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Opportunities to use endowment for NPOs are extended The bill on amendments to the Federal law "On the procedure of formation and utilization of endowment of nonprofit organizations" developed by the Ministry of Economic Development, was adopted by the State Duma in the 3rd reading. The measures envisaged by the bill will cover about 200 endowment funds.
The draft law was developed on behalf of the Government of the Russian Federation. It is aimed at improving the system of formation of endowment funds.
The bill will allow referring donations for the formation or replenishment of endowment to charitable activities. This provision is important for regions and municipalities, since now support for funds with target capital will be included in the list of powers of the federal subjects and local governments, which will give additional dynamics to the development of endowment in the country.
The draft law allows charitable organizations to participate in business companies if they receive securities as a donation to replenish the endowment. As well as in the case when the management company places the endowment funds of a charitable organization in shares of public joint-stock companies.
In addition, the bill provides for a number of incentive measures that are aimed at wider dissemination of the mechanism of endowment and the development of mass charity. One of these measures involves the possibility of extending the period for collecting funds for the purpose of forming endowment. If an NPO has managed to attract 50% of the funds required for forming endowment during the year, the highest management body of the NPO has the right to extend the collection. This measure is particularly relevant for regional NPOs, as well as for SONPOs that work with mass donations from citizens.
The bill allows using public fundraising not only to replenish, but also to form the endowment. It also increases the ability of specialized organizations and owners of endowment to increase the amount of endowment at the expense of unexpended income.