Giving Compass' Take:

• In India, the Ministry of Corporate Affairs (MCA) published new rules for a corporate social responsibility policy that has an impact on how nonprofit organizations can do their work. 

• How will these new amendments affect or potentially change donor behavior in India?

• Learn why nonprofit organizations in India are experts at scaling up. 

On March 13th, 2020, the Ministry of Corporate Affairs (MCA) published the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. These rules have been made available for public feedback until March 28th, 2020 and the MCA is seeking our inputs on them.

The rules have been drafted to put into action the 2019 amendments made to the Companies Act. You may recall certain changes to Corporate Social Responsibility (CSR) were made during the Finance Minister’s 2019 budget speech; these were later passed in July 2019. The current rules have been drafted to implement these changes and are relevant to CSR-compliant organisations as well as to nonprofits across India.

While a majority of the provisions of the rules apply to CSR-compliant companies, there are a few key implications for nonprofits:

  1. There is no clarity whether trusts and societies will be eligible to receive CSR donations—the rules mention only Section 8 companies and entities established by the Parliament or a state legislature, as being eligible to receive CSR donations.
  2. There are new (and specific) benchmarks for impact assessment that companies will need to undertake, which will require some alignment between donors and nonprofits.
  3. There is a CSR-1 form that all Section 8 companies will have to pay for and fill to be eligible to receive CSR funds. This form will also need to be ratified by a company secretary, chartered accountant, or a cost accountant.

Read the full article about what new CSR amendments mean for nonprofit organizations in India by Antaraa Vasudev at India Development Review.