How India’s Crackdown on Nonprofits Could Signal Future Challenges for US Charities

In March 2023, a woman named Meeta lost her job with a well-known Delhi NGO after 15 years of service. She was let go shortly after her organization lost its approval under the Foreign Contribution (Regulation) Act (FCRA). This act controls how nonprofits in India receive and spend foreign funds. Without this approval, organizations cannot access international donations.

Meeta’s situation is not uncommon. Many nonprofits and human rights advocates in India face similar struggles as the government tightens its grip on non-governmental organizations (NGOs). In fact, thousands of NGOs have seen their FCRA approval revoked over the years, limiting their ability to operate effectively.

In the U.S., there are worrying signs that similar restrictions could emerge. A proposed bill, HR 9495, would give the treasury secretary the power to revoke the tax-exempt status of nonprofits labeled as “terrorist supporting organizations.” Critics of the bill say it poses a serious threat to organizations that engage in advocacy work, much like what has occurred in India.

Commenting on this trend, experts warn that it could lead to a drastic shift in how nonprofits function. The potential impact is already being felt as U.S.-based organizations prepare for a future where funding might diminish. They see India’s current challenges as a warning about what could happen if such legislation comes into effect.

After losing her job, Meeta struggled to find work for nine months. As a single mother of two, she had recently purchased a home, and paying her mortgage became increasingly difficult. Her former organization had also been forced to downsize significantly, cutting back operations due to the loss of funding.

Notable Indian NGOs, like Save The Children and Amnesty International India, have also faced severe repercussions from FCRA revocations. The climate for civil society is increasingly troubling, with over 3.3 million NGOs in India employing more than 18 million people. The tightening of FCRA restrictions has made it challenging for many organizations to continue their vital work, particularly in human rights and development.

The sweeping use of laws like the Unlawful Activities (Prevention) Act (UAPA) demonstrates the lengths the Indian government might go to stifle dissent. This law allows for broad powers to designate people or groups as terrorists, leading to significant detainment of activists and journalists. There is concern that vague definitions allow the government to silence any opposition.

Statistics from the CIVICUS Monitor, which assesses civic freedoms globally, label India’s civil space as “repressed.” This classification has far-reaching implications for activism and advocacy work in the country.

Several nonprofit leaders underscore that losing their FCRA status severely hampers crucial services. Many organizations previously coordinated with local groups, and the new laws have disrupted these partnerships. They highlight that limiting international donations restricts their ability to tackle enduring issues like poverty, health care, and education.

In a striking example, the Sambhavna Trust Clinic—a key medical facility for survivors of the Bhopal gas tragedy—was forced to shut down for a time due to funding cuts after losing its FCRA certification. Though its registration was eventually renewed, the uncertainty around future funding continues to loom.

Many NGOs have reported feeling pressured to avoid terms like “human rights” in their communications, fearing that mentioning sensitive topics could further jeopardize their funding. An activist pointed out that organizations focusing on issues that don’t align with the government’s agenda, particularly those advocating for marginalized groups, are often targeted.

As we watch this scenario unfold in India, many experts caution that similar trends could emerge in the U.S. if HR 9495 becomes law. Advocacy groups have compared the potential consequences to a playbook used by various authoritarian governments worldwide to crush dissent.

In essence, the struggles faced by NGOs in India serve as an important lesson for those in the U.S. who are currently advocating for civil society protection. The potential repercussions of legislation like HR 9495 could profoundly change the landscape of nonprofit work, much like what has already transpired in India.

For more insights on the implications of civil society restrictions, you can visit CIVICUS.

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