May 28, 2024

Bhavika Advani

The author is a first-year law student at DNLU Jabalpur

foreign contribution


A major benefit of a non-profit organization in assisting society is that they act faster than the government. NGOs, both large and small, work on a variety of social issues, ranging from poverty alleviation to fighting injustice, from providing clean water to improving healthcare. Every organisation has a specific function to fulfil. Because of their strong community connections and extensive knowledge of the situation, NGOs can understand and cater to the needs of the community and meet them in the most effective way possible. Through their connections with decision-making authorities, strong and well-resourced non-governmental organisations (NGOs) can help communities grow and prosper. The government has made it more difficult for non-governmental organisations (NGOs) to function properly by enacting new amendments to the Foreign Contribution Regulation Act (FCRA). This includes NGOS that receive foreign funding from other NGOs. We also discuss the impact of FCRA 2020 on non-profits.


117 NGO fcra licenses were recently denied by the Ministry of Home Affairs, but 5789 NGOs’ licenses were not affected. The total number of active NGOs registered in the fcra has decreased from 22797 to 16907. According to the recent FCRA act, non-governmental organizations (NGOs) that want to receive foreign funds must register with the ministry of home affairs, which will assign them a unique FCRA registration number that must be renewed every five years. The missionary of charity license for West Bengal was previously denied, but it has now been reinstated. Foreign funds can only be received by non-governmental organizations at the State Bank of India (SBI) branch in Delhi (NGOs). The government claims that enacting this law will improve transparency and accountability in the receipt and use of foreign contributions, as well as strengthen the compliance mechanism and promote genuine non-governmental organizations or associations that work for the betterment of society. Even if they are registered under the FCRA, NGOs are not allowed to transfer foreign funds to other NGOs.

FCRA 2010

The Foreign Contribution Regulation Act of 2010 (FCRA 2010) was enacted by the parliament to strengthen the law governing the acceptance and use of foreign contributions by individuals or associations for the benefit of society, as well as to ensure that no foreign contributions are used in activities that are not in the best interests of the country, such as matters relating to terrorist organisations or religious conversion. Anyone receiving funds must register with the FCRA and receive prior approval from the federal government. Any candidate for office, newspaper publisher, government employee, member of any legislature, political party associations, or political organisations are prohibited from accepting foreign contributions. Foreign contributions are not allowed to be made to associations and political organisations. Any organisation or individual may transfer money to another organisation or individual, according to the FCRA 2010. They can open an account with any bank to receive the foreign contribution. A 50 percent limit applies to administrative costs.

Major amendement

Modification of section 7 to prohibit the transfer of any foreign contribution to any association/person; Alteration of section 8 sub-section(1) to reduce the limit for defraying administrative expenses from “fifty percent” to “twenty percent.” Insertion of a new section 12a empowering the central government to require aadhaar number, etc., as an identification document; Amendment of section 17 to provide that every person who has been granted a certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as “fcra account” which shall be opened by him in such branch of the state bank of india at new delhi as the central government may, by notification specifying registrations under the FCRA have become more stringent.

Any organisation that wishes to register under FCRA must have been in existence for three years and spent a minimum of 15 lakh on core activities for the benefit of society during the previous three fiscal years. However, in exceptional cases or when a person is controlled by the Central Government or a State Government, the Central Government may waive the conditions. Office bearers of NGOs or organisations seeking FCRA registration must submit a specific commitment letter from the donor indicating the amount of the foreign contribution and the purpose for which it was given.


The main change in this act is the transfer of foreign contributions from one non-governmental organisation to another, even if both are FCRA-registered. This act affects all non-profit organisations that are not directly connected through foreign investment; previously, small non-profit organisations received funds from their parent organisation and worked. These non-profit organisations can no longer obtain funds or work. NGO’s assist society at all times and in all places; they act faster than the government and are aware of the true situation and act accordingly.They collaborate closely with the people on the ground and are able to quickly access the immediate area in the event of a major incident. Even if a small NGO wants to register under the FCRA, it will be difficult for them to do so because any organisation that wants to register under the FCRA must be in existence for three years and must have spent a minimum of 15 lakh on core activities for the benefit of society in the previous three fiscal years. The threat to the survival of NGOs/reduction in funding will have an impact on the employment of various workers and staff working in such organisations, as such NGOs will find it difficult to undertake new projects that were previously supported through such sub-grants. Various NGOs used to support and drive self-reliance movements in the weaker sections of society; however, a lack of funds for these NGOs may have an impact on the ‘Atmanirbhar’ movement. Even now, the suspension period has been extended from 180 to 360 days. The cap on administrative expenses will also make it difficult for NGOs to perform and achieve their goals. Increased administrative burdens, such as opening new bank accounts, mandating Adhaar, and conducting inquiries while renewing FCRA registration, will dissuade NGOs. Even the government now has the authority to prohibit foreign contribution receipts from using or receiving its funds, and every five years, NGOs must apply for the renewal of their FCRA certificates. At the time of renewal, the Intelligence Bureau team inquires, and if they believe something is wrong, the certificate is not renewed.


NGOs aid in the implementation of government programs at the grassroots level. They fill in the gaps where the government, for all intents and purposes, fails to do its job, which is significant. The government must, for all intents and purposes, adhere to the actual ancient Indian ethos of Vasudhaiva Kutumbakam as the framework for its global engagement and should not act with a vendetta against NGOs that essentially criticize its work, which is quite significant. Seamless sharing of ideas and resources across basically national boundaries is most essential to the functioning of a global community, and should not be discouraged unless there is an absolute reason to believe the funds are being used to aid illegal activities.

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