Tamil Nadu second in non-compliance of filing tax returns

Recently, the Ministry of Home Affairs (MHA) cancelled the registration of > Greenpeace under the Foreign Contribution Regulation Act (FCRA), leading to a debate on funding of non-governmental organisations (NGOs).

For many NGOs in the city, the FCRA, combined with drying up of local funding, has meant that many projects have to be cancelled.

While they say that registration for the FCRA was easy a few years ago, it has now become a lot more stringent. “Often, the larger NGOs do not face a problem when it comes to funding, but smaller ones have an issue,” says V. Nagarani from HOPE Public Charitable Trust. The organisation received their FCRA certification five years ago, but not much funding has come in from foreign sources, she adds.

There are several NGOs that exist only on paper. “These have given others too a bad name and so the funding has dried up for many sectors,” she points out, adding that only around 10 per cent of their funding comes through government schemes. They rely on the goodwill of people and philanthropists for the rest.

Other NGOs that registered for FCRA over a decade ago too say very little foreign funding comes in now. According to V. Vedanayagam, who runs Greater Love Children Home in Ayanavaram, registered for the FCRA in 2003. “In the past two years, although I have not got much money from foreign funding, I have had to submit annual returns on the account. Initially, there was a lot more funding coming in to the State, but now this seems to have dried up,” he says.

Virgil D’ Sami, executive director of Arunodhaya, too agrees. “In general, since the social indicators in Tamil Nadu are high, international agencies tend to concentrate on other States such as Bihar,” she says. Her organisation registered for FCRA in 2000, and needs to renew it now.

“Recently, a number of organisations, including People’s Watch, had their FCRA registration suspended for halting development activities. Some organisations did not update their addresses while others had not filed tax returns,” she said, adding that most of her funding came from the government, and some from organisations such as Childline.

“We have a few regular funders from abroad, including Action Aid, but these projects are ending soon, and we will have to find new agencies for our projects,” she said. According to Sudha Ramalingam, who runs an old-age home at Perungulathur through Manonmani Trust, funding, especially for organisations dealing with the elderly, is a problem.

“Although we have registered for FCRA recently, we have received less than $2,000 and even that is only from people we know,” she says. Currently their home has around 15 people, but they are looking to expand.

“All our funding has come from friends and people who know us, and it has been difficult to raise funds for even small projects,” she says. Her organisation even tried crowdfunding, but it was not very successful. “Eventually, I asked people I know to fund our campaign through a crowdfunding site, which I could have done even otherwise,” she said.

According to a senior chartered accountant, however, many NGOs did not file their returns on time. “Tamil Nadu has the second highest number of NGOs that have not filed their returns, next only to Andhra Pradesh. Many organisations only focus on their social cause, and do very little to ensure that their papers are in order,” he said.