Business & Industry - Types of NGO's - Trusts - Societies - Characteristics & Benefits of NGO's - Misconceptions

1. BUSINESS AND INDUSTRY
TOPIC - NON-PROFIT
ORGANISATION

2. DEFINITION
• A nonprofit organization is a business that has been granted tax-exempt
status by the government because it is dedicated to a social cause and
provides a public benefit.
 Donations made to a nonprofit organization are typically tax-deductible
to individuals and businesses.
Examples :-
 Charitable institution (trusts)
 Educational institution
 Religious institutions

3. ARTICLES OF THE REPUBLIC OF
INDIA RELEVANT TO THE NPO’S
 Articles 19(1)(c) and 30 of the Constitution of India
 Income Tax Act, 1961
 Public Trusts Acts of various states
 Societies Registration Act, 1860
 Section 25 of the Indian Companies Act, 1956 (Section 8 as per the new
Companies Act, 2013)
 Foreign Contribution (Regulation) Act, 1976.

4. TYPES OF NPO’S
MAJOR
 MEMBERSHIP - A membership organization elects the board and has regular
meetings and the power to amend the bylaws.
 BOARD ONLY - A board-only organization typically has a self-selected board and a
membership whose powers are limited to those delegated to it by the board.
MINOR
 TRUSTS
 SOCITIES
 SECTION 8 CO.

5. TRUSTS
• Public charitable trusts may be established for a number of
purposes, including poverty relief, education, or medical relief.
• PARTIES - Trustor, trustee and beneficiary.
• OBJECTIVE - General public utility.

6. SOCIETIES
• Societies are membership organizations that may be registered
for charitable purposes. They are usually managed by a
governing council or a managing committee and are regulated
by the Societies Registration Act which has been adopted by
various states. Unlike trusts, societies may be dissolved.

7. SECTION 8 CO.
 Has in its objects the promotion of commerce, art, science,
sports, education, research, social welfare, religion, charity, or
any such other things.
 Intends to apply its profits, if any, or other income in
promoting its objects.
 Intends to prohibit the payment of any dividend to its members

8. CHARACTERISTICS OF NPO’S
 PURPOSE - Enriching people lives, tax benefit, legal status.
 OWNERSHIP - No owners, BOD (trustees)
 CONTROL – Management structure.
 ACCOUNTABILITY – Governance, policies, internal controls.
 PUBLIC TRUST – Dependable on the sources of fund.
 TAX STATUSES OF CORPORATE AND PRIVATE DONORS
 TAX STATUS OF THE FOUNDERS.

9. BENEFITS OF NPO’S
• Separate entity status
• Limited liability protection
• Tax-exempt status
• Access to grants
• Tax-deductible donations.
• Possible state sales and property taxes exemption

10. HOW NPO’S WORK?
 Not affiliated with any governmental entities.
 NPO’S funnels their earnings back into their organization's
efforts.
 Profits made by an NPO cannot be returned to investors.

11. MANAGEMENT
 Nonprofits have staff that work for the company, using
volunteers to perform the nonprofit's services under the
direction of the paid staff.
 Requires a donor marketing strategy, something many
nonprofits lack.

12. MISCONCEPTIONS
 COMPLETEYLY RUN BY VOLUNTEERS - Paid full fledged staff
is their in order to monitor the volunteers.
 NPO MAY NOT MAKE A PROFIT - Although the goal of
nonprofits isn't specifically to maximize profits, they still have to
operate as a fiscally responsible business. They must manage their
income and expenses so as to remain a fiscally viable entity.

13. EXAMPLES
• ANIMAL BASED
I. People for Animals (1992)
II. People for Cattle in India (2012)
• CHILDREN BASED
I. Educate Girls (2007)
II. BHUMI (2006)

14. CONCLUSION
NPO serve the public by providing a wide variety of
services to improve the quality of life of individual’s and
communities. They are heavily staffed by volunteers or
temporary workers with diverse skills set who are
strongly motivated

15. THANK YOU FOR
YOUR TIME