1. Clear cause and objective:
Most imperative is a clarity about the cause one wishes to work for. A clear vision, derived from what one is passionate about. A non-commercial; charitable or philanthropic endeavour. Registering a non-for-profit organization as either a Trust, Society or Section 8 company then becomes the basic next step. Eventually, clarity brings coherence in the focus of effort expended and actions to take/not to take as the organization grows successfully. If the purpose is clear, then every obstacle can be overcome.
2. Dependable associates and allies:
Selection of the people one collaborates with for the founding structure of the organization is critical. These people should be unwavering allies, willing to be open to scrutiny by tax authorities, government departments like MHA, Intelligence Bureau and sharing personal as well as financial details to multiple stakeholders. At the same time, they should be able to advise in a critical yet supportive manner and spare time to attend meetings. It needs a commitment for at a minimum of 4 -5 years (required to attain all essential registrations and approvals). Ideally, not immediate family members or politically engaged persons (PEPs) and preferably living in close range, to ease the process of verifications.
3. A concrete plan of activities & finances:
A definitive plan, initially, is vital. The reality is that people contribute to impactful endeavours. While initial resources for one’s efforts will come from self, friends and family, the public will contribute to activities that have a tangible and visible impact. Also, tax exemption approvals and 2-3 years track record are needed to get substantial donations from individuals and corporates. So, having a structure of activities that score both on immediate impact and limited financials is important to gain primary momentum.
4. Documentation:
Commencing from the first activity of the non-profit, methodical documentation should be maintained. Date stamped pictures, cataloguing of all reports, having all expenditures plans discussed and approved by the board, expenses vouchers/invoices with payment proofs signed, receipt issuance within 24 hours for all donations assures the public of the longevity of the organization’s work. A current updated website, social media posts and articles are a source of online documentation as well.
5. Financial & Compliances know-how:
A basic knowledge of finances and easy to learn accounting is a must. Categories of funding, types of accounts to be opened and operated, basic compliances, proof of monetary transactions, financial records, Income Tax applicability etc. should be understood. Do not get mislead by the “imposter syndrome” as there are many experts in this field. Such fundamental concepts are straightforward and easy to comprehend. This helps prevent any subsequent complications as organisation grows.
6. Registered Address /Place of operation
Setting up a suitable address for commercial activities, preferably one that remains unchanged, is crucial. As rental properties require many tangled compliances, starting the work at any permanent address, even a friend’s is more desirable. A small office with a legitimate board of the organization’s name must be established. This is helpful with getting your bank account opening, payment gateway etc.
7. Prepare for foreign donations
One should surely aspire towards gaining foreign contributions. When collected legitimately and utilized with transparency, foreign contributions can greatly assist a non-profit as foreign donors are easier to convince and many favours supporting smaller charities. This is exhibited by the fact that over the last 4 years, Rs. 51,000 Cr have been received by non-profits in the country as foreign donation. However, it takes a minimum 3 completed years with over Rs. 15 lac spend in charitable activities plus many other requirements to be eligible. Preparing for it from Day 1 makes it a lot easier.
There will be obstacles that are not anticipated; however, one is able to overcome all obstacles due to the commitment one has to the cause and purpose of why one started. No obstacle is bigger than the purpose has guided us in this journey.
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