Acceptance and utilization of foreign contribution and hospitality by associations, whether incorporated or not, is regulated by the Foreign Contribution (Regulation) Act, 1976.
I. Associations Eligible to receive Foreign Contribution For the purpose of acceptance of foreign contribution and hospitality, associations have been divided into three categories, viz.:
(1) Associations registered with the Central Government.
(2) Associations not registered with the Central government.
(3) Organizations of political nature.
Government of India allocates the grants-in-aid for carrying the specific programs as well as for block general purposes. These grants are made out to voluntary organizations are involved in implementing these programs. Grants has been defined as the sum which a superior authority to an inferior authority. For allocation of the financial resources, the Government of India has framed General financial Rules for deciding the right agency. The terms and conditions governing these specific schemes are from the grants-in-aid rules mentioned in these schemes of the various ministries and departments. Some of these rules and conditions are given below:
1.) The organization should be registered under an appropriate Act such as Societies Registration Act, 1860, Charitable Trusts Act, Cooperative Societies Act or under any law in force.
2.) The organization seeking funds should be a recognized and reputed one; its work should be reported satisfactory by the concerned department of the State Government.
3.) It must be a properly constituted broad based Managing/Executive Committee with its powers, duties and responsibilities clearly defined and laid down in a written constitution.
4.) It should have been engaged in social welfare! development activities for a minimum period of 3 years prior to seeking the grant.
5.) The programs and services of the voluntary organizations should be open to all irrespective of caste, creed and religion.
6.) The organizations must be financially sound. It must have facilities, research personnel and experienced staff undertaking activities for which grant is allocated.
7.) It should not be a profit-oriented body benefiting specific individual or a group of individuals.
8.) The grantee organizations must execute a bond, will abide by all the conditions of grant, failing which grant shall be refunded.
9.) Grantee agency must accept the right of grantor to IDs_ the aided agency at any time in order to study its worse and to ensure proper utilization of grants.
10.) Agency should be able to generate its own resource including the contributions from the community.
11.) Grant should not be utilized for purposes other than for which it is sanctioned.
12.) Agencies should have certain methods and proceed relating to budgets, accounting and audit of the sanctioned.
13.) The institutes shall maintain separate accounts; programs for which the grant is received, distinct the accounts of its normal activities.
14.) The payment of grant may be stopped or earlier recovered if the grantor is not satisfied with the utilize of funds for the stated objectives.
15.) The grantee agency should submit the duly audited accounts as and when required.
16.) The grantee organizations should submit the true reports as specified in the relevant scheme.
17.) The grant organizations should maintain an account a bank or a post office in the name of the institutions be operated by at least two office bearers.
18.) The grantee organizations are prohibited from handing over the funds and the implementation program to another organization.
19.) The accounts should be audited by a Chartered Accountant or a government authority within months from the close of the financial year.
20.) NGOs and Grants shall not be allocated already financed by some Government. Unspent balance of the grant close of the year . The agency must guarantee the grants funds shall n alienated, encumbered,. purposes other than those A record of such assets in the form prescribe Government Schemes. There are various Central Governmental Justice and Empowerment.