Chartered Accountant · ICAI M.No. 153926 · FRN 136869W · Reviewed on 13 October 2026
What counts as foreign contribution
Money or articles from a foreign source — foreign citizens (including OCI cardholders), foreign companies and foreign institutions. Two points surprise everyone: a donation from an NRI holding an Indian passport is not foreign contribution (citizenship, not residence, is the test), and money that is foreign contribution in the donor’s hands stays foreign contribution when passed on — an FCRA-registered NGO cannot sub-grant it to an unregistered one.
The two lawful gates
Registration needs a track record (normally three years and a minimum spend on the stated objects) and brings the full compliance frame: funds landing only in the designated FCRA account at SBI New Delhi Main Branch, separate books, annual FC-4 returns, caps on administrative spend. Prior permission is the project route for younger NGOs: one donor, a committed amount, a defined purpose — with the same SBI-NDMB account discipline.
Why improvisation is not worth it
Routing foreign money through personal accounts, “consultancy” invoices or a friendly registered NGO is the costliest shortcut in this field: contravention invites penalties, seizure and confiscation of the contribution, cancellation, and prosecution — and amnesty windows for self-correction are rare. If a foreign donor is on the horizon, start the prior-permission file now; crowdfunding platforms with foreign cards raise the same questions. Our trust & NGO practice sets up the compliant route before the first dollar moves.