How to establish an NGO

From the time a non-governmental organization (NGO) is actually set up, it usually takes about a year before its programs actually benefit the target groups

According to the United Nations, the practical elements of an NGO must encompass the fact that it is non-profit, non-commercial, non-government, legally registered and subscribing to universal humanitarian values and practices. Fundamentally though, there are two critical things an NGO must have. The first being capacity—it has a plan and the resources to carry it out. The second is that it is ready to be held accountable for its actions

- Define passion and goals

Before setting up your NGO, choose an issue that is important or something that is a matter of public interest. Such issues may include arts, charities, education, politics, religion, research or some other non-commercial endeavor.

According to a working paper on How to Start an NGO by Joanna Moshman, the founder must have a clear and concise written statement that describes the charitable mission of the NGO and why it exists.

The target community too must be clearly identified and the reasons for it should be analysed.

It is a good idea to test the waters by volunteering or working with an NGO that works for a similar cause. This would not only help in getting practical experience, but also create clarity—whether the idea of starting up is a long-term vision or not.

- Do the groundwork

The next step would be to think about how to gather funds, resources, set up a team and other infrastructure needs. 
To start with, one needs to determine feasibility by taking into consideration the economic climate and funding needs of the organization.

A detailed business plan must be prepared that encompasses the mission, structure, values, budget, resources and other requirements of the organization. The founder must recruit the initial board of directors who have strong legal, financial and technological skills and who are aware of their responsibilities in the public interest.

The first board is the foundation of the NGO and it is always helpful to start with a small group of committed individuals. The size and structure of the board as well as the people who make it up, may change based on the size and scale of the NGO.

- Legal expertise and documentation

There are always a lot of legal issues that have to be tackled while starting an NGO which essentially revolve around registration, filing of articles of incorporation, tax exemption rules and other issues. It always helps to hire a professional who can look into these issues. If money is a problem, it may be possible to see if board members have any connections, contacts or friends who may offer free advice on the matter.

Before registering an NGO, it is important to choose a name. It is essential to check up with local government agencies and offices to make sure that the proposed name and logo are not already being used in the country. In India, an NGO is registered under the Indian Trusts Act, Societies Registration Act and the Companies Act.

Every NGO in India is legally required to document a trust deed/ Memorandum of Understanding/byelaws that contain the name and address of the NGO, mission and objectives, details of governing body members, staffing information, rules and regulations, administrative laws and procedures.

- Getting funds

An NGO can raise funds through foundations, corporations, businesses that have staff working in community relations or public relations departments and lastly individuals and religious groups. An NGO can also make use of internal sources (membership fees, sales, subscription charges, donations, etc.) or grants approved by the government, private organizations or foreign sources.

The Foreign Contribution Regulation Act (FCRA) 1976 governs the inflow of foreign funds in the country. A large number of NGOs are eligible for tax exemptions. These must be applied for and their status followed up on regularly. Once the grants are in place, NGOS need to put in a system for recording and documenting inflows and outflows in financial journals which must be audited at the end of the financial year. It is important to put an effective accounting system into place to deal with the bookkeeping and accounts as NGOs finances tend to be closely scrutinized by the funding agencies.

- Other aspects

It is essential to build a wide professional network with other NGOs, government agencies, media and the corporate sector. In addition to these, a few miscellaneous tasks must be completed like the hiring of staff, informing the community of the presence of the NGO etc.

Activities with regard to programs can be discussed and implemented after the financial and physical infrastructure is in place.

It is always important to ensure that the qualitative impact of the programs is assessed at regular intervals. Also, annual, quarterly reports along with newsletters must be sent out to all funding agencies. This is important as it helps in funds generation.