Socially-oriented non-profit organizations will receive state support

11th June 2015

Socially-oriented non-profit organizations will receive state support

The Ministry of Economic Development of the Russian Federation proposed to provide state support to socially-oriented non-profit organizations similar to support provided to SMEs.

Today, there is a different approach in the use of instruments of state support for socially-oriented non-profit organizations and for small and medium business, - said the Director of the Department of Social Development and Innovation of the Ministry of Economic Development of the Russian Federation Artem Shadrin.

“For example, there are mechanisms of subsidized interest rates, soft loans, guarantees on loans available for small and medium business. There are several development institutions that are engaged in this activity, for example, the subsidiary bank of Vnesheconombank - “SME Bank”, Credit Guarantees Agency, regional guarantee funds. Almost none of these instruments work for socially-oriented NPOs. In our opinion, commercial and non-profit organizations should be equalized in this regard, - said Artem Shadrin.

In this context, the Ministry of Economic Development supports the proposal to amend the law “On Noncommercial Organizations” and add the provisions on socially-oriented NPOs support similar to SMEs support to the law.

“This provision allows interested authorities, along with support for entrepreneurship, to allocate budget funds to support the infrastructure of NPOs, in particular, ensure the provision of soft loans and guarantees. In fact, we equate support for non-profit organizations and the established practice of SME’s support, - said Artem Shadrin.

Shadrin said that the existing level of direct subsidies to socially-oriented NPOs is clearly insufficient. This leads to the fact that some organizations are forced to take loans at commercial rates, which clearly hinders their development. They could develop much faster if there is a mechanism for soft-term financing.

This also applies to non-profit social service organizations, non-profit educational and medical institutions.

“For example, according to the law on education, all schools and universities can be established only in the form of a non-profit organization. However, all the instruments of state support for lending are now funded only by budget items to support SMEs, and therefore cannot be used to support NPOs. It turns out that we discriminate education compared to purely commercial enterprises”, - concluded Artem Shadrin.

Thus, the Ministry of Economic Development prepared relevant amendments to the law on NPOs, which have already received the approval of the Public Council under the Ministry.

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