What Documents Are Required to Get CSR Funding in India?

Corporate Social Responsibility (CSR) funding is a vital source of financial support for Non-Governmental Organizations (NGOs) and social enterprises in India. Under the Companies Act, 2013, companies meeting specific criteria are required to allocate 2% of their net profit to CSR activities. To access this funding, it is essential for NGOs or other eligible organizations to have the proper documents and processes in place.

This article will guide you through the documents required to apply for CSR funding in India, explain their importance, and provide tips to make your application process smooth.

Understanding CSR Funding in India

CSR funding is provided by companies for social development projects, such as education, healthcare, environmental conservation, poverty alleviation, and rural development. Companies that meet the following criteria are required to participate in CSR activities:

1. Net worth of ₹500 crore or more.
2. Turnover of ₹1,000 crore or more.
3. Net profit of ₹5 crore or more.

Eligible organizations can approach these companies with a proposal for CSR funding, backed by the required documentation.

Why Are Documents Important for CSR Funding?

Proper documentation builds credibility, shows compliance with legal requirements, and demonstrates your organization's capability to handle projects. Companies funding CSR initiatives must ensure that the recipient organization is genuine and aligned with their CSR goals. This is why having the right documents is crucial.

Documents Required for CSR Funding

Here is a detailed list of documents required to apply for CSR funding in India:

1. Registration Documents of the Organization

• Trust Deed, Society Registration Certificate, or Section 8 Incorporation Certificate:
• These documents show that your organization is legally registered as a Trust, Society, or Section 8 Company. CSR funding is only provided to legally recognized entities.
• PAN Card of the Organization:
• This is required for tax-related purposes and to validate the legal existence of your organization.

2. 12A and 80G Registration Certificates

• 12A Registration Certificate:
• This document ensures your organization is exempt from paying income tax on its earnings, which is an essential criterion for many companies offering CSR funding.
• 80G Registration Certificate:
• This certificate allows donors to claim tax deductions on their contributions, making your organization more attractive for CSR funding.

3. NGO Darpan ID

• NGOs seeking CSR funding must register on the NGO Darpan Portal, maintained by NITI Aayog. The portal provides a unique ID, which is a mandatory requirement for CSR funding applications.
• This ID improves transparency and enables companies to verify your organization's authenticity.

4. CSR Proposal and Project Report

• A well-prepared CSR Proposal explains the purpose, scope, and impact of the project you wish to execute with CSR funding.
• A detailed Project Report should include:
• Objectives of the project.
• Target beneficiaries.
• Project timelines.
• Budget estimate.
• Expected outcomes.

Companies are more likely to fund organizations with clear, well-structured proposals.

5. Annual Reports and Financial Statements

• Audited Financial Statements:
• Provide audited financial statements for the last 3-5 years. This includes the balance sheet, income statement, and cash flow statement.
• Annual Reports:
• Include annual reports highlighting your organization’s past achievements, ongoing projects, and impact metrics.

These documents establish your organization's financial stability and capability to manage large projects.

6. Bank Account Details

• Companies need your bank account details to transfer CSR funds. The account should preferably be in the name of your organization, registered under your PAN.
• Include a Cancelled Cheque and Bank Statement for verification purposes.

7. Utilization Certificate

• If your organization has received CSR funds in the past, provide a Utilization Certificate to show how the funds were spent.
• This document builds trust and demonstrates accountability.

8. FCRA Registration (if Applicable)

• If your organization plans to receive CSR funding from foreign companies or multinational corporations, Foreign Contribution Regulation Act (FCRA) registration is mandatory.
• This certificate proves your eligibility to receive foreign donations legally.

9. Proof of Work and Impact

• Provide evidence of your organization's past projects, including photographs, videos, case studies, and testimonials from beneficiaries.
• Include metrics like the number of beneficiaries reached, geographical coverage, and measurable outcomes to showcase your organization's impact.

10. MoU or Agreement Template

• Some companies may require a Memorandum of Understanding (MoU) or Agreement Template, outlining the terms of the funding and project execution.
• Prepare a draft MoU in advance to streamline the negotiation process.

11. Compliance and Governance Documents

• Board Resolutions: Resolutions passed by your organization’s board of directors approving the project and application for CSR funding.
• Policy Documents: Include your organization’s policies on anti-corruption, child protection, and environmental sustainability, if applicable.

12. Certificate of Work Completion (for Ongoing Projects)

• If you are applying for funding to expand an existing project, provide a Certificate of Completion for the project’s completed phases.

How to Organize Your Documents for CSR Funding

To ensure your CSR funding application is effective, organize your documents as follows:

1. Create a Checklist: List all required documents and ensure you have updated versions of each.
2. Use Clear Labels: Label each document to make it easy for companies to review your submission.
3. Digital and Physical Copies: Keep both hard and soft copies of your documents. Many companies prefer digital submissions.
4. Update Regularly: Ensure that certificates, registrations, and financial statements are updated annually.

Additional Tips for Securing CSR Funding

1. Understand the Company’s CSR Policy: Before applying, research the company’s CSR goals and focus areas to ensure your project aligns with their objectives.
2. Customize Proposals: Tailor your CSR proposal to the company’s specific requirements and guidelines.
3. Build Relationships: Establish good relationships with CSR officers and stakeholders. Networking plays a significant role in securing funding.
4. Show Transparency: Be open about your organization’s processes, spending, and impact. Transparency builds trust.

Challenges in Securing CSR Funding

While CSR funding is a significant opportunity, organizations may face challenges such as:

1. Stringent Documentation: Companies may require a comprehensive set of documents, which can be overwhelming for small NGOs.
2. Competition: Many organizations compete for the same CSR funds, making it essential to have a strong proposal and credibility.
3. Alignment with CSR Policy: Companies fund projects aligned with their CSR focus areas, which may not always match your organization’s objectives.

Conclusion

CSR funding is a valuable resource for NGOs and social enterprises working toward social development in India. However, to secure funding, organizations must ensure their documentation is complete, accurate, and up-to-date. Key documents like the registration certificate, 12A and 80G certifications, NGO Darpan ID, financial reports, and project proposals are essential to demonstrate credibility and compliance.

By preparing these documents in advance and tailoring your approach to the company’s CSR policies, you can increase your chances of successfully securing CSR funding. Focus on transparency, clear communication, and measurable impact to build trust and long-term relationships with corporate donors.

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