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Czech Non-Profit, Non-Governmental Organizations Facing Problems

Prague, July 5 (RFE/RL) -- Supporters of Czech non-profit, non-governmental organizations say that their sector of Czech society is in crisis.

The villains are the Czechs' lack of clearly defined legislation, and problems with funding.

Some 30,000 such organizations so far have registered in the country, as well as 3,000 charitable foundations. They conduct humanitarian activities, ranging from culture and education to health care and aid to refugees.

The executive director of the Czech Information Center for Foundations and Other Not for Profit Organizations, Jana Ryslinkova, says, "We have very primitive legislation here." She says that many foreign sources who were supporting the sector are withdrawing.

Advocates of non-profits in the Czech Republic say such organizations should play an important role in society. But Prime Minister Vaclav Klaus has said that the state has the best idea of what services its citizens need, and that non-governmental organizations are unnecessary. Ryslinkova says, "The government just doesn't want to deal with it. They don't see the sector as a very important force in society."

Ryslinkova says that Poland and Hungary have been successful in establishing a couple of significant not for profit organizations and that Bulgaria has a general law describing the not for profit sector. But the very notion of a non-profit, non-governmental sector is still a new one in Eastern Europe and the countries of the former Soviet Union.

Czech law recognizes the existence of non-profit organizations obliquely. A freedom of association section in the Czech constitution allows any citizen to establish a civic association, which is treated as a non-profit organization. Once the organization is registered, it does not have to pay certain taxes and cannot use any eventual profits for private purposes.

The law includes only a few lines on foundations and says nothing about structure and the way a foundation functions. A draft bill currently in the new parliament aims to clarify what a foundation is and how it should operate.

The law does allow anyone to register a non-profit foundation with little more than a general statement of purpose. As a result, some foundations are sometimes used by businesses as fronts to earn profits tax free. In addition, the law allows businesses to reduce their tax base by no more than two percent through charitable donations, often discouraging them to contribute further once they reach the two percent mark.

This general lack of accountability coupled with few incentives to give money can contribute to public distrust of non-profit organizations, which provide social services previously, and sometimes still, provided by the state.

The Czech government provided the equivalent of more than 90 million U.S. dollars to civic associations -- that is, non-profit organizations -- and what are known as public benefit corporations in the 1995 budget. Foundations cannot apply for government funding, the money is distributed through government ministries. The Ministry of Education gave the equivalent of more than 25 million U.S. dollars this year to organizations involved in education.

Ryslinkova says that new non-profts have little access to public money, which goes to, in her words, "only some" non-profits.

The director of the Social-Cultural Center in Prague, Petr Bergmann, says his organization may be forced to close because of a lack of funding. The center offers cultural programs, musical concerts, avant-garde and experimental theater, art exhibits, environmental and social programs and psycho-social services.

He opened the center five years ago and raised $280,000 for its renovation between 1993 and 1995. He said the government provided one-third of the initial funds, foundations and private donors, one-third. Now, he says, foreign companies are finding "more attractive countries to fund" and government funds are scarce. He said Czech companies contribute little because of the two percent tax deduction cap.