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  • Opininon about establishing non profit organisation.

    Planning to set up a non profit organization? Want to know all the rules and regulations and management of sources of funding etc? No worries, our experts shall provide you with ample advice to proceed with the set up.

    Me and my friends have formed organisation for social causes to mentor kids and adults.Though this is a non profit organisation,we need money clients,pay staffs,coaches,admins etc.
    There are four levels:Grade A,Grade B,Grade C,Grade D in this organisation.

    What can be the source of funds to pay the coaches,admin and interns?
    We need to implement voting system so how to apply voting ratio method for A,B,C,D grades respectively.How to upgrade the members and do performance appraisal?
    How many votes can be allocated per person for grades A,B and C?

    Experts please guide me to do the same.
  • Answers

    3 Answers found.
  • You have already formed a non profit organisation (NPO) with some social service goal. Non profit organisations or Non Govt organisation (NGO) both are basically alike except in their salary and other remunerations policies to members. It is not clear that whether you have registered your NPO under the society act or not. Of course it is not essential for you to register the NPO as it can work without registration also. Main point is that no member should be given a salary or remuneration in a NPO.

    Coming to the funding aspect, this is the most difficult and crucial part as today many people have started NGO or NPO but many of them either have closed or did some illegal business and caught by the authorities and then were closed down. Anyway, still there are some methods which can be used in a transparent manner to attract more people to the noble cause as envisaged by your team. Some of the ways to raise funds are as follows -

    1. Make local groups - One has to explore the neighbourhood for like minded people who can contribute for this cause. So, you have to approach each and every capable individual in your area and acquaint him for this cause and most of the times they would come out to help. Keep them in loop and inform them the activities taken up by you and send them the pictures etc of the event that was being organised by you. People contribute when they see that there is a sincerity of purpose.
    2. Search some bigger NGO as umbrella - It is advisable to search some big NGO which is already doing that type of job and can help you in your objective if you reciprocate by helping them. Many small non profit groups take this method to escape from registration formalities and act under the umbrella of a bigger organisation. The bigger NGO would be providing tax relief to its contributors and a small part of the same funds would come to you. This is technically known as fiscal sponsorship.
    3. Giving circles - Nowadays there are giving circles being established in some areas where like minded people pool their donation and then extend to the needy organisations. Find out about them through social media in your area. They are a good potential for funding your NPO.
    4. Online appeals - This is a very interesting area as people who are present online sometimes feel pride in helping the needy in the internet arena. There is a lot of sentiments involved and funds are successfully raised through this technique.

    Initially one can work in unincorporated mode but if funds start flowing in then it is better to register the NPO to avoid unnecessary audit or other such regulatory issues. Please note that though this is a noble cause but the fact is that it requires a lot of homework and efforts and a lot of networking through social media, email and other such communication channels.

    Knowledge is power.

  • There are three types of non-profit organisations in India. They are
    1. Trusts: A trust can be established for many purposes like education, medical relief and poverty relief etc. These are for general public utility. In India, there is no governing law of these trusts in the National level. But some States have public Trusts Act.
    2. Societies: These are membership organisations. There will be a managing committee or a governing council. They have to register under the Societies registration act. The societies can be dissolved.
    3.Not-for-profit companies: The central government may issue these licenses under section 8 of Companies Act. It can be a limited company or a Private Limited company. There should not be any dividend to the members. The profit they are getting should be used for its purposes. Generally, the purposes can be the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any such other objects.
    The following are the steps you can follow for promoting your NPO
    1. Define the vision and machine.
    2. Finalise the list of promoters by contacting your known people or people who have similar interests. This will be the first governing body and you can register with this body The governing body will be responsible for all matters, including strategic planning, financial management, human resources and networking.
    3. Get the trust deed/ Memorandum of Association /Rules & Regulations made. This document should that contain the following/
    A. Name and address of the NPO
    B. Mission and objectives,
    C. Details regarding how you are going govern the organisation,
    4. Then registering the organisation. You can register as follows
    A. NGO can be registered as Trust in some states in India. Indian Trusts Act 1882 is meant for Private Trusts,
    B. It Can be registered as a Society under Societies Registration Act of 1860.
    c. It can be registered under the Companies Act.
    5. Funds mobilisation:
    Internal sources like membership fees, sales, subscription charges and Donations. You can also try for a Grant in Aid from the government. Foreign funds. The foreign funds will be governed by the Foreign Contribution Regulation Act (FCRA) 2010.
    All these organizations are eligible to register under section 12A of the Income Tax Act of 1961. Once registered they will get exemption of tax liability for its income.
    6. The above points are mandatory requirements.
    But to run the organisation a wide network is to be made. with other NGOs, government agencies, media and the corporate sector. The strength of partnerships is very important for the success of NPO.

    always confident

  • Non profit organisation is definitely an essential platform reaching out to the people providing them the host of relief. Registration for such an organisation either a charitable trust or meant not for earning profit would vary from state to state as it comes under the preview of the state and hence law related to the state would be applicable.
    However, there is no obligation to register the organisation unless there is an element of raising resources, claim the tax - exemption for the donors. Moreover, every organisation is required to document a trust deed containing the name and address of the organisation, its mission and objective, governing body members, human resources, staffing information, rules and regulations etc.
    Before the registration of the organisation, you will have to define your governing body responsible for the organisation decision, strategy and other financial management of the organisation.
    Application for Registration- Your application has to be submitted to the office of jurisdiction in the area where the organisation would remain operational.
    Application form containing full details of the governing body members, registered trade office address, registration fee and court fee would be required to be incorporated and has to be submitted in the area where it will remain functional.
    Give a wide publicity of your organisation and for that you have to define its objectives with the emphasis of the following points -
    1) What changes you would like to see in the next ten years?
    2) Impact of such an organisation in the society.
    3) Long term sustainability of this organisation.
    4) Your organisational philosophy.
    5) How to reach out to the people providing them the maximum benifits?

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