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CS Professional · CSR and Social Governance · Contribution of Non-Corporate Entities in Social Governance

Vikas Dhara Trust, an FCRA-registered NGO, received a foreign contribution and wishes to pass part of it to another unregistered local NGO for field work. Which statement reflects the correct position?

Passing foreign contribution to an unregistered NGO is generally restricted under FCRA, and free sub-granting is not allowed. Neither a trust deed clause, a small amount nor the recipient's promise of charitable use can override the statutory restriction.

  1. ATransfer of foreign contribution to an unregistered person is generally restricted and sub-granting is not freely permittedCorrect
  2. BThe transfer is freely allowed if the amount is under ten lakh rupees
  3. CThe transfer is allowed if the recipient promises to use it for charity
  4. DTransfer is allowed if the trust deed has a clause permitting it

Explanation

FCRA restricts onward transfer of foreign contribution to other persons, and the earlier sub-granting route has been closed, so a trust-deed clause or the recipient's promise cannot override the statute. There is no ten lakh safe limit. The transfer described is therefore not freely permitted.

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