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As a CSR manager or business leader, you understand the importance of Corporate Social Responsibility (CSR). The Companies Act, 2013 made CSR a mandatory requirement for certain companies, governed by Section 135 CSR food donation and other social investment guidelines. But navigating the legalities can feel overwhelming.
You might be wondering: does a Section 135 CSR food donation qualify as valid CSR expenditure? The answer is yes, and it’s one of the most direct ways to create impact. At Reshine Org, we have helped numerous companies use their Section 135 CSR food donation initiatives to not only achieve compliance but also drive meaningful change in the fight against hunger and food waste.
This guide will simplify the Section 135 CSR food donation rules for you. We will break down the legal framework into actionable steps, ensuring your company can contribute to a hunger-free India with confidence and full compliance.
Understanding Section 135 CSR Food Donation Eligibility
The first step is understanding the foundation. Section 135 CSR food donation compliance starts with knowing if your company falls under the mandate.
Which Companies Must Comply with Section 135?
According to the law, a company must constitute a CSR Committee and spend on CSR activities if it meets any of the following criteria in the preceding financial year:
- Net worth of ₹500 crore or more, OR
- Turnover of ₹1,000 crore or more, OR
- Net profit of ₹5 crore or more.
These companies are required to spend at least 2% of their average net profits of the previous three years on CSR activities. Schedule VII of the Act lists eligible activities, and “eradicating hunger, poverty, and malnutrition” is a prominent category. This is the entry point for your Section 135 CSR food donation project.
How a Section 135 CSR Food Donation Qualifies
A Section 135 CSR food donation is not merely a charitable act; it is a strategic CSR activity when executed correctly. The key is to ensure your donation aligns perfectly with the official guidelines.
For a Section 135 CSR food donation to be eligible, it must meet these criteria:
- Aligns with Schedule VII: The donation must clearly contribute to “eradicating hunger and malnutrition.”
- Partners with an Eligible Entity: The recipient must be a registered NGO with a proven track record. Reshine Org, for instance, is registered under the Societies Registration Act, making it a valid partner for your Section 135 CSR food donation.
- Maintains Proper Documentation: You must receive formal acknowledgment and detailed impact reports from the NGO for your company’s records and audit purposes.
A one-off, undocumented donation, while well-intentioned, may not qualify. The process must be systematic, transparent, and part of a structured project.
A Step-by-Step Guide to Section 135 CSR Food Donation Compliance
Follow this clear framework to ensure your company’s Section 135 CSR food donation initiative is fully compliant.
Step 1: Partner with a Registered and Reputable NGO
This is the most critical decision. Your NGO partner is the bridge between your compliance needs and your social impact.
What to look for in an NGO partner for your Section 135 CSR food donation:
- Valid Registration: Ensure they are registered under laws such as the Societies Registration Act, 1860, or as a Public Trust.
- Transparent Reporting: They should have robust systems to track and report on the distribution and impact of your donation.
- Proven Expertise: Look for a strong track record in safe food handling and redistribution. Reshine Org’s network ensures timely and dignified delivery.
- FCRA Status (if applicable): If your company is foreign-owned or funded, ensure the NGO has FCRA registration if required for the transaction.
Step 2: Formalize the Partnership
While a Memorandum of Understanding (MoU) is not always mandatory, it is a best practice that protects both parties and provides clarity for auditors.
A strong MoU for a Section 135 CSR food donation should outline:
- The specific objectives and scope of the food donation program.
- The roles and responsibilities of your company and the NGO.
- The agreed value of the donation (monetary value of food or funds) and the project timeline.
- The reporting requirements, including the format and frequency of impact reports.
Step 3: Execute and Document the Donation
This is the action phase. Meticulous documentation is the backbone of Section 135 CSR food donation compliance.
Essential documents to collect and maintain:
- Official Receipt: A formal receipt from the NGO acknowledging the receipt of food or funds.
- Detailed Impact Report: A comprehensive report from the NGO showing how the donation was used. This should include metrics like the number of meals served, kilograms of waste diverted, and photographs (with consent). At Reshine Org, we provide this to all our partners.
- Board Approval: Your company’s CSR Committee must recommend the project, and the Board of Directors must formally approve the Section 135 CSR food donation expenditure.
Step 4: Report in Your Board Report
Transparency to shareholders and the government is the final step. Your company’s annual Board Report must include specific disclosures about CSR activities.
Your Board Report must include details of your Section 135 CSR food donation project, such as:
- A detailed CSR Policy.
- The composition of the CSR Committee.
- Specifics of the projects undertaken, including the food donation initiative.
- The amount spent on the project.
- A reason if the prescribed amount (2%) was not spent.
Common Pitfalls to Avoid with Section 135 CSR Food Donation
Awareness of common mistakes can save your company from compliance issues.
- Donating to Unregistered Entities: This is the most common error. Always verify the NGO’s registration documents.
- Insufficient Documentation: Failing to get proper receipts and impact reports can lead to the expenditure being disqualified during an audit.
- Treating it as a One-Time Event: The donation should be part of a defined project aimed at eradicating hunger, not an isolated, unplanned event.
- Ignoring Food Safety: Partner with an NGO like Reshine that has strict protocols for food handling, storage, and transportation to ensure safety and quality.
Why Reshine Org is Your Ideal Partner for Section 135 CSR Food Donation
Navigating the intricacies of Section 135 CSR food donation is our expertise. When you partner with us, you get a compliant partner and a powerful agent of change.
We simplify compliance for you by providing:
- End-to-End Management: We handle the entire logistics chain, from collection to distribution.
- Comprehensive Documentation: We supply all necessary receipts, impact reports, and audit-ready documentation.
- Measurable Impact: We show you exactly how your contribution translates into meals served and lives touched, providing the data you need for your reports.
- Unwavering Commitment to Safety: Our teams are trained in safe food handling practices, ensuring dignity and safety for everyone involved.
Your company’s CSR funds have the power to fight hunger effectively. By following the Section 135 CSR food donation rules, you ensure that this power is used responsibly and in full compliance with the law.
Ready to Create Compliant, Life-Changing Impact?
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Partner with us to ensure your Section 135 CSR food donation is fully compliant and maximally impactful.
[Contact Our Partnership Team] for a free consultation. We’ll design a custom program that meets all legal requirements and creates tangible change.
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