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How to Start a NGO
How to Start NGO
What is an NGO
A Non-Governmental Organization is organization which work for the welfare of people. There are different laws under which such Organizations can be registered.
Almost every charitable work can be done under NGO, any work for the welfare of people can be classified as work or aim of a NGO.
There are very big NGO like Oxfam and Amnesty International, who comes under NGO category, so is Agha Khan Foundation. These are global organizations with affiliates across all over the world. They work with Government and Local Affiliates to reduce the sufferings of people.
Red Crescent and Red Cross Are Global NGO working for Healthcare.
Every act of Goodness can be defined as NGO.
Different Types of NGO
- Charitable Trust
- Cooperative Society
- Company Registered as Not for profit company.
- Waqf – When created under waqf act
The NGO can be registered according to purpose of the NGO, local laws and easy of doing and registering business.
School, Colleges, Education Society usually registered as Society, under societies act and then Tax Exemptions are requested.
Charitable Trust is used in most of cases. Trust is used for doing charities, helping people and everything and anything, including advocacy. Depending upon specific needs and activities structure should be decided.
Cooperative Society – it is rarely used but one of very important structure when we are talking about national level activity or activity or involvement of masses.
Company Registered as Not for Profit Company – Not for profit company can be registered for purpose of doing welfare work. Profits generated through this company can only be used for welfare work, charitable work.
Waqf Property – India has world’s biggest wqaf Property. These are not developed or mismanaged. Under the Waqf act, government appoints, Waqf Board and Chairman. This is one of key reason why Waqf is high in corruption.
Presently Billions of Dollar Worth Properties and Assets are present in India which can be developed for the benefits of society.
Crypto Currency Bitcoin Not Halal
Importance of Structure of NGO
Tax Exemptions for NGO
Most important aspects of NGO are Donation is Tax Exemption. To get this tax exemption the NGO must be registered with Tax Department under exemption clause.
Section 80G of the Indian Income Tax Act provides provisions, as per 80G, you can deduct your donations to Central and State Relief Funds, NGOs and other charitable institutions from your total income to arrive at your taxable income.
The NGO must have article 17A income tax exemption certificate from Income Tax Department. Depending upon category and approval donations will be exempted from Income Tax. Proper documentation is very important to request exemptions, the receipt issued must be properly documented. The receipt must include Certificate Details and Registration Details of the NGO. Tax exemptions is most important incentive for donating the money to NGO’s.
FCRA – Foreign Contribution Regulation Act. This is essential if NGO is looking for the funding from foreign sources. It is not easy to obtain. Global NGO’s, Trusts and Lobbies provide funding for specific projects. The NGO’s can only receive these financing if they have FCRA Approval.
Why do people start an NGO
Purpose of NGO is very important. When Hunger and Poverty is increasing, distress and depression is high, those who care and think about others, they start NGO for the purpose of serving society.
NGO plays vital role in society, between Government, Corporates and Individuals. They are basically voice of voiceless, NGO are power of powerless. They serve society.
The Purpose can be any good work, service to the society.
Who give money to NGO
Even though there is misconception about individuals give money to the NGO, but reality is Single biggest donor is Government. Government engage lot of NGO’s in its social and development work and they are single biggest donors.
- Government Department
- Charitable Trust
- CSR Projects
Government Department – Different Government department give money to NGO’s on Project to Project Basis.
Department of Science and Technology
Department of Child and Women
Social Welfare Department
SC and ST Department
Water Resources Management
Every Government department has funds and projects for NGO, getting there, getting approval and getting funding is important.
Corporates and CSR Projects –
Big Companies Donates Huge amounts towards welfare of the society. These projects are area specific, funding is always Project specific. Under Corporate Social Responsibility Initiative, (CSR) companies gives percentage of their profits for development of society.
To receive CSR Funds, NGO must have approval under CSR NGO category. This funds are single biggest funds presently.
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Importance of Focus and Project Report
Importance of Focus, Objective for NGO
NGO is all about changing life, impacting life. The focus is very important for NGO. NGO must work with specific objective like, Child Welfare, Child Labor, Women, Employment, Water Shade, unless there is specific objective and goal, it is very difficult to audit the impact. Not only the Objective must be very specific but area or geography must be defined so that impact audit can be carried out.
When Donor see the impact NGO is making to lives, the funding starts pouring in. Unless impact is measurable it is impossible to get higher funding.
Importance of Project Report for Getting Funding
NGO must develop elaborate Project Report for every project. These project reports must have impact assessment. Having full project report with Objective, Financials, Expenditure details along with detailed manpower required. Every expense must be defined and explained.
Project report must also have how project will be implemented. Who are the target groups, what are their problems and how this project can ease the suffering of such people and ease their difficulties.
The project report is very important document for the success of project. It defines Resources Required, how these resources be utilized and what is the impact these resources will bring.
The Projects Can be
- Technology Development or low cost technology.
- Women Empowerment
- Watershed Management
- Farmers Training
- Training of Social Working
- Child Labor
- SHG and Micro Finance
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