Czech Gov't approves change for nonprofits, longer-term state financing will be available

The Government of the Czech Republic approved at its session on 6 August a change to the "Government Principles for Providing Subsidies from the State Budget of the Czech Republic to Non-Governmental, Non-Profit Organisations by the Central Bodies of the State Admininstration" that was submitted by Minister for Human Rights, Equal Opportunities and Legislation Jiří Dienstbier, who also chairs the Czech Government Council for Non-Governmental, Non-Profit Organisations. The change will make it possible for ministries to conclude contracts with NNOs on long-term cooperation that will guarantee them financing in the years to come under certain conditions.

"Until now, non-profit organisations have usually only accessed one-year financing, and even when they were successful, they usually did not receive that financing until March, possibly even April. In the interim, of course, they had to either take out loans or temporarily let their employees go and reduce the services provided to their clients. We want to change that with the adoption of these new principles and help them. Very often they are performing services that the state itself is incapable of covering, and they are doing so for very little money," Dienstbier said.

The approved change specifically introduces the new instrument of a contract on long-term cooperation between a ministry and a non-governmental, nonprofit organisation (NNO). That contract can help the state bodies at least partially bridge the transition from one fiscal year to the next during which it is providing subsidies for publicly beneficial activities and services (always with a certain delay) to NNOs.

It would be advantageous to use such a contract in cases where the activities and services are of strategic importance and where support for them is repeated annually. "The principles include the new option for the central bodies of the state administration to conclude a contract on long-term cooperation with the NNOs. That contract will make it possible for the ministries providing the subsidies, should they choose this kind of cooperation, to establish a more systematic relationship with their partners from the ranks of selected nonprofits than has existed to date, when projects had to be submitted and re-decided on annually as to which entities would be awarded a subsidy and which won’t," explained Dienstbier.  

Both parties, the NNOs and the state, will, according to the minister, gain greater certainty with respect to their mutual cooperation and will also find the contract administratively facilitates the annual process for approving and disbursing subsidies. "The contract will, however, only be able to be concluded if a specific central body of the state administration establishes and publishes the terms for its selection of the NNOs such that the selection of partners is non-discriminatory and transparent," Dienstbier emphasized.  

The principles are a binding regulation for the central bodies of the state administratoin providing subsidies to NNOs. Basic principles for providing susbidies to NNOs from the state budget have been unified by the document since 2001, when its first version was approved by the Government.  

The principles are based on legislation governing legal relationships in this area. They guarantee not just a certain inter-ministerial unity in the provision of subsidies, at least as far as basic features are concerned, but they also guarantee that state subsidy policy will be comprehensible to the public.