{"id":66658,"date":"2020-10-16T15:39:23","date_gmt":"2020-10-16T10:09:23","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=66658"},"modified":"2020-10-16T17:12:14","modified_gmt":"2020-10-16T11:42:14","slug":"new-fcra-norms-might-result-in-fund-crunch-for-philanthropy-and-csr","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/new-fcra-norms-might-result-in-fund-crunch-for-philanthropy-and-csr\/","title":{"rendered":"New FCRA Norms might result in fund crunch for philanthropy and CSR"},"content":{"rendered":"<p><strong>Source:<\/strong> <a href=\"https:\/\/www.livemint.com\/news\/india\/civil-society-gears-up-for-big-funds-squeeze-11602685319857.html\"><strong>Live Mint<\/strong><\/a><\/p>\n<blockquote><p><strong>Syllabus: GS2:<\/strong> <strong>Development Processes and the Development Industry \u2014 the Role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.<\/strong><\/p><\/blockquote>\n<p><strong>Context: <\/strong>New norms on foreign donations and covid-19 could end up shrinking the money pool for philanthropy and CSR.<\/p>\n<p><strong>What are the changes over the years?<\/strong><\/p>\n<ul>\n<li>The Foreign Contribution Regulation Act (FCRA) Act was first brought in by the Indira Gandhi government during the Emergency in 1976.<\/li>\n<li>Its aim was to protect the \u2018sovereignty\u2019 of India from \u2018foreign hands\u2019 at a time when global powers were engaged in a cold war.<\/li>\n<li>The law prohibited political parties, electoral candidates and even cartoonists from accepting foreign contributions.<\/li>\n<li>In 2010, government made the renewal of registrations mandatory every five years and placed a 50% limit on administrative expenses.<\/li>\n<\/ul>\n<p><strong>What the Key changes in FCRA, 2010? <\/strong><\/p>\n<ul>\n<li><strong>Prohibition to accept foreign contribution<\/strong>: These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties.<\/li>\n<li><strong>Transfer of foreign contribution:<\/strong>\n<ul>\n<li>Under the Act, foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution.<\/li>\n<li>FCRA registered organisations are barred from transferring foreign donations to smaller non-profits (a practice known as sub-granting) who often find it difficult to access donors on their own.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Aadhaar for registration<\/strong>: The Act states that a person may accept foreign contribution if they have obtained a certificate of registration from central government or obtained prior permission from the government to accept foreign contribution. The bill makes Aadhaar mandatory for registration.<\/li>\n<li><strong>Restriction in utilisation of foreign contribution<\/strong>: The Bill gives government powers to stop utilisation of foreign funds by an organisation through a \u201csummary enquiry\u201d.<\/li>\n<li><strong>Reduction in use of foreign contribution for administrative purposes<\/strong>: The bill decreases administrative expenses through foreign funds by an organisation to 20% from 50% earlier.<\/li>\n<li><strong>More power to government<\/strong>: FCRA registration can be suspended now after a summary enquiry and the period of suspension can extend up to a year (from 180 days earlier).<\/li>\n<\/ul>\n<p><strong>What are the various concerns associated with the amendments?<\/strong><\/p>\n<ul>\n<li><strong>Reduce the availability of funds:<\/strong> The crunch is also because a chunk of the corporate social responsibility (CSR) funds which NGOs depend on went to the PM-Cares fund.<\/li>\n<li><strong>Reduce the number of philanthropic initiatives<\/strong>: Civil society organisations will be overburdened as they are already affected by COVID-19. For Example, cancellation of FCRA registration (in 2015) forced the environmental rights watchdog Greenpeace to halt its India operations<\/li>\n<li><strong>Affect COVID-19 relief activities<\/strong>: the FCRA amendments could squeeze the once-vibrant not-for-profit sector of funds.<\/li>\n<li><strong>Reduce accountability:<\/strong> the changes will push NGOs to become mere government contractors rather than raise questions on policy matters or defend the rights of tribal communities<\/li>\n<li><strong>Reduce political empowerment of people<\/strong>: The FCRA amendments will halt the emergence of local leadership from marginalised communities. For example, crowdfunding platforms like <strong>Our Democracy<\/strong> have raised funds for committed individuals helping them contest elections.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: Live Mint Syllabus: GS2: Development Processes and the Development Industry \u2014 the Role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders. Context: New norms on foreign donations and covid-19 could end up shrinking the money pool for philanthropy and CSR. What are the changes over the years? The Foreign&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/new-fcra-norms-might-result-in-fund-crunch-for-philanthropy-and-csr\/\">Continue reading <span class=\"screen-reader-text\">New FCRA Norms might result in fund crunch for philanthropy and CSR<\/span><\/a><\/p>\n","protected":false},"author":10308,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1244,162],"tags":[1245,1246],"class_list":["post-66658","post","type-post","status-publish","format-standard","hentry","category-internal-security","category-polity-governance","tag-po_02","tag-sec_01","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704212158},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/66658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10308"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=66658"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/66658\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=66658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=66658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=66658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}