Changes to India's Foreign Contribution Regulation Act (FCRA) immediately impact Indian charities that receive international donations.
This post was updated on November 1, 2020
On September 29, 2020, the Indian government made changes to its laws that immediately affect charitable grants to India. Give2Asia is tracking this situation closely to ensure that our donors’ grants are in full compliance with the updated laws.
The Indian government amended its Foreign Contribution Regulation Act (FCRA), which regulates the steps that India-based nonprofit must follow in order to receive donations from overseas sources. The new amendment to FCRA puts in place new requirements that must immediately be followed by India-based charities. As Give2Asia is committed to ensuring full compliance with the grants it manages, we are evaluating key parts of this amendment and assessing any impact on our work.
New Rules for Grantees
Some of the critical elements in the amendment that are impacting future grants include:
- Prohibiting any re-granting or sub-granting of foreign contributions within India
- Requiring all India-based nonprofits to open an FCRA account at the State Bank of India in New Delhi to serve as the receiving account for any further donations from overseas donors.
- The Indian government has given a grace period until March 31, 2021 for charitable groups to set up this account.
- In the interim, groups can continue to use existing FCRA accounts until the transition date.
- Reducing from 50% to 20% the annual cap on Administrative costs for all nonprofits receiving foreign funds
- Requiring additional background information on board and key staff members of charitable groups
Give2Asia has put into place new due diligence requirements on all India grantees to ensure alignment with these changes as we make new grant distributions. We continue to work with our legal teams to understand the implications for existing and new grants and adjust our grantmaking practices accordingly.
More information for donors
If you have any questions about how FCRA will affect your existing grants, please contact your Give2Asia account manager. To discuss a new charitable gift to an India-based charity, request a consultation with our international grantmaking team.
- A similar analysis by the Council on Foundations
Photo credit: Laurie Jones