Why choose us for NGO Due Diligence?

ThinkCap Advisors provides CA-led NGO due diligence and grant audit services for corporates disbursing CSR funds under Section 135 of the Companies Act 2013. Our due diligence covers FCRA and 80G/12A registration, CSR-1 status on the MCA portal, financial integrity, governance standards, and past programme performance. We have directly uncovered NGO misreporting in client engagements, protecting companies from regulatory non-compliance and reputational exposure.

Choosing an appropriate and capable delivery partner is paramount for the success of any social project. As the reputation of the donor & the implementing agency gets linked, proper diligence/review of the implementing agency becomes critical. Therefore, hiring an experienced consultant who can provide NGO due diligence services and grant audit services can be a wise move. Our NGO due diligence services cover basic and advance due diligence, covering over 100+ parameter checks.

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Partner Profile Check

The Partner Profile Assessment helps determine whether an NGO is the right fit for your CSR initiatives. We review the organisation's vision, mission, thematic focus areas, and assess whether its objectives align with your CSR strategy. Our evaluation also verifies the NGO's three-year track record, ensuring it has the experience, operational maturity, and capability required to successfully implement and manage CSR projects.

Public Domain Check

Public domain check involves structured research across publicly available sources to identify potential reputational or compliance risks associated with the NGO and its key functionaries, including trustees, board members, and senior leadership. We review news reports, legal and regulatory proceedings, audit observations, and publicly available social media information to uncover any adverse findings that could impact your CSR partnership decisions.

Human Resource Skill Set and Deployment

We assess the implementing agency's staffing profile: programme staff qualifications and experience in the relevant thematic area, field team size and geographic coverage, staff-to-beneficiary ratios, capacity-building systems, and attrition levels.

Partnership and Contracting Modalities

We review the agency's existing partnership agreements to identify conflicts of interest, over-commitment of resources, or contractual obligations that could affect the proposed CSR engagement. We also advise on the structure of the CSR implementation agreement, including payment milestones, reporting obligations, audit rights, and termination clauses.

Processes and Controls

We review the implementing agency's internal control framework: accounting systems, procurement policies, cash-handling procedures, approval hierarchies, and fund utilisation reporting protocols. Our Chartered Accountants assess whether the agency's financial systems are adequate to handle the proposed CSR grant responsibly and produce audit-ready accounts.

Governance Structure and Framework

We review the implementing agency's governance framework: Board composition and independence, frequency of Board meetings, conflict-of- interest policies separation of executive and Board roles, and compliance with the organisation's constitutional documents (Trust Deed).

Registration Related Details

We verify that the NGO is legally constituted and fully eligible to receive and implement CSR projects. We assess its legal structure, charter documents, statutory registrations, governance framework, and mandatory compliance requirements, including 12A, 80G, CSR-1 registration, and FCRA status where applicable.

Statutory Compliance Assessment

Our Statutory Compliance Assessment evaluates whether the NGO has consistently met its ongoing legal and regulatory obligations. We review compliance under applicable laws, verify the filing of income tax and FCRA returns, assess adherence to regulatory requirements, and identify any history of suspension, cancellation, or scrutiny of key registrations.

Open Matters & Regulatory Disputes

We check for open matters and pending litigation across income tax authorities, FCRA enforcement, functional/operational law, and labour law. We also flag situations where previous donor relationships ended acrimoniously or where the agency faces unresolved disputes with beneficiary communities or local government

NGO Due Diligence & Grant Audit Services

FAQs

The Answers You Need

What is NGO due diligence and why is it required for CSR?

NGO due diligence — also called pre-grant due diligence — is a structured verification conducted before appointing an NGO or implementing agency as a CSR partner. Under the CSR Rules 2021, the company is responsible for proper utilisation of CSR funds, including those disbursed to implementing partners. If an NGO misuses CSR funds, the company and its board can face penalties under Section 135(7) of the Companies Act 2013. A documented due diligence provides the Board with evidence of responsible partner selection.

What does NGO due diligence cover?

A comprehensive NGO due diligence covers: FCRA registration and compliance status; 80G and 12A Income Tax exemption certificates; CSR-1 registration on the MCA portal (mandatory under CSR Rules 2021); financial health including audit reports and fund utilisation history; Board composition and governance standards; staff capability and programme track record; existing donor relationships and commitments; and pending litigation, regulatory action, or adverse media. ThinkCap conducts both desktop and enhanced field due diligence.

Is FCRA registration mandatory for a CSR implementing partner ?

FCRA registration is mandatory for NGOs receiving foreign contributions. If your company is an Indian subsidiary of a foreign parent and CSR funds originate from the foreign entity, the implementing NGO must hold valid FCRA registration. For purely domestic CSR disbursements, FCRA is not mandatory.

What is a grant audit and how does it differ from due diligence? ?

NGO due diligence is conducted before disbursement — it assesses whether an implementing partner is credible and capable. A grant audit is conducted after disbursement — it verifies that funds were used for the stated CSR purpose and in compliance with the implementation agreement. Under the CSR Rules 2021, companies must monitor CSR project implementation and are accountable for fund utilisation. A grant audit by an independent CA firm provides documented assurance that funds reached intended beneficiaries and were properly accounted for — essential for the annual CSR Board Report disclosure.

What red flags does ThinkCap look for in NGO due diligence?

Under Common red flags we identify: expired or invalid CSR-1 registration; FCRA registration suspended or under scrutiny; lapsed 80G or 12A exemption; incomplete or un-audited financial statements; history of fund diversion or misreporting to previous donors; undisclosed litigation with tax authorities or FCRA regulators; and programme claims inconsistent with beneficiary field evidence. We have directly identified NGO misreporting in prior engagements, preventing financial and reputational exposure for our clients.