Foreign funds for operational expenses

FCRA & FCRR
1

Hi everyone,

We’re an ngo that receives foreign funding. A big chunk of this money is meant for a specific project. Now because of some unforeseen delays, we’ve got some of this foreign money sitting in our FCRA account. The project has been stalled since a few months.

But now we have other urgent operational expenses that have come up, like paying our staff salaries and utilities. Our local funds are running low.

My question is.. Can we use a small portion of this foreign money from the FCRA account to cover these urgent, non-project-related expenses? If we can’t then what are our options for managing this situation legally?

Thanks in advance for your help!

2

Thanks for your query. Using FC funds for meeting non-FC expenses should be ruled out. So if local expenses (non FC) are to be incurred, short term borrowings maybe resorted to instead.

CS Sharad Bhargava

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3

In case of FCRA project we have to be mindful of the purpose. Also, if you want to use the funds for non project related expenses, one, the purpose for which the funds have been received is defeated and two, the donor approval is mandatory which may not come through in any case.

Borrowings is an option if the NGO is confident of repayment.

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