1. NGO
1. Key Ingredients of an NGO
The key ingredients that make or break an NGO/NPO, of course, are its programmes and
projects. It covers the issues and themes that the NGO/NPO addresses, the target areas or
communities that it works in, funding available and the activity's partners.
These are influenced by, among other things:
• the felt needs of target community (what are the real problems faced by the target
community? How can the NGO/NPO identify them, or create a forum where it can be
expressed by the community?)
• staff expertise available (what expertise and skills do the NGO/NPO staff posess? Are
they full-time or part-time staff? How can external human resources be mobilized?)
• funding strategy (what sources of funding can the NGO/NPO tap into? Which of these
are local and international? How can funds for short-term and long-term activities be
mobilized?)
While it is critical that a new NGO/NPO ensure that it is properly registered with the public
authorities of the country, it is of even more importance to 'register' with its target community -
in terms of ensuring acceptability, building trust, programme and project effectiveness, and
bringing about real change.

2. 2. Develop the NGO's Bye-laws
Bylaws are the set of rules under which the organization will operate. They typically include
such items as (a) number of members, term length, nomination process, committees, and
meetings; (b) fiscal year/accounting cycles, committees, and officers' responsibilities; (c)
methodologies, tools, and strategies, monitoring and evaluation etc.; and (d) how to amend the
bylaws themselves.
Note that Bye-laws can also be called the NGO's "constitution" , "article of association" or
"statues", depending ont he law of a particular country.
Typical bye-laws of an NGO will contain the following information:
• Preamble
• Organization name and acronym
• Organizational logo
• Basic aim and purpose of organization
• Mission statement
• Functions
• Membership (types, conditions/qualifications of members, status, length of service,
procedure to become members, rights and obligations, termination)
• Advisory board (role and functions, qualitifications of board members, authority,
elections, members)
• Organizational structure
• Asset mamagement (Finance and property, membership fees)
• Legal status
• Contact address
• Dissolution of NGO
• Ammendments, modifications, revisions of bye-laws

3. 3. Establish the NGO's Board of Directors
Prior to incorporating or registering, an organization should first establish a Board of Directors
or an Advisory Board and develop the organization's mission. The members of the board, as a
group, have trustee and legal responsibility for the actions and operation of the organization.
There are minimum levels of involvement required of board members in organizational and
operational management:
• financial management
• planning
• programme
• resource development (fund raising)
• human resource management
• information management
• marketing and public relations
• governance (board affairs)
One of the steps in incorporating is filing the NGO's bye-laws (also called articles of association
or incorporation) and many authorities require multiple officer and board member signatures.

4. 4. Register the NGO
• The NGO's name: Check to see if the proposed name of the organization is already in
use. Check with the local government registry or similar agency/board to see if your
proposed name is already taken. It may be necessary to provide two or three optional
names for the NGO/NPO! This also applies to the logo of the NGO, if you plan to use
one.
• Registering or incorporating within your local government. It will be necessary to
incorporate the organization within its given local government/agency by writing and
filing the necessary forms. In most countries, there are specialized departments or officers
within local governments that deal with registering an NGO (which may also be called by
other different names: non-profit organization, voluntary organization, people's
organization, etc.)
There are several documents that need to be submitted, and these differ from country to
country. Information on the NGO/NPO Board, its mission statement, programmes and
projects info, staff members, funding sources, etc. will be necessary.
A typical set of documents to be submitted to the appropriate authority for registering an
NGO includes - Memorandum of Association or Bye-laws, including applicable rules and
regulations; report of annual activities, financial reports/audit reports; sources and pattern
of income and expenditure; minutes of the Executive Board or General Assembly that
endorses the setting up of the NGO; letters of support (references) etc.
• Laws and Regulations: Different countries have different systems in place, butt a
number of laws and regulations affect the functioning of an NGO. These may be
local/provincial regulations, or national laws. It may relate to:
o tax (or tax-exemption) laws
o finance and banking aspects (including overseas money transfer and foreign
exchange)
o Laws related to organizational aspects
o Labour laws
Study these and other relevant laws in detail to understand their implications to the
NGO/NPO. Talk to a businessman - many of the laws related to a business may also be
relevant to an NGO/NPO.

5. 5. Funding and Fund-Raising
• Funding and Fund raising: Remember money does not grow on trees. Even if a
'donation' is made to a programme or activity, it is done with an objective in mind -
sometimes simply to get good karma. This is critical to understand when we approach a
potential sponsor - why is he donating? What advantages can they obtain? What PR
milage can they receive from the act?
It is equally important to maintain professionalism, within the NGO, to build adequate
trust with the poptential sponsor or donor. Transparancy, accountability, communication
etc. should be an integral part of the NGO. A good strategy is to create a working
advisory group for each project or activity. This group will have two types of members -
strategic members, who will give weight and legitimacy, (and will also bring in key non-
financial resources) to the activity, and financial members who will make the actual
contribution, based on the strength of the strategic members!
Do not always depend on external or large sources of funding - sometimes, it can come
from surprising sources in your own backyard.
• Tax exemption: File for tax exemption with the national tax authority (where available).
Now that you have formed your board, incorporated your organization, and developed
your bylaws you are ready to file with the tax authorities for tax-exemption. The national
tax authority may require a number of forms for this process. Be prepared to have the
following information ready:
o A description of the organizations purpose and programs, including: who the
organization serves and why, constituency demographics, examples of training
materials, workshops, and other services, etc.
o Financial information: sources of funding; financial statements (revenue and
expense statement and a balance sheet) for three prior or two projected years.

6. 6. Office Management
 Seek staff and office supplies. Volunteers, staff secondments, retired advisors etc. help in
reducing personnel costs. Bulk purchases, surplus sales, voluntary donations, are ways to reduce
costs. Some common forms of support include:
• Consulting services (management, advertising, marketing, promotion, legal, taxation,
financial, strategic planning, project design, system development etc.)
• Financial support (capital costs, feasibility studies, small business start-up costs, credit
facilities for purchase of assets, sponsorships, travel grants, deficit finance etc.)
• Donate equipments (machinery, furniture, computers, office equipment and other
infrastructure)
• Donate products (educational, health care, construction, raw materials etc.)
• In-kind gifts (could be any products other than the company’s line of business)
• Loaned talent /executive sabbatical (paid time off to perform volunteerwork)
• Public relations services (NGO branding through corporate approaches)
• Technical assistance
• Use of corporate services/facilities (financial and administrative support services,
meeting space, mailing services, computer services, printing and duplicating etc.)
• Extend dealerships of products to NGOs, have a marketing partnerships forNGO products
• Sponsor salaries of NGO professionals for a certain period
 Applying for a nonprofit bulk mail permit. NGO/NPOs receive additional discounts on
bulk mailings. To receive these discounts, an organization must apply for a nonprofit bulk mail
permit. Contact a local post office and request the necessary information packet for this permit.
 Insure the organization. Basic insurance coverage for the organization, its directors, and
officers is critical when forming an effective and responsible organization. Many associations of
NGO/NPOs offer group purchasing programs for insurance and other services such as supplies,
employee benefits, and banking services. Basic insurance coverage should include the following
policies:
• Worker's Compensation
• General Liability
• Director's and Officer's Liability

7. 7. Networking and Project Management
• Networking and Partnership: Networking - getting in touch with institutions,
organizations, and individuals - anyone and everyone - who can be of help to the policies
and programmes is a very critical aspect of an NGO's functioning.
• Private sector: Do not hesitate to partner with the private sector - a company, a business,
a supermarket chain etc. This partnership should not be for funding purposes alone.
Private sector actors can bring many other resources too.
Remember that - (a) NGOs stand to gain by being efficient and productive, engaging the
commercial environment in their outreach and influencing companies to be socially
responsible, and (b) Companies stand to gain by being seen as socially responsible,
actively participating in social development and nation building, enlightened self-interest
- poverty eradication benefits the corporate sector in the long run, and also raising
employee morale.
BEsides, you can always learn a thing or two in project/office management from the
private sector!

8. 8. Legal Framework
The right of all citizens to form associations or unions is guaranteed by the Constitution of India,
Article 19(1) (c). Charitable organisations usually take the legal form of a trust, society, or non-
profit company (also called not-for-profit organisations or NGOs), and are regulated by a variety
of state and central government agencies, laws and authorities. Unsurprisingly for such a large
and diverse country there is also a wide diversity of charitable organisations within India.
However, while the sector is undoubtedly large, there remains a lack of reliable data about its
size and scope.
The Legal Framework
There are a variety of federal and state laws which are applicable to charitable organisations and
NGOs operating in India. These include:
Indian Trusts Act of 1882: this Act applies only to private trusts throughout India except the
state of Jammu and Kashmir and the Andaman and Nicobar Islands.
Bombay Public Trusts Act 1950: this legislation deals with charitable trusts in the states of
Maharashtra and Gujarat.
Charitable and Religious Trusts Act 1920: this law extends to the whole of India except the
State of Jammu and Kashmir. The Central Government can extend its coverage to Jammu and
Kashmir by notification in the Official Gazette,
Many states also have their own Public Trusts Acts, for further information, please visit the
following website: www.indianngos.com
Societies Registration Act 1860: this is a federal Act and is applicable generally to all states.
However some regions had already enacted their own laws, others have made amendments or
modifications to the Act, and
other states have passed completely new laws to regulate societies leading to considerable
variation across states.
Companies Act 1956: section 25 of the Companies Act 1956 deals with non-profit companies.
This Act is a federal Act and applies to non-profit companies operating in any state.
The Income Tax Act 1961 is a federal Act which applies in all states, and governs tax
exemption of not-for-profit organisations operating in India.
Funds received from overseas are governed by the Foreign Contribution (Regulation) Act
1976.
Regulatory framework

9. The Registrar of Societies has regulatory responsibility for societies. A society can either
register at the state level with the Registrar of Societies or at the District level with the District
Magistrate or the local office of the Registrar of Societies.
The Registrar of Companies is the regulatory authority for Section 25 companies.
Charitable trusts registered under the Bombay Public Trusts Act, applicable in Gujarat and
Maharashtra, are regulated by the Charity Commissioner in those states.
Benefits of registration:
Non-profit organisations may be eligible for tax exemption under the Income Tax Act 1961.
This stipulates that a not-for-profit organisation must:
• be organised for religious or charitable purposes;
• spend 85% of its income on the objects of the organisation; and
• use all funds for the public benefit.
Charitable purposes include "relief of the poor, education, medical relief, and the advancement
of any other object of general public utility."
NGOs involved in relief work and in the distribution of relief supplies to the needy are 100%
exempt from Indian customs duty on the import of items such as food, medicine, clothing and
blankets.
Reporting Requirements:
The Societies Registration Act 1860 provides that each society has to submit an annual report
and list details of its managing body every year to its local Registrar of Societies. The
requirement to file accounts differs between states. For further information on the reporting
requirements in different states, please see the following website: www.indianngos.com
All trusts registered under the Bombay Public Trusts Act have to file annual reports. In
addition, trusts with an income above Rs 1500 per annum have to submit audited accounts, and
those with an annual income below Rs 1500 have to submit income and expenditure statements
within 6 months of closing of accounts to the Charity Commissioner’s office.
All section 25 companies have to file:
• audited accounts;
• an annual report;
• an annual return with the Registrar of Companies; and
• important resolutions.
Additional requirements for all directors and significant shareholders are laid out in the Companies Act 1956.

10. The Registrar of Societies has regulatory responsibility for societies. A society can either
register at the state level with the Registrar of Societies or at the District level with the District
Magistrate or the local office of the Registrar of Societies.
The Registrar of Companies is the regulatory authority for Section 25 companies.
Charitable trusts registered under the Bombay Public Trusts Act, applicable in Gujarat and
Maharashtra, are regulated by the Charity Commissioner in those states.
Benefits of registration:
Non-profit organisations may be eligible for tax exemption under the Income Tax Act 1961.
This stipulates that a not-for-profit organisation must:
• be organised for religious or charitable purposes;
• spend 85% of its income on the objects of the organisation; and
• use all funds for the public benefit.
Charitable purposes include "relief of the poor, education, medical relief, and the advancement
of any other object of general public utility."
NGOs involved in relief work and in the distribution of relief supplies to the needy are 100%
exempt from Indian customs duty on the import of items such as food, medicine, clothing and
blankets.
Reporting Requirements:
The Societies Registration Act 1860 provides that each society has to submit an annual report
and list details of its managing body every year to its local Registrar of Societies. The
requirement to file accounts differs between states. For further information on the reporting
requirements in different states, please see the following website: www.indianngos.com
All trusts registered under the Bombay Public Trusts Act have to file annual reports. In
addition, trusts with an income above Rs 1500 per annum have to submit audited accounts, and
those with an annual income below Rs 1500 have to submit income and expenditure statements
within 6 months of closing of accounts to the Charity Commissioner’s office.
All section 25 companies have to file:
• audited accounts;
• an annual report;
• an annual return with the Registrar of Companies; and
• important resolutions.
Additional requirements for all directors and significant shareholders are laid out in the Companies Act 1956.