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8 Steps to Start an NGO in India – Forming an NGO

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?

Non-governmental organisations (NGOs) are the backbone of India’s social sector (NGOs). These organisations are critical in assisting the poorer strata of society as well as the weaker sectors of our economy that the government frequently overlooks. As a result, it is frequently stated that NGOs perform tasks that an affluent welfare state would undertake. In India, on the other hand, Start an NGO, sometimes known as charity organisations, rely on donations from the wealthy.

In simple words, an NGO is a legally constituted and binding, non-governmental organisation created by a group of people with no involvement from the government.

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.

Understanding NGOs

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

Start an NGO: xHow 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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 organization, making strategic decisions, and ensuring accountability.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. Launch and Monitor Programs:  Start an 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:

  1. Determine your NGO’s mission and cause
  2. Form the Board of Directors/Members
  3. Choose a name for your NGO
  4. Memorandum Articles of Incorporation/ Articles of Association
  5. Register your NGO
  6. Collect Funds
  7. Establish a wide network

Types of NGOs

Non-Governmental Organizations (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 categorized as follows:

  1. Advocacy and Human Rights NGOs: These organizations 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 marginalized or oppressed groups.
  2. 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.
  3. 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.
  4. 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.
  5. 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, maternal health, or promote overall healthcare access.
  6. Education NGOs: Education NGOs work to enhance access to quality education, especially in underserved areas. They may support schools, offer scholarships, vocational training, and promote literacy programs.
  7. Emergency Relief and Humanitarian NGOs: These organizations 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.
  8. 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.
  9. 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.
  10. Research and Policy NGOs: These organizations conduct research and analysis on various social, economic, and environmental issues, contributing to evidence-based policymaking and advocating for positive change.
  11. 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.
  12. Peacebuilding and Conflict Resolution NGOs: Peace-focused NGOs work to prevent and resolve conflicts, promote dialogue, reconciliation, and foster peaceful coexistence.
  13. Social Enterprise NGOs: Social enterprise NGOs operate businesses with a social mission, using profits to fund their social and environmental initiatives.
  14. Community-Based NGOs: These organizations operate at the grassroots level, engaging with local communities to address specific needs and challenges.
  15. International NGOs (INGOs): INGOs operate globally, working across borders to address international issues and provide assistance in multiple countries.

Start an NGO – NGO Setup: 

To be successful with your approach to creating and maintaining a non-profit organisation, 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

  1. 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.
  2. 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.
  3. 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 to get a license.
  4. 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.
  5. 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 decreed 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. 
  6. 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: 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.
  7. 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, implementing a fundraising plan once all the board members have determined your NGOs 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.
  8. Working on Projects – The final stage is to start an NGO 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: 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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 – 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. Endowments and Trust Funds: Some NGOs build endowments or trust funds that generate investment income, ensuring financial stability and long-term sustainability.
  11. 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 NPOs are organizations that do not distribute profits to
and are focused on addressing social, environmental, or humanitarian individuals or stakeholders and reinvest any surplus funds into
issues. furthering their mission.
Funding Sources NGOs in India are typically funded through donations, grants, NPOs in India rely on various funding sources, including
corporate sponsorships, and international aid. grants, donations, memberships, and earned income.
Mission and Activities Indian NGOs engage in various activities, including providing NPOs’ activities in India are generally focused on direct
education, healthcare, rural development, advocacy, and environmental service provision, charitable work, community development, and
conservation. social welfare initiatives.
Political Activities Indian NGOs may engage in advocacy and lobbying efforts to influence NPOs in India are generally restricted from participating in
government policies and social change. political activities and endorsing political candidates.
Governance Structure Indian NGOs are governed by boards or governing bodies, and may have NPOs in India are governed by boards or trustees responsible for
members, but membership is not always mandatory. overseeing the organization’s activities.
Tax-Exempt Status Indian NGOs can seek tax-exempt status, allowing them to receive tax NPOs in India can also seek tax-exempt status, making them
benefits and incentivizing donations. eligible for tax benefits and encouraging philanthropy.
Geographic Scope Indian NGOs can operate at the local, state, national, or international NPOs in India can operate at the local, state, national, or
level, depending on their mission and reach. international level, serving specific communities or broader
Examples CRY (Child Rights and You), Goonj, Akshaya Patra, Greenpeace India, The Akshaya Patra Foundation, HelpAge India, Smile Foundation,
Teach for India, WWF India. Goonj.


Any non-profit organisation 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 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 begin an NGO in India, and we provide legal services that include documentation, accounting, etc.,

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