How NGOs can obtain CSR funds
Corporate social responsibility (CSR) is a self-regulating business model that makes a company socially accountable its stakeholders and the public. By practicing corporate social responsibility, corporates are discharging their duties towards all aspects of society, including economic, social, and environmental. This concept is accepted and followed all around the globe.
Many Indian companies like Tata group, Birla group, among many others have also been contributing to the society through Corporate Social Responsibility (CSR) since their beginning. So, CSR is not an new concept for Indian companies. But the Companies Act 2013 has made CSR mandatory for companies as laid in Clause 135 of Companies Act 2013 which states that CSR provisions in the act apply for companies with net profit of Rs. 5 crores or an annual turnover of 1000 crores INR or more for a year. The act mandates such companies to ensure spending of at least 2% of the average net profit earned in three consecutive years on CSR activities.
This mandate has thus opened new doors for NGOs which has provided them with a huge opportunity to be tapped. But very few NGOs have been able to take advantage of this, and thus many still do not have access to CSR funds, because of a number of reasons like lack of understanding, inability to fulfill criteria, no network, etc. So, here is a guide for NGOs on how can such NGOs bridge this gap and get access to CSR funds:
Statutory requirements for NGOs:
Corporate donors donate only to those NGOs which are legally compliant and sound. For CSR funding, NGOs must have certificates like NGO Registration certificate, 12A and 80G registration from Income Tax Department, Niti Aayog Registration. It is in best interest of the NGO to get these registrations as soon as possible. For availing donations from Foreign companies, FCRA (Foreign Contribution Regulation Act) registration is essential. Its important for NGOs to have all the documentation in place, and to be compliant with every department. Further, NGOs must also renew their registrations as and when required.
Target and understand the corporate donors in your area:
Target the existing companies in your area. As per CSR policies issued by MCA, companies are required to provide CSR funds to trusts which are working in their area of operation. Thus, NGOs must understand their profile, type of CSR activities undertaken by the company, preferences and policies. Try to fix a meeting with concerned person or CSR committee.
NGOs must explore the various possibilities through different mediums. Many agencies are time and again organizing programs devoted for CSR. Many online and offline campaigns are going on year-round. Active participation, networking with prospective donors, and building relationships in such events may result in fruitful associations in long run.
Every company asks for number of documents to check the genuineness and credibility of NGOs such as legal documents, registrations, project reports, impact data, and third-party evaluations to ensure that NGO is credible, and is already serving society through their work in its field. Make sure to keep the documentation is readily available
Address your plan of action :
Companies tend to co-relate your project, its impact on society with the objective of CSR funds. Thus, your plan of action and reports should be able to match requirements and objective of company’s CSR initiative.
NGOs should know the service they are rendering to society, resources required, activities to be undertaken, impact on society, section of society to be benefitted. NGOs must let the donor know their primary objective, cost of project and timeline of such project.