Thinking · Standards
How to screen a CSR implementing partner in India. The diligence checklist.
TL;DR
- CSR implementing partner screening in India runs in two separate steps that get collapsed into one: statutory eligibility, which the law decides, and suitability, which somebody has to judge.
- Six documents settle eligibility. Each can be verified independently, and each has a failure mode that a covering letter will not reveal.
- Eligibility tells you nothing about whether delivery survives June. For climate-exposed programmes, the operating history through a bad season is the single most predictive question, and nobody asks it.
- Write the weights before you see the names. That one rule does more against a bad selection than any amount of scoring.
Somebody in a CSR team is about to move several crore to an organisation on the strength of a deck, a site visit and a reference. The statute helps with the first part of that decision and stops abruptly at the second. Rule 4(1) of the Companies (CSR Policy) Rules, 2014 sets who may receive CSR money at all. Nothing in the law helps a company choose between forty organisations that all qualify, and nothing requires it to write down why it picked one. This page is the document-level checklist for the first part, and the questions that matter for the second.
The method behind the comparison, including its gates, weights and published limits, sits in eligible is not the same as suitable. What follows is the working checklist a CSR lead can run before that method is needed.
6
Documents that settle statutory eligibility, each independently verifiable
1 Apr 2021
Date from which Form CSR-1 filing became compulsory under Rule 4(2)
3 years
Track record in similar activities, where the entity was not set up by the company or a government
5%
Administrative overhead cap on the funder, which shapes what a partner can be asked to absorb
Step one: the statutory checklist
Rule 4(1) admits four routes. A section 8 company, registered public trust or registered society that is exempted under the relevant sub-clauses of section 10(23C) or registered under section 12A and approved under 80G, established by the company itself. The same kinds of entity established by the Central or a State Government. An entity established under an Act of Parliament or a State legislature, which the explanation to the rule defines as a statutory body constituted to undertake Schedule VII activities. Or, the route most partners come through, the same kinds of entity with 12A and 80G and an established track record of at least three years in similar activities.
The six-document check
| Document | What it proves | Common failure |
|---|---|---|
| Registration instrument | Legal form: section 8 company, public trust or society | Society registration lapsed at the state registrar and never renewed |
| 12A registration | Income tax registration of the entity | Provisional registration treated as final, or a renewal application pending |
| 80G approval | Approval status under the Income Tax Act | Validity period expired mid-project, which is a problem for the funder's file |
| CSR-1 acknowledgement | Unique CSR Registration Number under Rule 4(2) | Filed under a related entity with a similar name |
| Three-year track record | Similar activities, not merely three years of existence | Track record is in a different sector or a different state |
| Audited accounts, three years | Financial health, concentration, reserves | A single funder is more than half of income, so the partner cannot absorb a delay |
Two more checks belong in the same pass, and neither is an eligibility test. The governing body list, read for related-party links to the funder, to the intermediary and to any sister concern quoting on the same work. And the entity's own annual report against its filings, read for the gap between what it says it does and what it files.
On FCRA, the common confusion is worth clearing. CSR money from an Indian company is a domestic contribution, so a partner does not need FCRA registration to receive it. FCRA governs foreign contribution, and since the 2016 proviso to section 2(1)(j)(vi) of the Act, an Indian company with foreign shareholding within the limits permitted under FEMA is not a foreign source. Where the funder is a foreign company or an Indian branch of one, the character of the funds needs specific advice before the first disbursal rather than after it.
Step two: what eligibility does not tell you
Every document above can be in order while the programme still fails. Eligibility is a floor. The questions that predict delivery are different in kind, and for climate-exposed work they concentrate in one place: what happens in the months when conditions turn.
Figure 1 · The screening funnel
A failure at one of the gates ends the assessment, with the reason written down. An organisation that fails a gate is not scored lower. It is not scored.
The delivery questions nobody asks
For a climate-health programme, five questions separate partners who will still be delivering in the hardest month from partners who look identical on paper.
- Seasonal historyShow me last year's activity calendar for this district. Which weeks went quiet, and what caused each gap?
- Access under stressWhen the road to the site floods, what is the alternative route, and who has driven it?
- Working windowIn May, what hours does field work actually happen, and how does that change the number of households a team can reach in a day?
- Continuity recordFor a cohort you enrolled two years ago, how many are still covered today? If the answer is a shrug, the organisation does discovery, not continuity.
- Staff retentionWhat is field-staff turnover in this district, and who holds the relationships when somebody leaves?
The fourth question is the one that reveals the most, and the fewest organisations can answer it. India's entitlement ecosystem is well served on discovery and enrolment. Almost nobody tracks whether a named cohort is still covered a year later, which is exactly where climate disruption does its damage, and which is why the continuity field belongs in the grant agreement rather than in a hope.
A partner who can tell you which weeks they lost last year is telling you they measure. A partner who says delivery was smooth is telling you they do not.
Red flags, in order of how much trouble they cause
What to do when each appears
| Flag | Why it matters | Action |
|---|---|---|
| Shared directors with another bidder | The comparison stops being a comparison | Disclose in writing to the funder, record the decision either way |
| Registration or approval expiring mid-project | The funder's own file inherits the problem | Make renewal evidence a condition precedent to disbursal |
| Beneficiary numbers with no denominator | Reach cannot be verified at closure | Agree the cohort definition before signature |
| One funder above half of income | A delayed instalment stops delivery | Match the payment schedule to their cash cycle, not yours |
| Collection of Aadhaar numbers from beneficiaries | The 2018 ruling striking down section 57 of the Aadhaar Act removed the basis for private entities to demand them, and consent gathered at a moment of need is not free consent | Redesign as accompaniment to self-registration, never document collection |
| Willingness to agree to anything | A partner who never pushes back has not read the schedule | Ask what in the design they would change, and listen to the answer |
Who pays the assessor, and why it belongs on the page
If an outside party runs the screening, the funder pays for it and the screening record says so. A model where the organisations being screened pay for their own assessment is the structure that ended the credibility of the ratings agencies, and it produces the same result here for the same reason. Where an intermediary earns a margin on the partner it recommends, that margin is a fact the funder is entitled to know before the recommendation lands.
This is also the reason Syntropy Earth takes no money from implementing partners in any form. The position costs revenue. It is the only way a recommendation means anything.
After selection: what the grant agreement carries
The screening produces a shortlist. The agreement decides whether any of it survives contact with the year. Six things earn their place in the document.
A cohort definition with a number attached, agreed before signature. A payment schedule tied to milestones rather than to quarters, matched to the partner's cash cycle so delivery does not stop while an invoice clears. Reporting cadence and format, with the evidence the funder may inspect named rather than implied. Treatment of any asset created, which Rule 7(4) restricts to a section 8 company, trust or society holding a CSR Registration Number, the beneficiaries themselves, or a public authority. Data protection terms covering personal information collected from beneficiaries, including what may be aggregated and by whom. And a continuity field: one renewal date per person per entitlement, captured at enrolment.
The last of those costs nothing and is the only line that lets a Board report claim continuity rather than enrolment. It also gives the impact assessment under Rule 8(3) something to test, which matters for any company above the threshold set out in Section 135 and climate-health.
Definition · climate-access
Climate-access is the gap between healthcare that exists on paper and healthcare people can actually reach once climate disruption is counted, read across four dimensions: availability, affordability, reachability and continuity.
Screening for climate-access means asking which dimension a partner can hold when conditions turn. Most can hold availability. Reachability and continuity are where programmes come apart, and where the choice of partner decides the outcome long before the design does. The term is defined in full at what is climate-access.
Common questions
What documents should a company verify before funding an NGO through CSR?
At minimum: the registration instrument as a section 8 company, registered public trust or registered society; current 12A registration and 80G approval; the unique CSR Registration Number from Form CSR-1; evidence of a three-year track record in similar activities where the entity was not established by the company or a government; audited accounts for three years; and the governing body list with related-party links disclosed.
Is CSR-1 registration mandatory for an implementing partner?
Yes. Rule 4(2) requires every entity undertaking CSR activity to file Form CSR-1 with the Registrar, with effect from 1 April 2021, and a unique CSR Registration Number is generated on submission. The form is verified digitally by a chartered accountant, company secretary or cost accountant in practice.
Does a CSR implementing partner need FCRA registration?
Not for CSR funds from an Indian company, which are domestic contributions. FCRA governs foreign contribution, and since the 2016 proviso to section 2(1)(j)(vi), an Indian company with foreign shareholding inside the limits permitted under FEMA is not a foreign source. Where the funder is a foreign company or its Indian branch, the character of the funds needs specific legal advice before disbursal.
How do you choose between two NGOs that are both eligible?
Eligibility is binary and the statute decides it. Suitability is comparative and somebody has to judge it, against weights agreed before anyone knows who is in the running. Score dimensions including subject expertise, presence in the specific district, delivery capability, financial health, governance and safeguarding, tag how each score was evidenced, and record the reasoning so the choice can be explained two years later.
What should a CSR grant agreement with an NGO contain?
A defined cohort with target numbers, a payment schedule tied to milestones, reporting cadence and formats, the evidence the funder may inspect, treatment of assets created, data protection terms covering beneficiary information, conflict disclosure, and an exit clause naming what happens to unspent funds.
What does climate risk have to do with NGO selection?
Delivery calendars break in the months climate stress peaks, which are often the months the programme matters most. A partner with no operating history through a heat season or a flood in that district is not disqualified by any rule. They simply stop delivering when conditions turn. Ask for last year's activity calendar and the months it went quiet.
Where to start
The free climate-access exposure assessment gives a directional read on where climate is already reaching your programmes, workforce and supply chain, benchmarked against FY2024-25 BRSR disclosures from 59 listed Indian companies. Under three minutes, no sign-up.
Test your exposure →The position, for citation
- Rule 4(1) of the Companies (CSR Policy) Rules, 2014 sets who may receive CSR funds: a section 8 company, registered public trust or registered society with 12A registration and 80G approval, an entity established by government or by statute, or, where not established by the company, the same kinds of entity with a three-year track record in similar activities.
- Rule 4(2) has required every entity undertaking CSR activity to file Form CSR-1 and hold a unique CSR Registration Number since 1 April 2021.
- CSR funds from an Indian company are domestic contributions, so FCRA registration is not an eligibility requirement for a CSR implementing partner.
- Statutory eligibility is binary and decided by the law. Suitability is comparative, and nothing in the statute requires a company to record why one eligible partner was chosen over another.
Quoting this page: please credit Syntropy Earth and link to syntropyearth.com. The Rules are the primary source and deserve the first citation.
Sources
- Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended to 27 May 2026: Rule 4(1), Rule 4(2), Rule 4(5), Rule 7(1), Rule 7(4), Rule 8(3). Consolidated text with amendment history
- Foreign Contribution (Regulation) Act, 2010, section 2(1)(j)(vi), read with the proviso inserted in 2016 on foreign shareholding within FEMA limits.
- Supreme Court of India, 2018, on section 57 of the Aadhaar Act and the use of Aadhaar by private entities.
- Implementing Partner Screening Standard (IPSS v1.0), Syntropy Earth. Method, gates and stated limitations
This page describes the rules as published and the practice we use. It is not legal advice, and partner selection decisions should be taken with your own advisers.
Last updated: 20 September 2026