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By Vivek Verma

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December 24, 2024

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Development, fundraising, Planning

How to Set Up Your NGO in India: A Step-by-Step Guide

What is an NGO?

An NGO, or Non-Governmental Organization, is a non-profit entity that operates independently of government influence. NGOs aim to address social, environmental, cultural, or educational issues. Their primary purpose is not to generate profits but to serve the public good.

Types of NGOs in India

NGOs in India can be categorized based on their structure and purpose:

Trust: Governed by the Indian Trusts Act, 1882, these are formed by a group of trustees to support charitable activities.

Society: Governed by the Societies Registration Act, 1860, societies focus on the promotion of art, education, culture, and science.

Section 8 Company: Governed by the Companies Act, 2013, these are non-profit organizations formed for charitable purposes.

Legal Formalities to Cover While Setting Up an NGO

Setting up an NGO in India requires adherence to several legal formalities:

1- Define the Objectives:

Clearly outline the mission, vision, and objectives of your NGO.

2- Choose the Type of NGO:

Decide whether to register as a Trust, Society, or Section 8 Company based on your goals and activities.

3-Register Your NGO:

For a Trust:

Draft a Trust Deed specifying objectives and trustee details.

Register with the local Sub-Registrar office.

For a Society:

Prepare a Memorandum of Association (MOA) and Rules & Regulations.

Register with the Registrar of Societies in your state.

For a Section 8 Company:

Apply for a license with the Ministry of Corporate Affairs (MCA).

Submit a Memorandum of Association and Articles of Association.

4- Obtain Necessary Approvals and Registrations:

PAN Card: Apply for a PAN in the name of the NGO.

12A Certificate: For tax exemption on income.

80G Certificate: To allow donors to claim tax deductions.

FCRA Registration: If you plan to receive foreign contributions.

5- Set Up Bank Accounts:

Open a bank account in the NGO's name to manage funds transparently.

6- Comply with Ongoing Legal Requirements:

File annual reports, audits, and tax returns as per applicable regulations.

How to Attract Volunteers for Your NGO

1- Leverage Social Media:

Use platforms like Facebook, Instagram, and LinkedIn to share your NGOs vision and activities.

2- Conduct Awareness Campaigns:

Host events, webinars, or workshops to engage the community.

3- Partner with Institutions:

Collaborate with schools, colleges, and corporations for volunteer programs.

4- Offer Training and Incentives:

Provide skill-building opportunities and certificates to volunteers.

5- Share Impact Stories:

Highlight the difference your NGO has made through storytelling and testimonials.

Income for NGO Owners from Fundraising

An NGO owner cannot directly profit from fundraising. However, they can draw a reasonable salary for their role in managing the NGO, subject to the organization's bylaws and regulatory compliance. It is crucial to:

Maintain transparency in fund allocation.

Ensure the salary aligns with industry standards and is approved by the board of trustees.

Pros of Setting Up an NGO in India

Social Impact: Contribute to societal development and address pressing issues.

Tax Benefits: Enjoy exemptions under 12A and 80G for the organization.

Global Recognition: Partner with international organizations for funding and support.

Networking Opportunities: Connect with like-minded individuals and institutions.

Cons of Setting Up an NGO in India

Bureaucratic Hurdles: Navigating legal formalities can be time-consuming.

Fundraising Challenges: Sustaining financial support can be difficult.

Operational Limitations: Dependence on volunteers may affect consistency.

Accountability: Managing audits and compliance can be burdensome.

Conclusion

Setting up an NGO in India is a fulfilling journey that requires careful planning, compliance with legal formalities, and a clear vision. While there are challenges, the opportunity to create a positive societal impact makes it worthwhile. With the right strategies, you can build a successful NGO that not only changes lives but also inspires others to contribute to the greater good.

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