How To Start An NGO: 7 Steps, Types Of NGO And Its Benefits

May 10, 2024
how to start an ngo

Quick Summary

  • NGO stands for Non-Governmental Organization.
  • Top 3 steps to start an NGO are decide the cause and mission of your NGO, set up the board of directors/members and decide the name of your NGO.
  • 3 Steps to get certified as an NGO; get a DSC and DIN, a Legal Name and approval form INC 12.

Table of Contents

A term for a Non-Governmental Organization, “NGO,” was first coined by the United Nations in 1945.) Mostly referred to in its short form NGO, It is defined as an independent organization that works towards the welfare of local communities, civil society, and more. If you are contemplating how to start an NGO, understanding its pivotal role in community betterment is essential. They play an important role in societal development, community welfare, and increasing citizen participation.

So if you are interested in working towards these goals, a question may arise: how to start an NGO in India?

According to NITI Aayog, India currently boasts about 1,63,235 registered NGOs. These NGOs are actively working to spread the importance of education and health across the country. Gender equality, environmental protection and many such causes are continuously being championed by NGOs in India.

If you are looking to start an NGO, you have probably spent ages wading through search engine results. Browsing through some popular searches like ‘Can I start an NGO alone’ or ‘How to start an NGO and get funding’.

You need not look further. In this blog, we will help you know all about NGOs in India — the benefits of starting an NGO, of NGOs in India. We have also provided a detailed step-by-step guide on how to start an NGO in India

The Types Of NGO Registration And Its Benefits

Here is a list of different types of NGOs in India along with NGO examples:

1. Public Trust Registration

The Public Charitable Trust registration falls under the Indian Trust Act of 1882. You can set up this trust with a self-governing board of directors.

They provide aid and funding for the basic needs of society’s neediest. These benefits are distributed equally regardless of the caste, gender or religion of the beneficiary.

Public trusts are charitable institutions that benefit the public at large. Some examples of public trusts are orphanages and nursing homes.

Advantages of Trust Registration

  • A public trust is a permanent and registered trust and cannot be dissolved by anyone. Once you have established it, it will keep benefitting society at large.
  • You can also merge with trusts with similar values and causes.
  • A public charity also receives tax exemptions if 85% of your organization’s income is applied to charitable work.

2. Society Registration

According to the Society Registration Act of 1860, a society is a multi-member organization. It is set up with the primary goal of supporting arts and educational institutions. They establish funds for orphans and build museums. They also educate the general public about several societal and political issues.

Most society NGOs are focused on the advancement of humanities, science, and arts and literature. A good example of this is The Crafts Council of India established by Kamaladevi Chattopadhyay in 1964.

Benefits under Society Registration

There are many benefits of NGOs to the community. Some of the advantages of Society Registration include:

  • A registered society is democratic. Committee representatives are chosen democratically by members of the society.
  • Upon receiving a certificate of completion from income tax officials, the society may be exempt from paying taxes.
  • A society can own, buy and sell its property.
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3. Section 8 Company Registration

Companies registered under Section 8 of the Companies Act of 2013 work towards societal welfare. As a company, you may choose to promote commerce, art or science. Or you could work towards making sports and education accessible to all. As a Section 8 company, you must apply your earned profits to the welfare of these objectives.

Benefits of Section 8 Company Registration

There are quite a few advantages applied to a Section 8 Company which are:

  • A Section 8 company enjoys all the privileges of a limited company. This means that the shareholders are not personally responsible for the company’s debts.
  • You do not require a minimum share capital for its establishment.
  • Donors can claim tax benefits upon donating to these companies.
  • If the company acquires an FCRA license it can receive donations and grants from abroad as well.

7 Easy Steps on How to Start an NGO in India

One of the questions probably troubling you right now is how to start an NGO in India. You have understood the different types of NGOs but establishing one can be a challenge.

Here is a 7-step guide on how to register a charity organisation in India:

Step 1: Decide the cause and mission of your NGO

Determine your organization’s objectives before registering as an NGO. You need to list the causes you strongly believe in and identify with. Then, elaborate on your NGO’s values and mission statement. This will allow you to select the ideal board members and identify your target market.

For instance, you might support issues like environmental preservation, animal welfare, and women’s empowerment. But if you care deeply about women’s issues, make this subject the focal point of your organization’s cause.

To understand where your passions lie, you could first work with other NGOs. Experience at other organizations will aid you in setting up your own NGO.

Step 2: Set up the board of directors/members

A board of directors for an NGO need to be experienced in various verticals. To ensure the smooth running of the non-profit, you’ll need skilled administrators, managers and legal representatives.

There are various accounts involved when managing an NGO. The management of donations and these accounts need to be handled with utmost care. Ensure that you onboard only those that you can trust implicitly. Hire people who are as passionate about working towards your cause as you are.

Step 3: Decide the name of your NGO

Research the market to understand how other organizations in your niche named themselves. If your chosen name is taken, you could look into synonyms for the same.

When choosing a name for your organization, take into account its cultural and historical significance. Your NGOs name will be its identity going forward. So choose carefully.

Step 4: Memorandum Articles of Incorporation/Articles of Association

Have your legal representative draft the articles of association at this point. Your board of directors is in place. Your NGO name, address, and goals have also been defined. The articles are documents that are essentially an association’s user manual. It describes the organization’s purpose and operation regulations. Other information listed under this document includes –

  • Company name and purpose.
  • The share capital.
  • Organizational structure.

Step 5: Get your NGO registered

Start the procedure for NGO registration on NGO Darpan, a government website maintained by NITI Aayog. Keep the required documents ready with you for registration purposes. When registering you will need to provide your name, address, and contact details.

Once an administrator reviews and verifies your provided documents, you will receive an email. It usually takes up to 48 hours for the confirmation of registration.

Step 6: Start collecting funds

Set your funding goals and engage your team to start collecting them. Start small and set achievable goals. Money can come in through various windows in NGOs. Either through private donations, public funding, membership fees, or more.

A lot of NGOs are also crowd funded regularly. You can use your network of fellow social workers to start a fund. Or you could approach private companies related to your cause to help fund the NGO. Make sure to keep your accounts clean and organized.

Step 7: Build a wide network

Don’t stop networking. Networking is the single greatest tool to spread the word and earn millions and more. Connections with other NGOs in the field are very necessary. At this stage, you are trying to build your credibility. With the help of established NGOs, you’ll be able to build trust with the audience and other organizations.

Keep this in mind, your network can lead you to better funding and campaigning opportunities.

Also Read: How to Register a Startup in India? Here’s Your Step-by-Step Guide!

How to Get Certified as an NGO?

Is your goal to start an NGO in India? Founding an NGO to help develop communities require certain key registrations with the Indian Government. These include the following –

1. Getting a DSC and DIN

DSC is a Digital Signature Certificate that is essential to verify the authenticity of online documents. With most work having shifted online, DSC is an important certificate to obtain. There are three classes of DSC – classes 1, 2, and 3. A director of an organization must receive a Class 2 or higher certificate.

These signatures are renewable and usually are valid for one to two years. To obtain certain classes of DSC you must first generate a DIN or Director Identification Number. When applying for a DIN, you need to submit the SPICe Form, a DIR-3 Form, and the DIR-6 Form.

Once you have registered for DSC and DIN, it is essential to register the organization’s name. For this, you will be required to fill out and submit eForm INC-1. Key points to keep in mind when filling in the form are –

  • The name cannot match the name of another existing company registered under the 2013 Companies Act.
  • The name you plan to register should not indicate any sponsorship from the central government.

When filing the form, you will be required to enter your DIN number. In case, you haven’t yet been allotted a DIN you can enter your PAN or passport number.

3. Approval form INC 12

Once the name of your organization has been approved you have to submit Form INC 12. This form is an application for a license under section 8 of the 2013 Companies Act.

4. Issuing the License

Upon filing, the form undergoes verification by the Registrars of Companies. The INC-12 form needs to be filed with the following documents to ensure a smooth registration procedure.

  • Memorandum of Association (MoA) / Articles of Association (AOA) Form INC 13 with photographs
  • A notarized declaration form INC-14 and INC-15 have to be submitted by the applicants.
  • A three-year account statement with projected income and expenses.
  • A list of directors and other top management officials.

Once all of the above documents are verified, the RoC will issue your license.

5. Incorporation of the company with SPICe form INC-3

The Simplified Proforma for Incorporation Company Electronically is an e-form required for a company’s incorporation. Spice, as it’s more commonly known, requires the following details upon application –

  • Information about the company such as the capital structure or address.
  • Details of directors like their name, PAN, address, and other proofs need to be submitted as well.
  • Mention the date, place, and mode of your stamp duty payment.
  • Your company needs PAN and TAN numbers as well. Upon filing for incorporation include your brand’s Area and Range Code, and AO No details.
  • Optional attachments include your company’s investment details and EPF / IEC registration details.

Why Should You Register As An NGO In India?

An NGO can be set up as a trust, society, or Section 8 company under Indian law. After reading the overview above, you might already be set on starting an NGO. But you may still be pondering over what are the benefits of starting an NGO.

Don’t worry. We have listed out a few Advantages of establishing an NGO in India:

1. Tax Exemption

Under the Companies Act of 2013, NGOs are exempt from paying taxes. Instead, the funds gathered can be redirected toward the cause of your NGO.

2. Perpetual Succession

The Court of India is the only authority that can order the dismantling of the organization, which is a registered NGO. This means that even after the exit of the founders the NGO can continue doing its noble work.

3. Preservation of Name

At the time of incorporation, you registered the name of your NGO under the Companies Act. No individual or entity will be allowed to use The name throughout India, except you.

4. Help you with Finance

A planned financial strategy can assist you in operating a tax-free business with the assistance of your NGO. An NGO can also buy and register land and properties under its name. Personal liabilities will not affect the protection of these properties.

5. No limit on share capital requirement

You can start an NGO without money in India. The organization’s growth is not dependent on the sale of high-capital shares. Instead, it can survive on the charities it receives as part of its cause.

It’s possible to start your own NGO

NGOs are non-governmental organizations that work toward the development and welfare of society. In India, there are three types of NGOs – trust, society, and Section 8 companies. Once you have gathered the expertise, you can go ahead and register to start your organization.

To set up an NGO you need to first decide on your passion. Defining your goal and mission will help you further your cause and hire the right people. With 2 or more directors, you can set up a public trust or a Section 8 company. But if you wish to promote the arts and literature, you should consider registering with a society NGO.

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Frequently Asked Questions (FAQ’s)

How much does it cost to start an NGO?

The registration fee for each type of NGO may vary from state to state depending on the taxes applied.
1. Public Trust: ₹ 13,999
2. Society Registration: ₹ 12,999
3. Section 8 Company: ₹ 4,999
During establishment, NGOs don’t require a minimum share capital. This means that you can start an NGO just with donations received.

Can I start my own NGO?

Yes you can but 2 persons are needed to register a trust. While at least 7 members are required to register a society under the Societies Registration Act. You will need a minimum of 2 directors to register a private limited section 8.

Do NGOs pay taxes in India?

Incomes of the NGOs registered under Section 12A of the 1961 Income Tax Act tax exempted. Charitable organizations are also expected to direct 85% of their incomes to their cause to be exempted. So most organizations pay regular taxes until they can meet any of the above criteria.

How do NGOs make money?

NGOs make most money with the help of Grants and Donations, Selling Goods and Services and Government Schemes and Programs.

Do NGOs pay taxes?

No NGOs don’t need to pay taxes in most of the cases. But there are some specific conditions that need to be met in order to qualify for tax exemption.

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