Section 8
Funding Opportunities for Section 8 Companies: Grants, CSR & Donations
January 28, 20262 views
Quick Summary
Section 8 companies in India have access to multiple funding opportunities despite their non-profit status. The three primary funding sources are Corporate Social Responsibility funds, government grants and schemes, and public donations through crowdfunding platforms. To access this CSR funding, companies must register through Form CSR-1 with the Ministry of Corporate Affairs, obtain 12A and 80G tax registrations, and maintain a minimum three-year operational track record. With over Crores of CSR funds available annually and growing government support, Section 8 companies can secure sustainable funding through strategic planning, transparent operations, and strong documentation.
The Three Main Funding Sources One Must Know
1. Corporate Social Responsibility (CSR) Funds:
Big companies in India are legally required to spend 2% of their profits on social causes
This generates a substantial pool of money (over Rs. 33,000 crore annually!)
Your Section 8 company can apply to receive some of this money for your projects
2. Government Grants:
Different government ministries (like Health, Education, and Rural Development) offer free money for social projects.
You don't have to pay this money back,k as it's not a loan
You need to apply with a proper project proposal showing what you'll do with the funds
3. Public Donations:
Regular people donating money to support your cause
Can be collected through online crowdfunding websites or direct bank transfers
Works best when you have a compelling story and show transparent use of funds
Understanding Section 8 Companies and Their Funding Needs
Section 8 companies are non-profit organisations registered under the Companies Act, 2013, established to promote charitable objectives like education, healthcare, social welfare, environmental protection, and poverty alleviation. While Section 8 companies cannot pursue profit-making as a primary goal, they still need consistent funding to run their operations and expand their social impact. So, here comes the crucial role of alternative funding sources specifically designed for non-profit organisations.
The Three Types of Primary Funding Opportunities for Section 8 Company
1. Corporate Social Responsibility Funding for Section 8 Companies
By 2025, more than 32,000 companies in India have collectively invested over Rs. 1.5 lakh crore in CSR projects. This represents a significant opportunity for Section 8 companies working in eligible sectors.
Eligibility Criteria for Receiving CSR Funds:
To qualify for CSR funding, your Section 8 company must meet these requirements:
Legal Registration: Must be registered as a Section 8 Company under the Companies Act, 2013.
CSR-1 Registration : Mandatory registration with the Ministry of Corporate Affairs through Form CSR-1, implemented from April 2021 . Over 60,000 NGOs have registered
Track Record: Companies prefer Section 8 organisations with at least three years of operational experience in implementing similar social projects.
Tax Registrations: Must have valid 12A and 80G registrations under the Income Tax Act, 1961
How to Apply for CSR Funding:
Step 1: Register for CSR-1
Log in to the MCA portal and file Form CSR-1
Step 2: Identify Potential Corporate Partners
Research companies whose CSR focus areas align with your organisation's objectives
Step 3: Develop a Strong Project Proposal
Your proposal should include clear project objectives aligned with Schedule VII of the Companies Act.
Step 4: Establish Contact and Follow Up
Reach out to CSR committees of target companies through formal channels.
Important Note: Organisations must now provide enhanced documentation and professional certification to ensure greater transparency in CSR fund utilisation.
2. Government Grants and Schemes for Section 8 Companies
The Government of India provides financial support to Section 8 companies through various ministries and departments. These grants help organisations scale their impact in areas aligned with national priorities.
Top Government Grant Schemes in 2025:
Pradhan Mantri Jan Vikas Karyakram (PMJVK): Focuses on improving the socio-economic conditions of minority communities through infrastructure development and skill training.
Rashtriya Vayoshri Yojana: Provides funding for organisations working on senior citizen welfare and assistive living devices.
Swachh Bharat Mission Grants: Supports sanitation, waste management, and cleanliness initiatives in urban and rural areas.
National Health Mission Grants: Funds community health programs, awareness campaigns, and preventive healthcare projects.
Skill India Programs: Provides grants for vocational training, skill development centres, and employability enhancement programs.
How to Apply for Government Grants
Register your Section 8 company with a unique Darpan ID at niti.gov.in/darpan.
Ensure you have 12A and 80G registrations, as most government funding programs require these tax exemptions.
Visit the official portal of the ministry whose focus area matches your organisation's objectives. Review eligibility criteria carefully.
Prepare a project proposal with a detailed project description and timelines
Fill the online application form, upload the required documents, and submit within the specified deadline.
Required Documents for Government Grants
Section 8 Company registration certificate
12A and 80G certificates
Memorandum and Articles of Association
Audited financial statements for 3 years
Income tax returns
Bank account details
PAN card
NGO Darpan registration
Board resolution authorising grant application
3. Public Donations and Crowdfunding Opportunities
Section 8 companies can accept donations directly from individuals. Having 80G registration is crucial because it allows donors to claim tax deductions of 50% on their contributions, making your organisation more attractive to potential donors. On the other hand, digital platforms have revolutionised fundraising for NGOs. Some of the popular crowdfunding websites available in India are as follows :
GiveIndia is one of India's largest online donation platforms, connecting donors with verified NGOs across various causes.
Ketto Popular crowdfunding platform for social, medical, and charitable campaigns with an extensive reach.
Milaap supports fundraising for healthcare, education, and community development projects.
Donatekart focuses on in-kind donations, where supporters contribute specific items rather than cash.
How to Apply for Crowdfunding
Step 1: Get Your Legal Documents Ready
Before you start any crowdfunding campaign, make sure you have all the essential documents.
Step 2: Choose the Right Crowdfunding Platform.
However, we recommend GiveIndia or Ketto for general social causes, or ImpactGuru if your focus is on healthcare.
Step 3: Get registered on Your Chosen Platform
Timeline:
Small campaigns: 2-3 days
Large NGO profiles: 5-10 days
Step 4: Create Your Crowdfunding Campaign
Once registered, you need to create a compelling campaign story. e.g, "Every day, 50 children in our community go to bed hungry. Your donation can change that."
or
Video (1-2 minutes - HIGHLY RECOMMENDED): Videos get 300% more donations than text-only campaigns!
Step 5: Launch and Promote Your Campaign
Take the help of social media such as Facebook, Twitter, Instagram, or LinkedIn.
Step 6: Engage With Donors
Build personal relationships by sharing daily or weekly updates.
Step 7: Withdraw Funds
When Can You Withdraw?
Platform policies vary:
Ketto/ImpactGuru: Withdraw anytime after first donation
Milaap : After reaching the minimum threshold (usually Rs. 5,000)
GiveIndia: Monthly disbursement cycles Step 8: Maintain Compliance after receiving funds
Funding Source
Eligibility Requirements Key Application Needs Pros Cons Best For CSR Funds (e.g., via Companies Act 2013, 2% profit mandate) Section 8 company, 12A/80G registration; aligns with corporate themes like education, health.
Detailed project proposal, budget breakdown, impact metrics; submit via corporate portals.
Larger sums (often ₹10L+), sustained partnerships, tax benefits for donors.
Competitive, corporate approval delays (3-6 months), reporting mandates.
Scalable projects matching Schedule VII areas (e.g., rural development) Government Grants (e.g., NITI Aayog, state schemes) 12A/80G/FCRA if foreign-linked; Darpan ID registration; project must align with schemes like NRLM Formal project proposal detailing objectives, timeline, fund utilisation, and monitoring plan Stable, non-repayable; up to ₹1Cr+ for approved schemes; capacity building support Lengthy approval (6-12 months), strict audits, thematic restrictions Policy-aligned initiatives (e.g., women empowerment, skill training) Public Donations/Crowdfunding (e.g., via Milaap, Ketto) 80G for tax exemptions; basic NGO registration; transparent online presence Compelling story, visuals, milestones; no formal proposal, but regular updates are needed Quick access (days/weeks), broad reach, recurring donors, low entry barrier Smaller amounts (avg ₹1-5L/campaign), platform fees (5-10%), donor fatigue Urgent, community-driven causes (e.g., disaster relief, awareness)
Additional Funding Sources for Section 8 Companies
Bank Loans and Microfinance:
While Section 8 companies cannot access traditional equity funding, they can approach banks for loans against fixed deposits or property. Some microfinance institutions also offer small loans to non-profits for specific projects.
Membership Fees and Service Charges:
Section 8 companies can charge reasonable fees for services provided, such as training programs, consultancy services, or educational courses. These fees should be nominal and not profit-oriented.
Investment Income:
Organisations can invest surplus funds in fixed deposits, mutual funds, or government securities to generate regular income. However, all income must be used for charitable objectives.
Common Challenges in Fundraising and How to Overcome Them
Challenge 1: Limited Track Record
Solution: New organisations can partner with experienced NGOs to implement projects jointly. Focus on building credibility through small, successful projects before seeking large grants.
Challenge 2: Complex Documentation
Solution: Engage professional help from Chartered Accountants, Company Secretaries, or NGO consultants who specialise in compliance and fundraising.
Challenge 3: Competition for Funds
Solution: Differentiate your organisation through specialised expertise, innovative approaches, or focus on underserved geographies or populations.
Challenge 4: Regulatory Compliance Burden
Solution: Invest in compliance early. Hire or train staff specifically for compliance management. Use technology to streamline reporting processes.
Conclusion
Securing funding for Section 8 companies requires a strategic, multi-pronged approach. Don't rely on a single funding source. Instead, build a diversified funding portfolio combining CSR contributions, government grants, public donations, and other sources. For professional guidance and strategic decisions, consider partnering with a legal compliance consultancy such as NGOExperts and create lasting social impact for your Section 8 company.
FAQs
Q1: Can a newly registered Section 8 company apply for CSR funding?
Yes, but most companies prefer organisations with a minimum three-year track record. New Section 8 companies can partner with experienced organisations or start with smaller projects to build credibility.
Q2: Can Section 8 companies accept foreign funding without FCRA registration?
No, accepting foreign contributions without FCRA registration or prior permission is illegal and can result in penalties up to Rs. 1,00,000 or 30% of the contribution received, whichever is higher, plus potential criminal liability.
Q3: What percentage of funds can be used for administrative expenses in CSR projects?
There's no fixed percentage limit for CSR projects, but funders prefer organisations that keep administrative costs below 20-25%.
Q4: What happens if we don't spend CSR funds within the financial year?
Unspent CSR funds must be transferred to specified funds listed in Schedule VII (like PM CARES Fund or Swachh Bharat Kosh) or to an ongoing project within three years.