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Charitable Trusts, Societies, Section 25, NGOs and other organizations are really working for charity? Or they are doing fraud in the name of charity?

There are thousands of NGOs, Charitable Trusts and Charitable Societies working in India. Education institutes in India can only be run under charitable Trust, Charitable Society or Section 25 Company. People are taking advantage of the benefits available to charitable organizations. But are they doing pure charity?


Working of Charitable organizations; another kind of Business

The Management Institutes, Engineering Colleges, Business schools and other entities running under charitable organizations are making huge surplus. There is no restriction for making surplus and they can utilize the surplus fund of every year within next 5 years. Now the question arises:


The charitable organizations are working for charity, then why they have huge surplus. That means they are charging for their services much higher amount than of what they are spending. In fact charity is only in papers for these organizations. This is the best way to accumulate wealth and they can take out the money easily in many forms.


Charitable organization which are not even paying the employee benefits

I have worked for many years in an organization where institutes are running under charitable entities. In order to avoid gratuity payment and other statutory benefits, the organization shifted my name every one or two year from one organization to another. At the time of my resignation they have not paid my 7 years gratuity. For payment of balance 10 year gratuity out of 17 years service, they found out a new formula i.e. Basic Pay/30X15X10 which is violation of Payment of Gratuity Act (actual formula is Basic Pay/26X15X Number of Years). Here I lost my lawful benefits in two ways. One is Gratuity for 7 years, which they have not paid and other is difference amount of wrong calculation. Since I have worked for long years in this organization, I have not yet approached any legal authorities to recover the benefits.


What is the thinking of Management in these kinds of decisions?

 "Few employees may approach statutory authorities for release of their entitled benefits, but the legal fee can be paid from the benefits deducted from other employees".  This is the thinking of the management of a charitable organization with huge surplus.


Charity is not the motive of these organizations. Their thinking is how to take out money from charitable organizations. They are not worried about charitable services to the society. They are getting sufficient time also to plan misappropriation of funds.


Fees in Business Schools and Engineering Colleges

Course fee of Management and Engineering Courses which are not regulated by appropriate authority are being fixed by the management of the Trusts under which these institutes are working. Running cost is not the main factor. The fee fixation is totally arbitrary and they fix it by considering the brand reputation. Here the name of charity will never come and the benefits of charitable organizations are being used at the time of filing income tax returns.


NGOs involving in corruption

It is a common practice of some Non Government Organizations to do telephonic marketing. Their communication will be like this "Sir one child need your urgent help for operation, the cost of operation is this much and we have collected this much, amount… please help us by paying the balance amount…". Their communication will be touching our sentiments and we will donate the amount.


We also gave donation to an NGO for operation of a child. But after six months we noticed that the same advertisement was in the website with the picture of the same child requesting same amount of donation. When we tried to contact the management of the NGO initially they did not pick the phone and later when they picked the phone they told that they forget to update the website. They also revealed that they are giving commission to the people who are doing marketing for them.


So donate carefully, your hard earned money may be going to the hands of fraudsters.

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