5 things you didn’t know about NGOs and foreign funding

The UN High Commissioner for Human Rights Michelle Bachelet has appealed to the Indian government to review the Foreign Contribution (Regulation) Act (FCRA) and its compliance with international human rights norms. Bachelet regretted that the Act was being “used to deter or punish NGOs for human rights reporting”.

1. What is the FCRA?

The Indian government regulates donations and cash offers which are given by foreigners to Indian organisations or citizens. The law regulating such foreign funding is the Foreign Contribution (Regulation) Act of 2010 i.e., FCRA. Organisations, associations or Non-Governmental Organisations (NGOs) in India cannot receive foreign funds if they do not have a license under the FCRA.

Earlier this year, the government suspended the FCRA license of six NGOs, including four Christian associations. The suspension of the FCRA license means that these NGOs can no longer receive fresh foreign funds from donors.

2. What does the FCRA regulate?

The FCRA regulates the acceptance and use of foreign contributions or foreign hospitality, and prohibits any foreign funding given for any activities that are harmful to the national interest of India.

A foreign contribution means a donation, delivery or transfer made by any foreign source. The contribution could be in the form of donating a particular item, transfer of any currency etc. Foreign hospitality means any offer made by a foreign source for funding the travel costs of a person to any foreign country, or for providing a person with free accommodation, transport or medical treatment.

3. What are foreign sources of funding?

The FCRA regulates funding from ‘foreign sources’, including funding given by:

1. a) Foreign governments
2. b) Any international agency, except the United Nations
3. c) Foreign companies
4. d) A society, club or other association of individuals formed or registered outside India
5. e) Citizens of foreign countries

4. Why do NGOs need FCRA approval?

Section 11 of the FCRA states that any individual or association having a definite cultural, economic, educational, religious or social programme has to get a certificate of registration from the government before accepting foreign contributions. This means that NGOs need an FCRA registration to accept foreign contributions. If an NGO is not registered under FCRA, it needs the prior permission of the government to accept a foreign contribution for a specific purpose.

To get registered under the FCRA, the association or NGO will make an application to the government. After the government receives an application for granting a registration certificate, it will make certain inquiries and then decide if it will grant the FCRA registration. This usually happens within 90 days from the date of receiving the application. In case the government does not grant the registration certificate within the period of 90 days, it will communicate the reasons for rejection to the applicant.

5. Can the government cancel/suspend the FCRA certificate?

For certain reasons such as public interest, the government may cancel the FCRA certificate of an association/NGO. While deciding whether to cancel the FCRA certificate, the government also has the power to temporarily suspend the FCRA certificate for a period of 180 days. A person whose FCRA certificate has been suspended is not allowed to receive any foreign contribution during the period of suspension.