Foreign contribution regulation act funding
Nonprofit NGO organization should have a FCRA certificate to receive foreign currency funds. Any type of NGO should apply to the Central government for prior permission to receive foreign currency from outside India towards their foreign fundraising. When you deal with FCRA, you should also know about the documents during and after the process of FCRA. There are several penalties and punishable offenses, if you misuse foreign contribution, or if you import foreign funds without prior permission with Central government of India.
The important point which you should keep in mind before foreign fundraising or any type of foreign contribution from outside India.
A. You should maintain a separate bank account for foreign contribution, you should not mix your local bank transactions or any local currency dealings, with such FCRA bank account. Bankers may guide you more.
B. Up to date you should maintain accounts in separate books and account to avoid penalties, punishments, and imprisonments related to FCRA and foreign contribution activities.
Utilization of foreign contribution:-
Every asset acquired out of foreign contributions should be acquired and possessed in the name of the association and not in the name of its office bearers. The foreign contributions received after prior permission or permanent registration under the Act are to be utilized for the purpose for which they have been received. These are not to invested in any speculative investments including Mutual Funds or share markets. However, foreign donations may be utilized for self sustaining activities which is not meant for commercial activities. Under FCRA, there are various categories of recipients of international funds and Foreign Contribution Regulation Act has different stipulation for each of them. For instance, political parties cannot receive foreign funds but an organisation of political nature can receive foreign funds on case to case basis after obtaining prior permission. But an organisation of political nature cannot get registered with FCRA. An organisation having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government, or gets itself registered with the Central Government. Associations which are not registered or which have been denied registration may receive foreign contribution with specific prior permission of the Central Government.