What You Should Know Before Donating to an NGO in India? | Narayan Seva Sansthan
Donating To Ngo In India
What You Should Know Before Donating to an NGO in India?
  11 Jun'2021

Nothing else in life brings as much joy and happiness as the opportunity to do good. Engaging in such kind acts is always admirable. It is a means to fulfil our social conscience by expressing compassion and goodwill to the less fortunate members of society. Now, while it is good to donate to a worthy cause, we are often prone to hysteria and rush of doing it. Instead, take a moment to thoroughly research the NGO/nonprofit organization you intend to donate to, and learn more about the charitable work it is doing.

Making a donation is one of the simplest ways to support a charitable cause. It doesn't have to be much; you can easily donate the money you'd spend on a cup of coffee and a sandwich at a cafe, a movie, or the latest fashion accessory.

Is every donation, however, the same? Is the net outcome of every rupee donated the same? And, if you donate with the intention of receiving a tax rebate in addition to donating to charity, would you automatically receive a tax rebate when tax season arrives? Here are some key details on questions you've probably never considered asking.

1. Be cautious if you make donations for tax purposes.

The term "charity" refers to any organisation that works for the greater good, but you must verify whether your charity is registered with the Indian government and qualifies for tax exemption. Donations to charity organisations are eligible for tax rebates under Section 80G of the Income Tax Act, which can be claimed while filing the ITR (Income Tax Return).

Here's how an NGO qualifies for tax benefits of donating to charity, in addition to official registration (Societies Registration Act 1860, a related statute) or under section 25 of the Companies Act 1956:

  • They shouldn't have any non-exempt sources of income, such as business income.
  • If the NGO's aims or bylaws do not mention spending money or assets to support charities or humanitarian purposes, they are in violation.
  • They should not spend in a way that benefits a particular religious group or caste.
  • In addition, the NGO must keep track of its revenue and expenses.

Tax deductions are only available for cash or check donations. Further, when you donate to an NGO in India, not all donations are eligible for a full tax deduction.

2. Ensure that your donations allow you to assist a non-profit organisation.

Think twice before giving money to someone who appears suspicious or unscrupulous in public settings. As a matter of fact, do your due diligence to ensure they're from a reputable charity with a track record of success. The same is true for fundraising in malls and public locations which is done by subcontracted organisations that specialise in NGOs' fundraising. They operate on commission-based sales models, and their wages are paid from your pocket. If you believe in their purpose and integrity, instead of giving them your direct debit information, go home and donate directly to that NGO in India.

3. Monitor for accountability and transparency

Good NGOs have no concerns communicating in-depth about their administration and have personnel on board to audit for thorough analysis. They are also subject to public review in any way. As a mark of authenticity, a large portion of this information should be included in an NGO's annual report. You should also keep an eye out for scammers. There is no shortage of charity-related frauds. Examine an entity’s website, social media presence, active campaigns, contact information, on-the-ground activity, financial information, tax status, and other pertinent elements before deciding which NGO to donate to. By all means, steer clear of the con artists.

4. Also, keep an eye out for recommendations from friends and family.

A charity's social media pages will feature a lot of third-party support and activities to indicate engagement from people, groups, and organisations, so you don't need a personal referral. On their websites and annual reports, significant nonprofit organisations proudly display their list of major supporters, which includes people, foundations, and companies.

5. Look for non-profit status in addition to tax benefits.

There are many NGOs in India to donate to that promote social good. Many of these groups utilise grassroots-level understanding and ground-level initiatives to fight for social change. However, you must be clear about your charity priorities: always contribute to non-profit organisations where the sole focus is on social good.

6. Is it possible to make a secure payment?

The procedure for making a donation to a non-profit organisation is crucial. After all, as a donor, you want to ensure that the majority of your donation reaches the intended NGO and towards the social cause you’ve chosen.

It is often safer to avoid making a cash gift and instead use alternative methods such as cheques or, better yet, online payments. For instance, we, at Narayan Seva Sansthan, accept online payments over an SSL channel which ensures our donors' security and privacy. Keep this as an important prerequisite while looking at donation sites in India.

Finally, you may consider contributing in ways other than money, such as becoming engaged by volunteering your time and talents.

Narayan Seva Sansthan is widely regarded as India's top charity organisation, and works for several causes, like offering free treatments and surgeries, skill development, mass wedding ceremonies, and other services to physically disabled people has transformed the lives of millions.

Help do social good and make sure you do it right.

You may also like this tax deductible donation

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