CSIM Session 6

This has been a long pending post. Today I am planning to clear of few of my TBD (To Be Done) tasks as this bucket is now overflowing :-)

We had Varsha Avadhany from Fidelity to talk on NGO laws and regulations. Like every other session we began with trying to understand the basic words under discussion - in this case 'Laws and regulations'. Then we moved to understand why should there be laws n regulations in a non-profit sector. We came up with answers like they are needed to have a discipline, transparency, standard operating processes.

Slowly we moved to the intricacies of the formation of non-profits, the different forms under which they can be registered
1. Trust
[This is the oldest way, a minimum of 2 members are required to form a trust. Can be started within by members of the same family]
2. Society registration
[A minimum of 7 members, not more than 2 people can be blood relatives. The board member cannot be an employee of that society]
3. Non-profit company
[Companies sometimes use their profit to start a non-profit (NP) company which works on the same line of business but don't run for profit]
Example of this - Maya organics, mobility India
So, the selling price of the product this NP company sells should be equal to the cost price.

This was already so much of gyaan for us, hardly did we know that it was just the tip of the iceberg :-)

We later covered aspects of tax filing, the different exemtions like 80G where there is a 50% tax exemption, 35AC where there is a 100% tax exemption. The FCRA act and its regulations were an interesting topic.

FCRA stands for Foreign Contribution Regulation Act (1976). For a NPO to get FCRA approval, they need to be functional for atleast 3 years. There are 2 ways of getting permission -
1. Apply for FCRA which will take atleast a year for the approval
2. Apply to the Central Govt. for prior permission for a particular project
On approval, the NPO can get foreign contributions.


The Ministry of Home Affairs grants FCRA approval and they have many rounds of processing and cross verification which makes it time consuming. All FCRA contributions are monitored by intelligence agency across the world.

At last the point that was dirven again and again in to our head was

TO BE ETHICALLY RIGHT.