1. Czech Non Profit Sector Zoran Mihanović, zoran.mihanovic@efst.hr Faculty of Economics Split, Croatia

2. Introduction  In the Czech Republic activities of non-profit organizations are regulated by the laws that determine the registration process, organizational structure, financial management, economical management and termination.  Four types of non-profit organizations (NPO‘s) are distinguished in the CR:

3. Introduction  Citizen-action associations comply with Act No. 83/1990 coll., on citizens’ associations, as amended.comprise mission and basic objectives  Foundation and charities comply with Act No. 227/1997 coll., on foundations and foundation funds, and on alteration and amendment of related acts, as amended.  Legal entities estabilished by the church or religious organizations comply with Act No. 3/2002 coll., on the freedom of religious worship and the status of churches and religious organizations, and on alteration of some acts, as amended.  Generally beneficial associations comply with Act No. 248/1995 coll., on generally beneficial companies and on alteration and amendment of some acts, as amended.

4. 1.1 State and Non-profit sector  Non-profit organizations originate to fulfill the gap between state and market. The best option is when state, market and non-profit sector works next to each other, influence each other and and cooperate. There are 3 stances of state to non-profit sector:  1. eliminate, make barriers to grow (totalitarian regime)  2. stimulation and develop (countries that already have developed non-profit sector). This is the case of the Czech Republic.  3. don’t pay attention

5. 1.1 State and Non-profit sector  NPO‘s are not dependent on the state but there exist some relations between them:  1. Legislative – state create low about foundation of NPO’s and it is obligation to registrate it at Ministry or Court of Registration. State is in some cases not obligated to make registration of the organization  2. Finances – non-governmental organizations (NGO) produce some civil services that the state is interested in and that’s the reason why it tries to provide financial support:  a) Indirectly – tax benefits  b) Directly Claimable – they get money when they live up some conditions (political party contribution for their activities, financing of church) Non-climable – grants, contributions, dotation based on purposefulness

6. 1.1 State and Non-profit sector  3. Providing of goods – NGO needs some goods:  A) Exclusive – production only by state or only by NGO  B) Current – goods provided by state but NP sector isn‘t excluded, 2 possibilities:  - cooperation of state and NGO – to spread and improve quality  - comptetitivnes between state and NGO – can’t have consumation of both providers in a same time (church basic school X basic school)

7. 1.2 Finances in NGO  NGO also have expenses. They are usually offering their goods for the price of costs or lower and this difference has to be financed from something. That’s the reason of Fundraising – finding and getting financial resources that is the one of the crucial activities of organization.  Financing of NGO should have more resources. Usually there is one or two main resources that bring even over 75 % of all financial gains. Resources can be: 1. From own activities Economic activity – incomes from advertisement  (in CR obligation to pay tax) Membership fees – mainly in small organizations Hosting of loteries, auctions, games...

8. 1.2 Finances in NGO  2. From another subjects Non-public budget – competition of NPO to attract donators, usually based on the Contract for Advertising of donators products Public budget – subsidy programs, public contracts and contracts for service providing More resources is better for nondependence of organization and it is spoken that number of the resources reflects the liveability of the organization.

9. 1.2 Finances in NGO  Finances from the European Union  EU funds are another / jounger resource of finances for non- profit sector not only. The character of it is close to public finances. Programs for getting finances from thois source is coordinated by ministries and regions. The difference from the state grants is that money can be promised for the period longer than one year that is impossible for the state and region provided grants.

10. 1.3 Development of NP sector in the Czech Republic TABLE... The Czech Republic has a rich tradition in the interest on national, cultural and politician emancipation. Totalitarian regime locked those posibilities. During socialism there was practicaly no autonomous sphere. All independent companies were blocked or stopped or under the rule of state. Velvet revolution was non-violent revolution that ended on December 29, 1989, that ment fall of the communist regime and subsequent conversion to a parliamentary republic. This revolution brought crucial change in non-profit sector. It started to appear thousands of NPO’s and as is seen in the table above with statistics from the year 1990. The growth in the number of organizations in non-profit sector is a sign that Czech NP sector is well developed and provide a good conditions and support to those who decide to enter this area. The entrance to the European Union in 2004 also opened new options of funding that helps to Czech organizations, also easier contact and cooperation with the NPO‘s from abroad.

11. 1.4 Future of Non-profit sector in the Czech Republic  As we saw above the number of non-profit organizations is still increasing and there is no barrier that could destroy this trend. But there is one more reason why the number of non-profit organization is increasing. Non-profit organizations doesn’t have logout obligation when they finish their activities, so many of them are formally existing but they don’t make any activity or make almost no activity.  The real number of non-profit organizations that are working is actually same or slightly decreasing. One of the reason of it is merging of non-profit organizations that are focused on the same target audiences and problems. Another reason of decreasing number is lack of financial resources. That usually occurs in the small organizations that have no conditions to bring finances from European Union that is nowday the best resource, so they stop their function.