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Foreign Funding for NGO in India

Foreign Funding for NGO in India

The role of an NGO is significant while talking about the economical and physical progression of the weaker sections of the society. NGO’s are partially or entirely dependent on donations from both foreign and domestic sources. The struggle of an NGO to stay afloat in times of scare fund is not unknown.

In such times, receiving foreign equity inflows in the NGO sector can directly result in social and economical development of the country. Individuals, campaigners and activist groups belonging to non-profit sector obtain investments from charity, foreign funding, government-funded campaigns, donations and now an important part of corporate, the CSR (Corporate Social Responsibility).

Foreign direct investment in the non-government sector is highly regulated. The Foreign Contribution Regulation Act (FCRA) is the regulatory body that monitors foreign funding for NGO’s in India. Nearly, 30,000 Indian NGO’s are registered with the FCRA in order to get foreign funding.

While FDI policies have been regularly eased to encourage more foreign funding in India, FDI in the non- government sector working for the marginalized and vulnerable has been known to be under strict regulation by the government.  In 2017, around 6000 NGO’s feared cancellation of their FCRA license. Widely known NGO’s like the Amnesty International and People’s Watch have all come under the scrutiny of the FCRA norms.


According to the Foreign Contribution Regulation Act, all NGO’s need to meet certain criteria’s in order to be eligible to receive foreign funding.

  1. It is imperative for the NGO to be registered under the Companies Act (1956-2013), Societies Registration Act (1860), etc.
  2. The NGO must have been in active operation for three years.
  3. The NGO should not have an existing parent company that is already registered under the FCRA.
  4.  The NGO must not have a foreigner on the board.

Apart from these, the NGO is also required to submit proof of activities undertaken in the period of its active years in its chosen field. Excluding the administrative expenditure, the organization also must have spent at least rs. 10,00,000 over the last three years.

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