How to Start an NGO in India? Easy 8 Steps Process

Staff Desk

17 June 2024

53,796 14 mins read

Read on to get stepwise instructions to Set up an NGO, and all the reasons why you shall hire a legal consultant, and accountant.

What Are NGOs?

start an NGO in India or non-governmental organisation is an entity that is often established outside of the government.They are usually non profit organisations, and many of them work in the social sciences or in humanitarianism; they can also be groups and clubs that offer services to both its members and other people. NGOs may also act as corporate lobbyists, like the World Economic Forum. NGOs are not the same as international and intergovernmental organisations (IOs), which deal with governments and sovereign states more directly.

Although the term ‘non-governmental organisation’ has been known for a long time, not-for-profit charities have always been around. Such organisations were largely localised and frequently founded by religious groups. “non-governmental organisation” appears in UN Charter Chapter 10, Article 71. As per the World Bank, NGOs are divided into two categories: operational and advocacy. However, many followers are inclined towards the combination of both. NGOs can focus on various issues, including disaster assistance, women’s rights, economic growth, and more. Here, we will be providing answers to your question on start an NGO in India.

Understanding NGOs

Non-governmental organizations (NGOs) are independent organizations not affiliated with any government. They are often formed to address social, economic, or environmental issues. start an NGO in India can be local, national, or international in scope.

Start an NGO in India: How Do NGOs Work?

NGOs work in a variety of ways to achieve their goals. Some common activities include:

Providing direct services to people in need, such as food, shelter, and medical care
Advocating for policy changes at the local, national, or international level
Conducting research and raising awareness of important issues
Building capacity and empowering communities to take action.

Forming an NGO

Forming a Non-Governmental Organization (NGO) is a multifaceted process that requires careful planning, legal compliance, and a clear vision for achieving the organization’s mission. The steps outlined below provide a comprehensive overview of the key considerations and actions involved in establishing an NGO:

Define the Mission and Objectives: Clearly articulate the purpose and objectives of the NGO. Determine the specific social, environmental, or humanitarian issue the organization aims to address. The mission statement should be concise, impactful, and reflective of the NGO’s core values
Conduct a Needs Assessment: Conduct a thorough needs assessment to identify the target population or community that will benefit from the NGO’s activities. Understanding the challenges and opportunities faced by the intended beneficiaries will help shape the organization’s initiatives and interventions
Develop a Strategic Plan: Create a comprehensive strategic plan that outlines the NGO’s long-term goals, target outcomes, and strategies for achieving them. This plan should encompass details on how the NGO intends to secure funding, collaborate with stakeholders, and implement programs
Choose a Legal Structure: Decide on the legal structure that best aligns with the NGO’s mission and operational requirements. Common legal structures for NGOs include charitable trusts, societies, non-profit companies, or associations. The choice of structure will influence regulatory compliance and tax status
Register the NGO: Register the NGO with the appropriate government authorities or regulatory bodies, following the legal procedures of the chosen legal structure. This may involve submitting required documents, such as the NGO’s constitution, governing board details, and registration fees
Form a Governing Board: Assemble a governing board comprising individuals who are committed to the NGO’s mission and possess diverse skills and expertise. The board will play a crucial role in guiding the organisation, making strategic decisions, and ensuring accountability
Draft Governing Documents: Prepare essential governing documents, such as the constitution, bylaws, and policies. These documents should outline the internal rules, procedures, and governance structure of the NGO
Obtain Necessary Approvals: Seek any necessary approvals or clearances from relevant government departments or regulatory bodies. This might include obtaining a tax-exempt status, if eligible, to enable the NGO to receive tax-deductible donations
Establish Financial Systems: Set up robust financial management systems to ensure transparency, accountability, and compliance with financial regulations. Implement budgeting, accounting, and reporting mechanisms to track the NGO’s financial activities
Build Networks and Partnerships: Establish partnerships with other organizations, governments, and community leaders to leverage resources, share knowledge, and enhance the impact of the NGO’s initiatives
Develop Fundraising Strategies: Create a diverse and sustainable fundraising strategy to secure financial support for the NGO’s programs and operations. Explore various funding sources, including individual donors, grants, corporate sponsorships, and fundraising events
Recruit and Train Staff: Hire qualified staff members who align with the NGO’s mission and possess the necessary skills to carry out its activities effectively. Provide training and capacity-building opportunities to enhance their capabilities
Launch and Monitor Programs: Start NGO programs and initiatives according to the strategic plan. Continuously monitor and evaluate the impact of these programs to make data-driven improvements and demonstrate accountability to stakeholders.

Easily to Start an NGO in India

Determine your NGO’s mission and cause
Form the Board of Directors/Members
Choose a name for your NGO
Memorandum Articles of Incorporation/ Articles of Association
Register your NGO
Collect Funds
Establish a wide network

Types of NGOs

Non-Governmental Organisations (NGO) come in various types, each with distinct objectives, focus areas, and approaches to addressing social, environmental, and humanitarian issues. The types of NGOs can be broadly categorised as follows:

Advocacy and Human Rights NGOs: These organisations work to promote and protect human rights, civil liberties, and social justice. They advocate for policy changes, raise awareness of human rights violations, and support marginalised or oppressed groups
Charitable NGOs: Charitable NGOs primarily focus on providing direct assistance and relief to vulnerable populations, such as the poor, homeless, or victims of natural disasters. They often offer essential services like food, shelter, healthcare, and education
Environmental NGOs: Environmental NGOs are dedicated to conservation, sustainability, and protecting the natural environment. They work on issues like climate change, wildlife conservation, habitat preservation, and promoting eco-friendly practices
Development NGOs: Development NGOs aim to foster long-term sustainable development in communities, particularly in developing countries. Their projects may focus on poverty alleviation, education, healthcare, infrastructure, and livelihood improvement
Health NGOs: Health-focused NGOs concentrate on improving public health, combating diseases, and providing healthcare services. They may address specific health issues like HIV/AIDS, malaria, and maternal health, or promote overall healthcare access
Education NGOs: Education NGOs work to enhance access to quality education, especially in underserved areas. They may support schools, offer scholarships, and vocational training, and promote literacy programs
Emergency Relief and Humanitarian NGOs: These organisations respond rapidly to humanitarian crises, providing immediate relief to communities affected by natural disasters, conflicts, or other emergencies. They offer aid, food, shelter, and medical assistance during critical situations
Women’s Rights and Gender Equality NGOs: These NGOs advocate for gender equality, women’s empowerment, and the eradication of discrimination and violence against women. They work to ensure equal rights and opportunities for women and girls
Children’s NGOs: Children-focused NGOs work to protect and uplift the lives of children, ensuring their rights, education, healthcare, and protection from exploitation and abuse
Research and Policy NGOs: These organisations conduct research and analysis on various social, economic, and environmental issues, contributing to evidence-based policymaking and advocating for positive change
Cultural NGOs: Cultural NGOs promote cultural preservation, heritage, and arts. They may work to protect cultural diversity, and traditional knowledge, and foster appreciation for cultural expressions
Peacebuilding and Conflict Resolution NGOs: Peace-focused NGOs work to prevent and resolve conflicts, promote dialogue, and reconciliation, and foster peaceful coexistence
Social Enterprise NGOs: Social enterprise NGOs operate businesses with a social mission, using profits to fund their social and environmental initiatives
Community-Based NGOs: These organisations operate at the grassroots level, engaging with local communities to address specific needs and challenges
International NGOs (INGOs): INGOs operate globally, working across borders to address international issues and provide assistance in multiple countries.

Start an NGO in India – NGO Setup

To be successful with your approach to creating and maintaining a start an NGO in India, you must masterfully combine the critical ingredients that will succeed or break your efforts anything from promotion and fundraising to volunteers vs paid employees and everything in between. On the other hand, programs and initiatives can alter the flavour of the ultimate output. You’re condemned to fail if you don’t grasp your target audience’s demands and design your programs to meet those needs.

Here, Are the 8 Steps to Start an NGO in India

Establish your Goals: It is the most basic step in forming an NGO since it empowers you to define the organisation’s goal. At this point, it is suggested that you put pen to paper and begin writing a statement that outlines the NGO’s mission, values, and target audience
Setting Up a Board of Directors: Despite the fact that an NGO is a philanthropic organisation, it must be conducted as a company with well-defined goals and financial boundaries to be successful. To do so, you’ll need to form a board of directors and hire seasoned individuals with experience in administration, legal issues, finance, human resource management, and technology – even if only for a limited time
Legal Representatives: At least at first, many activities should be handled by the best lawyer who has expertise in registering the NGO, submitting legal documents to get the certificate for the NGO, filing audits, dealing with tax concerns, and requesting a license
Selecting a Name: Consider exploring other similar organisations to see what names they’ve selected to best express the work they undertake before settling on a name for your NGO. Even if your preferred name is already taken, the experience will spark thoughts, and you’ll quickly discover the right name lurking in the shadows
Incorporation Drafting: Drafting the articles of incorporation, which provide a legal description and view of the organisation and grant power to the board, is another responsibility for your top legal counsel. The articles specify the name of the NGO, its intention and objective, a statement decreeing its non-profit status, the location of the NGO, the number of board members and their names, and the personal liabilities of individuals. If the NGO has capital stock (rarely any, but if it has, please do mention it), the operating period of the NGO shall be described and written, leaving it with zero ambiguity
Registration of the NGO: NGOs shall adhere to a set of legal requirements and restrictions interpreted by the legislation. An NGO registration will be considered a legal entity once the registration process has been completed. Do a proper investigation about the concerned authorities who register NGOs: https://ngodarpan.gov.in/. You must submit the relevant documents for the application and provide information such as the NGO’s title, objectives, and the total number of board members. Take your time with this step to make sure you’ve covered everything legally. If not, do it so there will not be any loopholes left
Accounting System and Fundraising: You need to establish a transparent accounting system that keeps track of where funding comes from and how it is used from the beginning of your NGO’s existence. Transparent in this context means that your accounting records are open to the public eye, leaving them no doubt regarding your intention.
Later focus on your budget and fundraising. Money is a complex concept, and implementing a fundraising plan once all the board members have determined your NGO programs.
You’ll also have to work out where to seek money. Loans, grants, individual donations, and membership dues are just a few of the choices available to NGOs. It is also feasible to obtain government funding. Make use of your network as soon as you begin the fundraising process. Always review your messaging to improve your ability to appeal to donors.
Working on Projects: The final stage is to start an NGO in India to begin working on a project. You should begin by setting small, attainable goals. Assign each individual a clear responsibility, set a project budget, and implement a monitoring and assessment system. This will allow you to determine what’s effective and what isn’t during the project, and then you’ll be able to examine the outcome.

Start an NGO in India: Tax-Exempt Status

In many countries, NGOs are eligible for tax-exempt status. This means that they do not have to pay taxes on their income or donations. To qualify for tax-exempt status, NGOs must meet certain requirements, such as being organized for a charitable purpose and having no private shareholders.

Key Aspects of Tax-Exempt Status

Eligibility Criteria: To qualify for tax-exempt status, an organization must meet the requirements set forth by the relevant tax authority. The criteria typically include operating exclusively for charitable, educational, religious, scientific, literary, or similar purposes that benefit the broader public interest.
Charitable Purposes: The primary purpose of an organization seeking tax-exempt status must be to serve the public interest rather than the interests of private individuals or entities. The organization’s activities should be focused on providing services, assistance, or advancement of specific causes that benefit the community or society as a whole.
Non-Distribution Constraint: Tax-exempt organizations are generally subject to a non-distribution constraint, which means that their earnings and assets cannot be used to benefit individuals or shareholders. Instead, any surplus funds must be reinvested into furthering the organization’s mission.
Application Process: Organizations seeking tax-exempt status typically need to apply with the appropriate tax authority. The application may require the submission of various documents, including the organization’s purpose, governing structure, financial information, and planned activities.
Public Disclosure: Tax-exempt organizations are often required to disclose certain financial information and other details to the public. This transparency helps build trust with donors and stakeholders and ensures accountability.
Tax Benefits: Once granted tax-exempt status, the organization becomes eligible for specific tax benefits, such as exemption from income tax on qualifying revenue and the ability to receive tax-deductible donations from individual and corporate donors.
Limitations on Political Activities: Tax-exempt organizations are generally restricted in engaging in certain political activities, including direct or indirect support for political candidates or campaigns. These restrictions aim to maintain the organization’s focus on its charitable mission rather than partisan interests.
Maintaining Compliance: Organizations with tax-exempt status must comply with ongoing reporting and record-keeping requirements. Failure to meet these obligations could result in the revocation of the tax-exempt status.

How Are NGOs Funded?

Start an NGO in India – NGOs are funded in a variety of ways, including:

Donations from individuals, corporations, and foundations
Grants from governments and international organizations
Membership fees
Program fees
Earned income from businesses or investments

Here are some common methods through which NGOs are funded:

Individual Donations: Individual donors, including private citizens, philanthropists, and concerned members of the public, contribute financially to NGOs. These donations can be one-time gifts or regular contributions, and they often form a significant portion of an NGO’s funding.
Grants and Foundations: NGOs seek financial support from foundations, both private and corporate, that provide grants for specific projects aligned with their mission. These foundations may focus on various areas, such as health, education, environment, and social welfare.
Corporate Sponsorships: Corporations and businesses often engage in corporate social responsibility (CSR) initiatives by sponsoring NGOs’ programs and projects. Corporate sponsorships not only provide financial support but also enhance the company’s reputation and brand image.
Government Funding: Some NGOs receive funding from government agencies at the local, regional, or national levels. Governments may allocate funds to NGOs that complement their efforts in areas such as healthcare, education, poverty alleviation, and disaster relief.
International Aid and Development Agencies: NGOs working on global issues or operating in developing countries may receive financial support from international aid organizations and development agencies. These agencies, such as the United Nations, World Bank, and USAID, fund projects that align with their development goals.
Membership Fees: Certain NGOs have membership structures where individuals or organizations pay fees to become members. These fees contribute to the organization’s revenue and often come with benefits like participation in decision-making processes.
Earned Income and Social Enterprises: Some NGOs generate income through earned revenue, such as selling goods or services, conducting training programs, or offering consultancy services. Additionally, some NGOs run social enterprises, which are businesses with a social mission that generate profits to fund the NGO’s initiatives.
Crowdfunding: NGOs leverage online crowdfunding platforms to raise funds for specific projects or emergency relief efforts. These platforms allow individuals worldwide to contribute small amounts, collectively making a significant impact.
In-Kind Donations: Apart from monetary contributions, NGOs may receive in-kind donations, such as goods, equipment, or services, which can support their operations and projects without involving direct financial transactions.
Endowments and Trust Funds: Some NGOs build endowments or trust funds that generate investment income, ensuring financial stability and long-term sustainability.
Public Fundraising Events: NGOs organize public fundraising events, such as charity galas, concerts, and awareness campaigns, to engage with the community and raise funds for their causes.

What Is an Example of a Non-governmental Organisation?

An example of a well-known Non-Governmental Organization (NGO) in India is “Child Rights and You” (CRY). CRY is a leading child rights organization that works towards ensuring the rights and well-being of underprivileged children in India.

Established in 1979, CRY focuses on addressing issues such as child labor, child trafficking, lack of education opportunities, malnutrition, and child protection. The organization operates with the belief that every child has the right to a happy, healthy, and secure childhood.

CRY’s initiatives include supporting grassroots projects, advocacy campaigns, and policy interventions to create sustainable changes in the lives of children. The organization collaborates with local communities, government bodies, and other stakeholders to achieve its mission.

One of CRY’s key strengths is its emphasis on child participation, empowering children to be active agents of change, and ensuring their voices are heard in decision-making processes that affect their lives.

CRY’s efforts have had a significant impact on the lives of millions of children across India, enabling them to access education, healthcare, protection, and opportunities for a brighter future.

Through its transparent and accountable practices, CRY has earned the trust and support of numerous donors, volunteers, and partners who share the vision of a just and equitable society for all children.

CRY serves as an exemplary Indian NGO, advocating for child rights and working towards creating an environment where every child can thrive and realize their full potential.

Start an NGO: Difference Between an NGO and an NPO

Aspect	NGO (Non-Governmental Organization)	NPO (Non-Profit Organization)
Legal Definition	NGOs are organizations that operate independently of the government and are focused on addressing social, environmental, or humanitarian issues.	NPOs are organizations that do not distribute profits to individuals or stakeholders and reinvest any surplus funds into furthering their mission.
Funding Sources	NGOs in India are typically funded through donations, grants, corporate sponsorships, and international aid.	NPOs in India rely on various funding sources, including grants, donations, memberships, and earned income.
Mission and Activities	Indian NGOs engage in various activities, including providing education, healthcare, rural development, advocacy, and environmental conservation.	NPOs’ activities in India are generally focused on direct service provision, charitable work, community development, and service provision, charitable work, community development, and social welfare initiatives.
Political Activities	Indian NGOs may engage in advocacy and lobbying efforts to influence government policies and social change.	NPOs in India are generally restricted from participating in political activities and endorsing political candidates.
Governance Structure	Indian NGOs are governed by boards or governing bodies and may have members, but membership is not always mandatory.	NPOs in India are governed by boards or trustees responsible for overseeing the organization’s activities.
Tax-Exempt Status	Indian NGOs can seek tax-exempt status, allowing them to receive tax benefits and incentivizing donations.	NPOs in India can also seek tax-exempt status, making them eligible for tax benefits and encouraging philanthropy.
Geographic Scope	Indian NGOs can operate at the local, state, national, or international level, depending on their mission and reach.	NPOs in India can operate at the local, state, national, or international level, serving specific communities or broader causes.
Examples	CRY (Child Rights and You), Goonj, Akshaya Patra, Greenpeace India, Teach for India, WWF India.	The Akshaya Patra Foundation, HelpAge India, Smile Foundation, Goonj

Conclusion

Any non-profit organization should strive to become obsolete at some point. This indicates that the challenge they’re trying to solve has been resolved. It’s an achievement if finding issues to solve becomes more difficult. On the other hand, the need is likely to outlast the NGO. Always keep the long-term in mind when launching an NGO. Create a robust network and long-lasting partnerships. Take the time to lay a solid foundation for your company that will last for years. You’ll start an NGO in India up for success if you’re meticulous and thoughtful in the early stages. Vakilsearch is offering services to cover your legal needs on how to start an NGO in India, and we provide legal services that include documentation, accounting, etc.

Frequently Asked Questions: Start an NGO in India

What is the procedure to start an NGO in India?

To start an NGO in India, first, identify your cause, form a team, create a mission, choose a legal structure, register and initiate fundraising and outreach efforts.

How to start an NGO from scratch?

Starting an NGO from scratch involves gathering a team, defining a clear mission, choosing a legal structure, registering with the relevant authority, drafting necessary documents, obtaining approvals, opening a bank account, ensuring compliance, and launching fundraising and outreach activities.

How much does it cost to start an NGO in India?

The cost of start an NGO in India varies based on factors like legal fees, registration charges, and operational expenses. Consult legal experts for accurate cost estimates.