NGO & NPO Management

Choosing the structure

The three common forms — a trust, a society, and a Section 8 company — differ in how they are governed, how easily they can be amended, and how funders regard them. The choice made at formation constrains everything that follows, so it is worth making deliberately.

• Trust — simplest to form, governed by the trust deed, with limited flexibility to amend once settled
• Society — member-governed, suited to institutions with a broad participatory base
• Section 8 company — the most demanding in compliance terms, and generally the structure institutional funders are most comfortable with

Registration and recognition

• Formation and registration of trusts, societies and Section 8 companies
• Registration under Section 12A for exemption of income
• Registration under Section 80G for deduction in the hands of donors
• Registration and renewal under the Foreign Contribution (Regulation) Act
• Darpan registration and related recognitions

Ongoing compliance

Exemptions granted are not permanent. Renewals, annual returns and utilisation reporting each carry their own timeline, and a lapse can put the entity’s exempt status at risk rather than merely attracting a penalty.

• Annual returns and audit under the applicable statute
• FCRA annual return and maintenance of the designated account
• Utilisation certificates and donor-specific reporting
• Periodic renewal of 12A, 80G and FCRA registrations

Governance frameworks

Institutional funders increasingly assess governance before they assess programmes. We work with boards and trustees to put in place the framework such an assessment looks for — documented delegation of authority, conflict of interest policy, segregation between programme and finance functions, and a reporting cycle the board can actually supervise.

Programme and fund accounting

Where an institution runs multiple programmes with different funders, accounting must track restricted and unrestricted funds separately from the outset. Retrofitting this after a year of mixed records is considerably harder than establishing it correctly at the start.