Sequoia Climate Foundation, one of many largest and quickest rising climate funders on the earth, is known to have been placed on the ‘watch list’ by India’s ministry of house affairs (MHA).With this Sequoia — unconnected to the eponymous venture capital fund — joins abroad donors whose contributions to any non-government and non-profit organisation within the nation could be cleared solely after the ministry approves a remittance.

The determination was taken lately, mentioned two individuals within the NGO circles.

In the previous two years a number of worldwide donors discovered themselves within the authorities’s ‘prior reference list’ (PRC) of the Foreign Contribution Regulation Act, an emergency period regulation that was enacted to counter international forces suspected to undermine political and parliamentary establishments. The statute, which underwent a number of amendments over time, was additional tightened in 2020. Since then an NGO in India can obtain international donations solely in its designated account with State Bank of India’s Sansad Marg department — a framework that allows the federal government to trace the quantum and nature of international funding to native non-profits.

It’s unclear what triggered the choice to incorporate the Califoria-headquartered Sequoia within the PRC listing. A MHA spokesman didn’t reply to ET’s queries emailed on Friday. The Sequoia spokesperson additionally declined to remark or share any particulars of the muse’s backers.

According to Rahul Rishi, who leads the Social Sector & blended finance follow on the regulation agency Nishith Desai Associates, “NGOs focussed on sustainability and climate-funding are generally welcomed by the government. However, in a few instances, such climate or sustainability based themes or activities or funding get intermixed with political activism on the ground, as a result of which the FCRA authorities at times resort to pre-emptive actions.”

The ministry, it’s perceived, might also have reservations a few international donor if it believes it’s related to (or, has acquired funding from) — any of the abroad organisations within the PRC listing or has hyperlinks with individuals who’ve been essential of the federal government.

In 2021 European Climate Foundation, a widely known philanthropic organisation, was tagged as PRC.

Sequoia Climate Foundation, according to its website, believes that “bold and ambitious strategies are needed to avoid dangerous climate tipping points in a world powered by clean energy”. As one of its guiding principle, Sequoia says, “Not only do we focus on the strategies, tactics, and geographies where our grantees can have the greatest impact and accelerate a just transition to clean energy— we take calculated risks based on emerging evidence to advance solutions at speed and scale.”

According to Inside Philanthropy, an information site for grant-seekers, Sequoia, established in 2020 as an offshoot of hedge-fund backed Wellspring Foundation, is a “young funder positioned to make a big impact.” For all its size and potential, Sequoia is a fairly opaque funder and does not accept unsolicited requests for funding, said the research site.

In the last two years, some of the Indian NGOs, starved of funds, have received finance in the form of ‘fees’ (instead of donations) under separate ‘service contracts’ signed with overseas foundations which had come under glare. Such remittances are comparatively tougher to monitor as the fees can be credited to any bank account of an NGO anywhere in the country. The arrangement, said an NGO official, may not have gone down well with the ministry as it is seen as a way to sidestep the FCRA strictures.

“Organizations have begun to explore innovative ways of raising funds, and at times such non-traditional ways of income generation are also called into question. For instance, service fee income by FCRA-registered social enterprises may also be closely monitored despite there being no specific prohibition to engage in such income-generation activities in the foreign contribution statute itself,” mentioned Rishi.

Besides monitoring the international trade inflows into NGO accounts, the ministry has collected a mountain of knowledge from non-profits. A yr in the past, a number of non-profits have been requested to share particulars of all their financial institution accounts, fastened deposits, correspondence with international donors, nationalities of their workers and automobiles bought. Also inspection by authorities authorized auditors was initiated on receipts and utilisation of international donations for 3 years since 2015-16.

HIGHLIGHTS

• The regulation on international contribution was tightened in 2020
• Many NGOs receiving international funds got here beneath are glare
• Remittances by a number of international foundations have been blocked
• Smaller NGOs relying on bigger ones have been harm