A lot of people have been asking why Isha Foundation is a non-profit organization but is collecting money for its programs. Many of them are asking this question genuinely and of course some of them with malicious intent. What most of them are not understanding is the very definition of a NPO.
Refer this Wikipedia link: https://en.wikipedia.org/wiki/Nonprofit_organization
"A nonprofit organization (NPO), also known as a non-business entity or nonprofit institution, is dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization that uses its surplus of the revenues to further achieve its ultimate objective, rather than distributing its income to the organization's shareholders, leaders, or members. Nonprofits are tax exempt or charitable, meaning they do not pay income tax on the money that they receive for their organization. They can operate in religious, scientific, research, or educational settings.
The key aspects of nonprofits are accountability, trustworthiness, honesty, and openness to every person who has invested time, money, and faith into the organization. Nonprofit organizations are accountable to the donors, funders, volunteers, program recipients, and the public community. Public confidence is a factor in the amount of money that a nonprofit organization is able to raise. The more nonprofits focus on their mission, the more public confidence they will have, and as a result, more money for the organization. The activities a nonprofit is partaking in can help build the public’s confidence in nonprofits, as well as how ethical the standards and practices are."
It is very important for everyone to understand the nuances of these. So, let's look at the different aspects of this first.
(1) Mode of raising money
A common misconception is that nonprofit organizations 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 (both grants and donations and income from services) and expenses so as to remain a fiscally viable entity. Nonprofits have the responsibility of focusing on being professional, financially responsible, replacing self-interest and profit motive with mission motive.
The Wikipedia link also says this: "Nonprofits are not driven by generating profit, but they must produce enough income to pursue their social duties. Nonprofits are able to raise money in different ways. This includes income from donations from individual donors or foundations, sponsorships from corporations, income from government funding, income from programs, services or merchandise sales, and income from investments."
So, this very point clearly validates the approaches used by the Isha Foundation for raising money - through several of its programs, volunteer donations, merchandise sales, etc. What they do with that money, they definitely are accountable to the Government.
Of course, only those who are interested donate into it! To give a close analogy from the software world, Open-source software does not mean Free software!
(2) Dedicated to further a particular social cause
Isha Foundation dedicates itself to the main cause of raising human consciousness through its spiritual program offerings. But they have also been running massive-scale social projects:
- Action For Rural Rejuvenation
- Project GreenHands
- Isha Vidhya, etc.
Each of these projects, though operating with minimal resources, have had a tremendous impact in the society.
I have covered some of these aspects already:
What Isha Foundation has done for farmers, especially in the rural areas: http://kazhugupaarvai.blogspot.com/search/label/farmers
What Isha Foundation has done in terms of education (only one part of it though): http://kazhugupaarvai.blogspot.com/search/label/Education
What Isha Foundation has done in terms of tree plantation: http://kazhugupaarvai.blogspot.com/2017/03/isha-project-green-hands-scam-or.html
What Isha Foundation has done for Rural population in general: https://en.wikipedia.org/wiki/Action_for_Rural_Rejuvenation
A tremendous amount of work has been put in by the Foundation. Some of the praise-worthy initiatives are:
- Operating mobile health clinics reaching over 2.2 million rural people
- Rural health clinics treating on an average 60+ patients each day
- Health awareness campaigns conducted through the state
- Disaster relief measures for Cuddalore Tsunami region, Chennai floods, Kerala floods, etc.
- Livelihood generation programs for rural people
- Isha Gramotsavam to restore dying village arts & sports in Tamilnadu and Andhra Pradesh
- More than 3 million saplings distributed, planted and tracked
- More than 35 nurseries across Tamilnadu and Pondicherry
- Dozens of Free Organic farming training sessions for farmers in Tamilnadu
- Thousands of schools engaged in tree plantation and nurturing
- 8000+ students provided scholarship education in rural Tamilnadu and Andhra Pradesh
- Training 1000s of teachers in Government schools for providing better education
- Free yoga classes in rural areas
- Free housing in the villages surrounding Isha Yoga Center in Coimbatore, etc.
No mainstream media usually publishes these, but that is the massive scale of work being silently done by this organization (one of the reasons why I admire it).
No wonder, they have a special consultative status with the United Nations Economic and Social Council in these areas and have won several state & central awards, under different governments / political party rules.
(3) Tax exempt
The NPOs are generally tax exempt and that means anybody who is donating money to these organizations will be given a tax exemption certificate that can be used for claiming Income Tax exemptions (upto 50% or 100% depending on the organization).
It also does not mean that the Non-Profit Organization is itself exempt from Income Tax Audits. That directly leads to #4.
(4) Accountability and Ethics
Any and all NPOs are subject at any point of time to Income Tax Audits. That is one of the critical means adopted by the Governments to keep a tab on the ethical accountability of the NPO.
Just because an organization has earned the Non-Profit status once does not mean, it can do any nonsense and continue retaining that status.
The following laws or Constitutional Articles of the Republic of India are relevant to the NGOs / NPOs:
Hope this post clarifies what is applicable and what is not, as far as the Non-profit Organization status of the Isha Foundation is concerned. And in any case, it is the Government of India that had recognized the Isha Foundation as a NPO based on a thorough verification all the credentials supplied, decades ago! It is not easy for any and all to apply for such a status and get it.
Refer this Wikipedia link: https://en.wikipedia.org/wiki/Nonprofit_organization
"A nonprofit organization (NPO), also known as a non-business entity or nonprofit institution, is dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization that uses its surplus of the revenues to further achieve its ultimate objective, rather than distributing its income to the organization's shareholders, leaders, or members. Nonprofits are tax exempt or charitable, meaning they do not pay income tax on the money that they receive for their organization. They can operate in religious, scientific, research, or educational settings.
The key aspects of nonprofits are accountability, trustworthiness, honesty, and openness to every person who has invested time, money, and faith into the organization. Nonprofit organizations are accountable to the donors, funders, volunteers, program recipients, and the public community. Public confidence is a factor in the amount of money that a nonprofit organization is able to raise. The more nonprofits focus on their mission, the more public confidence they will have, and as a result, more money for the organization. The activities a nonprofit is partaking in can help build the public’s confidence in nonprofits, as well as how ethical the standards and practices are."
It is very important for everyone to understand the nuances of these. So, let's look at the different aspects of this first.
(1) Mode of raising money
A common misconception is that nonprofit organizations 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 (both grants and donations and income from services) and expenses so as to remain a fiscally viable entity. Nonprofits have the responsibility of focusing on being professional, financially responsible, replacing self-interest and profit motive with mission motive.
The Wikipedia link also says this: "Nonprofits are not driven by generating profit, but they must produce enough income to pursue their social duties. Nonprofits are able to raise money in different ways. This includes income from donations from individual donors or foundations, sponsorships from corporations, income from government funding, income from programs, services or merchandise sales, and income from investments."
So, this very point clearly validates the approaches used by the Isha Foundation for raising money - through several of its programs, volunteer donations, merchandise sales, etc. What they do with that money, they definitely are accountable to the Government.
Of course, only those who are interested donate into it! To give a close analogy from the software world, Open-source software does not mean Free software!
(2) Dedicated to further a particular social cause
Isha Foundation dedicates itself to the main cause of raising human consciousness through its spiritual program offerings. But they have also been running massive-scale social projects:
- Action For Rural Rejuvenation
- Project GreenHands
- Isha Vidhya, etc.
Each of these projects, though operating with minimal resources, have had a tremendous impact in the society.
I have covered some of these aspects already:
What Isha Foundation has done for farmers, especially in the rural areas: http://kazhugupaarvai.blogspot.com/search/label/farmers
What Isha Foundation has done in terms of education (only one part of it though): http://kazhugupaarvai.blogspot.com/search/label/Education
What Isha Foundation has done in terms of tree plantation: http://kazhugupaarvai.blogspot.com/2017/03/isha-project-green-hands-scam-or.html
What Isha Foundation has done for Rural population in general: https://en.wikipedia.org/wiki/Action_for_Rural_Rejuvenation
A tremendous amount of work has been put in by the Foundation. Some of the praise-worthy initiatives are:
- Operating mobile health clinics reaching over 2.2 million rural people
- Rural health clinics treating on an average 60+ patients each day
- Health awareness campaigns conducted through the state
- Disaster relief measures for Cuddalore Tsunami region, Chennai floods, Kerala floods, etc.
- Livelihood generation programs for rural people
- Isha Gramotsavam to restore dying village arts & sports in Tamilnadu and Andhra Pradesh
- More than 3 million saplings distributed, planted and tracked
- More than 35 nurseries across Tamilnadu and Pondicherry
- Dozens of Free Organic farming training sessions for farmers in Tamilnadu
- Thousands of schools engaged in tree plantation and nurturing
- 8000+ students provided scholarship education in rural Tamilnadu and Andhra Pradesh
- Training 1000s of teachers in Government schools for providing better education
- Free yoga classes in rural areas
- Free housing in the villages surrounding Isha Yoga Center in Coimbatore, etc.
No mainstream media usually publishes these, but that is the massive scale of work being silently done by this organization (one of the reasons why I admire it).
No wonder, they have a special consultative status with the United Nations Economic and Social Council in these areas and have won several state & central awards, under different governments / political party rules.
(3) Tax exempt
The NPOs are generally tax exempt and that means anybody who is donating money to these organizations will be given a tax exemption certificate that can be used for claiming Income Tax exemptions (upto 50% or 100% depending on the organization).
It also does not mean that the Non-Profit Organization is itself exempt from Income Tax Audits. That directly leads to #4.
(4) Accountability and Ethics
Any and all NPOs are subject at any point of time to Income Tax Audits. That is one of the critical means adopted by the Governments to keep a tab on the ethical accountability of the NPO.
Just because an organization has earned the Non-Profit status once does not mean, it can do any nonsense and continue retaining that status.
The following laws or Constitutional Articles of the Republic of India are relevant to the NGOs / NPOs:
- 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.
Hope this post clarifies what is applicable and what is not, as far as the Non-profit Organization status of the Isha Foundation is concerned. And in any case, it is the Government of India that had recognized the Isha Foundation as a NPO based on a thorough verification all the credentials supplied, decades ago! It is not easy for any and all to apply for such a status and get it.
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