need to create your own password for the login. Thereafter, it re-direct you to login page

How to give this Unique ID to FCRA

Once you get the Unique ID, you need to login to your FCRA account, where a pop up form appear, you need to provide Unique ID there. Refer our last blog.

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FCRA Update – Key Functionaries Detail

Recently FCRA department has update the website and now when you login to your account, a page is loaded where it is asking for details regarding key functionaries and Darpan ID. Look at the below screenshot :

Process :

Step 1 – visit https://fcraonline.nic.in/home/index.aspx

Step 2 – Click on “Intimation on Quarterly Receipt” tab.

Step 3 – Give details of your userid and password

Step 4 – A page given in the above image is loaded. Fill all the information regarding members.

  1. Email ID of Member
  2. Mobile of Member
  3. Aadhar of Member
  4. PAN of Member

Step 5 – Fill information regarding Darpan ID

5. Darpan ID

6. PAN of Organization given in Darpan Registration

For more information on what is Darpan ID and how to create it, click below link.

http://ngodarpan.gov.in/

 

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Update – FCRA department has issued show cause notice

Recently, FCRA has issued show cause notice to 5992 NGOs asking for reasons why their FCRA registration may not cancel.

Earlier in this May, FCRA has issued list of organizations, who have not filled FC returns online for previous year or years. And give them opportunities to update the same as early as possible. Also after that, 5992 organizations have not updated their FC returns and thus final show cause notice issued to them.

Download Notice from here.

Download List of 5992 NGOs from here.

It is also mentioned that, these organization have to give their reply in email to fcrarenewal-mha@gov.in within 15 days.

 

 

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FCRA : One and Final Chance to update NGO’s old Returns

Final opportunity for those NGO’s who missed to file FC returns from 2010-11 to 2014-15. FCRA department has allowed to file your FC return of old years without any penalty. It is clearly stated in the notification, that this is the one and final chance for NGOs to update their returns if fail to file.  Also, with the notification, list of 18523 NGOs, who have not filled FC return (or may be filled in paper format and not updated by FCRA department.) is attached with the details of all the years.

What you should do?

Go through this list and search your name with registration number and check the years where it is stated “No”. See below image.

How to file old returns?

Once you find out, which returns are pending or not updated to FCRA website, you need to file return online in form FC4.

Step – 1 Click on FC-4 Tab on left side of https://fcraonline.nic.in/home/index.aspx website
Step -2 Login with your ID and Password
Step -3 Click on the year in which return is pending. See below image in which for year 2013-14  is pending

Step -4 File FC-4 return and upload necessary documents and submit final return, if the documents are in PDF, software like soda pdf can also help with this.

Video

Check this video on how to file FC4 return.

 

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How to get CSR Funding for your NGO ?- Program Quality

How to get CSR funding for your NGO? – PART 1

We have seen in last blog here (How to get CSR Funding for NGO?) , what NGO should not do to get CSR funds. Let us see now what NGO should do to get CSR funding. How your should prepared your NGO for CSR funding. One of the important aspect is how effectively your NGO implement the given project i.e. Program Quality.

Program Quality

Obviously, as a Chartered Accountant, I can not suggest about how to implement program effectively, but yes, I can suggest on how to maintain documents in such a manner, so that it can easily draw an idea about NGO working.

Past and Current Programs

Programs, which are completed in last five years should have been documented properly. There has to be proper file for each program containing all the documents starting from agreement, budget, all financial utilization certificates, quarterly reports, photographs and note on impact of the program. I suggest to have a “Program Closure Card”, a brief summary of Program. Please see below example.

This is illustration how Program Closure Card look

This is illustration how Program Closure Card look

 

Future Program

Every company ask full project plan for which you need CSR fund. Thus, NGO should have keep ready such kind of different project plans – mainly divided in two parts, short term plans and long term plans. Many CSR companies even provide funding for ongoing project or contribute in Long Term Project Plan of NGO.

Coming Soon – How to get CSR funding for your NGO? – PART 3

 

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How to get CSR funding for your NGO?

There is no straight forward answer to this question – how to get CSR funding? However, one thing is very sure that there is huge funds under CSR, which all the eligible companies should invest in communities. You can check amount spent by companies under CSR in this official website of Ministry of Companies Affairs – Here

So, today, I am not discussing here how much funds available in CSR and which companies are liable  to spare this fund.

Let us discuss from the view point of NGOs. How one grass-root NGO can get CSR funding ? In my opinion, NGOs should make efforts to reach out to CSR company rather than wait to be found by them.

So, before going into details on how a grass-root NGOs have to be prepared themselves for CSR funding and how to approach companies, let us first see what an NGO should not do to get CSR funding.

Don’ts – CSR Funding

 

1. Stay Away from Middle Man

Now days, you can found so many from this species called “Middle Man” . Stay away from this type of person who gives you guarantee to get funding in consideration of some “commission” or “cuts” or “payback” whether this person is your CA, friend, some funding agency employee or company employee. Just stay away from such middle man.

2. Routing of Funds

Another wrong practice, where company gives you CSR funds on a condition (of course unofficially) to route some portion of funds to the specific interested person or companies in the form of Salary, Fees or some procurement expenditures or by any other legal transactions by whatever name called. Though, speaking in legal terms, it may be correct, but still that will affect the credibility of your organization.

Do’s – CSR Funding

Before, approaching for funds to companies for CSR, NGO should do a self-evaluation, particular in the area of progarm implementation and control system. I have divided CSR funding process in three steps –

  1. Improve Program Quality
  2. Establish various Systems
  3. Approach Companies for CSR

Check out this chart –

We will discuss all the above steps in detail in the next part.

How to get CSR funding for your NGO? – PART 2

 

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Draft Guidelines providing stringent regulatory mechanism for NGOs

The Centre filed in Supreme Court on Wednesday its draft guidelines providing stringent regulatory mechanism for NGOs. Earlier, in January 2017, famous lawyer for his PILs, Advocate Mr. Manohar Lal Sharma, filled a PIL to regulate the unorganized NGOs ecosystem in the country. SC had asked the Centre to prepare guidelines to regulate NGOs and Voluntary Organisations after finding that nearly 30 lakh of them were operating in India.

In its order, the Court noted that substantial funding is allowed for NGOs and voluntary organisations. Further, Rules 210-212 of the General Financial Rules, 2005 provide for a regulation mechanism for NGOs, though the respondents are not aware of the same. The court noted,

“There are 32 lakh NGOs out of which nearly 3 lakh are filing balance sheets. The respondents are not aware of the responsibility of audit in the General Financial Rules…There can be no doubt that the funds disbursed by CAPART [to NGOs] is public money and needs to be accounted.”

It, therefore, directed the Centre to complete the exercise of audit and submit a report by March 31 this year. It was directed,

“In case of non-compliance, it is essential to initiate civil and criminal action immediately after the completion of the exercise.”

Most importantly, the Court also directed the Centre to lay down guidelines/rules for accreditation of NGOs, the manner in which they shall maintain accounts and auditing of the same.

Centre proposes stringent guidelines for NGOs and VOs requiring all existing ones to register afresh online with Niti Ayog‘s NGO-Darpan. The guidelines submitted by additional solicitor general Tushar Mehta to a bench headed by CJI J S Khehar required them to register afresh if they wish to get govt grants.
It said NGOs will be provided unique ID and subjected to income tax act and foreign contribution regulations act. Centre’s draft guidelines say NGOs/VOs past track record and performance will be put under scrutiny before grant of accreditation. The NGOs and VOs getting govt funds are required to execute a bond to refund the amount with 10% interest if work not done.

However, detailed draft copies of guidelines not available so that can not comment on in dept detail.

SC asked amicus curiae Rakesh Dwivedi to submit his suggestions on the draft guidelines in two weeks.

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