Learn everything about NGO grants, including how it can be received from different entities for carrying out welfare-based activities.
Learn everything about NGO grants, including how it can be received from different entities for carrying out welfare-based activities. A Non-Governmental Organisation (NGO) is a non-profit entity established to grow and develop a cause. The purpose of its establishment is to engage in an activity directed towards a non-profit goal which can be social upliftment, political, humanitarian, and cultural. It can also be incorporated as a company under The Companies Act to promote objectives such as art, sports, commerce, education, protection of the environment, charity, etc. The profits from such entities must be invested again for the same objective. The government must approve these objectives of the organisation.
Interestingly, there is no accurate definition of NGO or any specific meaning. NGOs may include many types of groups, communities and institutions that focus entirely on the betterment of society without any government intervention, independently.
Even though an NGO is completely engaged in the non-profit activity, it can also enter into commercial activity, provided that profits from such activity must be used for social welfare.
However, as the title indicates, NGOs will not receive much funding. The amount of grants can sometimes be as low as USD 1,000, and in rare scenarios, as high as USD 50,000. Keep reading if you’re an NGO seeking small grants. Here is a short list of foundations that provide small grants to NGOs that might be relevant to your program.
Different Sources of NGO Grants
NGOs earn donations from individuals, companies, governments, local authorities, institutions, or foreign entities. They often charge entrance fees or membership to join their cause. The advantage of donating to an NGO is a benefit under deduction from Income Tax section 80G, which is beneficial for the donor. For companies, any donation would aid in Corporate Social Responsibility (CSR), which gives additional tax benefits to corporate entities.
These various sources from which the NGO grants can be procured are discussed below.
Conventional Sources
These are the primary sources through which generally NGO make money, that is donations, fees, memberships, etc.
Non-conventional Sources
Non-conventional sources include alternate ways of funding, which can be stated as fundraising events, sale of artwork, functions and events.
Multilateral And Bilateral Aid
Multilateral and bilateral aid is the major source of funding. These methods originate way back from the offices of foreign developed countries, and multilateral aid means that any organisation formed by more than two countries for a common cause and goal becomes a multilateral entity. These include UNESCO, United Nations, the Asian Development Bank, CRY and the World Bank.
These giant organisations were created to create an international extension of support for overcoming poverty, world hunger, quality life for the basic needs of people, and reducing imbalance in society by all the means possible with the help of member countries.
Even though the organisation can be established for the greater good but can have agendas with complex goals and focused targets, funding is not compulsory in NGOs. Still, a small contribution impacts people’s lives somewhere around the globe.
In developing countries, NGOs have little difficulty spreading their arm across the land to the needy as the funding is limited. If the organisation is established to protect culture or art, the NGO might receive government grants from the respective state government or corporate bodies.
The massive progress of NGOs lies in the small contributions and roles played by the society, as mere funding does not satisfy the goal. NGOs can only be successful when the society joins its cause by understanding the objects and activity. At times NGOs can be formed to support some non-profit goal to support other countries’ art or culture as well.
International Organisations
Another most important source by which NGOs can acquire funding is through International organisations/private charities/foundations/ which are privately handled. Besides, NGOs possess not just financial tranquillity but technical knowledge as well. It has been observed that countries with higher economic growth have presided over better NGO stability. With a presence of a flourishing private sector, NGOs can organise events in association with corporates and companies and can also look upon the benefits and charity in the way of CSR. This can be a major source of funding for the NGO.
Challenges Faced in Receiving NGO Grants
Donors are the lifeline of the NGOs in most cases. However, not every NGO is blessed with tremendous amounts of donations and funds from various sources, which are quite difficult to acquire. The few limitations of NGOs are lack of support, insufficient funds, competitors, and objects not being widely supported.
- Lack of support means no contribution of expertise or resources.
- Insufficient funds are one of the major reasons why NGOs struggle to do something good. In most cases, the actions planned are limited by the budget, and the amount is not that easy to procure.
- Public trust, many scams are conducted by way of Ngo, which in turn reduces NGOs’ credibility in such a way that gaining trust is a hard task.
The NGOs sometimes suffer clashes between the members due to some private collisions or embezzlement of funds within the NGO, as not most of the NGOs provide fees or remuneration to the members for their contribution to the organisation’s activity. These are the most common highlighted reasons NGOs have to face in general, which limit their progress and trap the organisation in its internal disputes.
Bottom Line
The government introduced a portal: https://grants-msje.gov.in/ngo-login for NGOs where they can introduce their cause and action, upon which the funds can be granted to the NGO. This initiative was intended to promote the Ngos’ activity and focus on goals instead of searching for ways to acquire funds. To use this portal, visit one-anudaan, fill up the application form and apply for the NGO grants.
The process is easy and involves a checklist, inspection report, reporting, scrutinising, approval and sanction only. If the government is satisfied, the same will be disbursed at the earliest. NGO registration requires a trustworthy team and a brave heart to stand for a cause unwithered. Those who prevail in the trying times and aid others in need make a strong impact in the hearts of the needy and desperate. Thus, NGOs operate independently, free from all interventions and disruption.
Visit us on vakilsearch, get all your query resolved with our finest expert just a call away. We are a reliable platform, and provide services that cater to the legal needs of startups and well-established businesses. Our services include incorporation, government registrations and filings, accounting, documentation, and annual compliances, among others. Check our website for more details.
