Generally speaking, donating to charity is a way to contribute to causes that are bigger than us. For many people, the act of giving is deeply personal. That said, living in the USA, you may indeed be emotionally invested in the causes you give to and in the charities you entrust with your dollars to carry out work that impacts the lives of people.
While the process to donate money to a charity in India can look a little complex, it has been streamlined in the recent past.
There are many charities doing exemplary work in supporting the lesser privileged in India. They have been doing remarkable work in helping improve education, nutrition, heath and sanitation. Expected to become the world’s most populous country around 2027, according to the United Nations, India is home to almost 1.4 billion people and while the country has made great advancement in the past decade, it is estimated that roughly about 53.5 million Indians continue to live in poverty. A large majority of the NGOs operating in the country are working to reduce extreme poverty and address its impact on health and wellbeing, access to education, social discrimination, exclusion, and more. India’s robust NGO sector, combined with the presence of a thriving Indian diaspora community in the USA are a driving force behind cross-border giving to India. The process to donate money to charity in India has been regulated recently.
While US donors may not give directly to NGOs located in India and receive a tax deduction in the United States, there are some options where they can donate money to charity in India and at the same time avail of tax benefits. Donors can : (1)Donate to a US-based non-profit organisation which has programs in India
(2) Donate to a “friends of” organization which supports an Indian NGO, or
(3) use an intermediary grant maker (like CAF America & GIVE India) and avail of direct tax benefits in their country.
With regards to cross-border giving, donors must in general, be aware of both the US rules and regulations as well as the laws of the recipients’ country. Complete regulatory compliance is needed to ensure that the outbound transfer of funds is possible and to enable the foreign non-profit organisation to access the funding in their country without inadvertently threatening the NGO’s legal standing.
Understanding the Indian Context
India’s law that regulates the flow of foreign funding into the country is known as the Foreign Contribution Regulation Act (FCRA). It is mandatory that NGOs of India must have a valid FCRA Registration or receive prior approval from the Ministry of Home Affairs to be able to legally receive charitable funds from donors outside of India.
Some major points to remember here are:
- Donors in the United States may not give directly to NGOs located in India and receive a tax deduction in the United States.
- By giving through a 501(c)(3) public charity, like CAF America & GIVE India, US donors can make tax effective donations to any validated foreign charitable organization and receive tax benefits
- The Foreign Contribution Regulation Act (FCRA) is the Indian law that regulates the flow of foreign funding into the country. Indian NGOs must have a valid FCRA Registration to be able to legally receive charitable funds from donors outside of India.
- As of 28th September 2020—when India’s Foreign Contribution (Regulation) Amendment Act 2020 was signed into law—US grantors may no longer rely on Indian intermediary organizations to further distribute foreign funds to other local NGOs.
- As per the 2020 FCRA amendment, FCRA Accounts have to be opened at the State Bank of India, New Delhi Main Branch (with a grace period through 30th June 2022), and Indian NGOs have to comply with a number of other new requirements.
- Giving to a non-FCRA compliant Indian NGO or to a non-FCRA account is a legal risk for the recipient organization and reputational risk for the donor.
Thus, it is that you will need to be a little knowledgeable about the correct ways and means to be able to donate to charity in India. There are many trustworthy organisations working to make a real difference on the ground. A lot of work is being done in particular to support the medical illness of children such as cancer and Congenital Heart Defects. The organisations working with these children are duly registered and all have FCRA certifications. One such Heart Foundation in India is Genesis Foundation.. It may be of interest to you to know that there are very few non-profit organizations in the healthcare sector in India that are saving critically ill children, who have been diagnosed with a critical ailment like a Congenital Heart Defect. Gurgaon-based Genesis Foundation is one such Heart Foundation in India. A donation for child surgery here reaches the most vulnerable section of our society – viz., our children. While you are on this blog page, what we can tell you for certain is that as one of the frontline non-profit organisations working for children who are diagnosed with a Congenital Heart Defect, Genesis Foundation (GF) is duly registered under FCRA allowing us to receive foreign contribution. Through GIVE India, the Foundation also accepts International donations providing tax-exemption for US & UK residents. When one partners with this Heart Foundation in India and donates towards heart disorder, it helps to fulfil a very significant need for quality medical care in this country. GF staff and volunteers are committed to hand-hold each one of its kids and his/her family through the process of treatment.
We are all human and one by one, we want to make a difference to each family’s lifes who struggle with treatment for this disease. Genesis Foundation puts great emphasis in maintaining high levels of transparency in all our processes. To know more about them, you may visit the official website https://www.genesis-foundation.net/
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