NGO or Non-Governmental Organization is a term that was first coined in 1945 by the newly formed United Nations. 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. 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?
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
Here is a list of different types of NGOs in India along with NGO examples –
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.
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 –
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. These include –
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 the NGO registration process –
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.
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 to work towards your cause as you are.
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.
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 –
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 your provided documents are reviewed and verified by an administrator you will receive an email. It usually takes up to 48 hours for the confirmation of registration.
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 crowdfunded 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.
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.
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 –
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 –
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.
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.
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.
Once all of the above documents are verified, the RoC will issue your license.
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 –
Under Indian law, an NGO can be set up as a trust, society, or Section 8 company. 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 –
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.
As a registered NGO, the organization can only be dismantled by the Order of the Court of India. This means that even after the exit of the founders the NGO can continue doing its noble work.
At the time of incorporation, you registered the name of your NGO under the Companies Act. This means that no other individual or entity will be allowed to use The name throughout India.
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. These properties will be protected from personal liabilities.
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.
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 a society registration.
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The registration fee for each type of NGO may vary from state to state depending on the taxes applied. But to give you an idea, the registration fee may amount to –
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.
At least 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 company.
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.
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