The City of Prague, in cooperation with PPF banka and the PPF Foundation, has launched a unique programme aimed at strengthening the financial stability of non-profit organisations providing social services. Under this initiative, organisations included in the Regional Network of Social Services and receiving grants from the City of Prague will be able to bridge, at no additional cost, the period between the approval and the actual payment of subsidies. The programme will help to ensure the continuity and quality of services and stabilise the financial situation of these organisations.
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PPF banka, the PPF Foundation, and the City of Prague launch joint programme to support financing for social service providers
Non-profit organisations are a key pillar of the social services system in the capital. They provide daily care for seniors, people with disabilities, and other vulnerable groups. However, at the beginning of each year they often face a difficult situation in which they must cover wages and operating costs without yet having access to approved and paid subsidies. As a result, they are frequently forced to rely on commercial loans during the first months of the year.
“Social service providers repeatedly, through no fault of their own, find themselves at the beginning of the year in a situation where they must cover operating costs without having access to the allocated funds. I consider this situation unsustainable. This new instrument will bring them greater certainty and stability for their day-to-day work,” said Alexandra Udženija, Deputy Mayor of the City of Prague.
The programme launched today is based on financial assistance in the form of interest-free loans that will enable selected social service providers to bridge the period from the beginning of the year until the payment of grants from the City of Prague and, where applicable, from the Ministry of Labour and Social Affairs (MoLSA). This instrument eliminates pressure on organisations’ cash flow, reduces the need for commercial financing and contributes to their overall stability and efficient management.
“Our goal is a stable and sustainable social services system that can flexibly respond to the needs of the city’s residents. This programme is a concrete step towards making it easier for non-profit organisations to operate. We greatly value their work and cannot imagine the social services system functioning without them. I would like to thank PPF Group for their willingness and goodwill in supporting non-profit organisations, which are an indispensable element of social care in the capital. It proves that cooperation between non-profits, the city, and the private sector makes sense,” added Udženija.
The cooperation model between the City of Prague (also as a shareholder of PPF banka), PPF banka, and the PPF Foundation is based on the principles of transparency, efficiency, cost-effectiveness and measurable impact. It constitutes a long-term, coordinated approach to supporting social services and the public interest in caring for those in need.
“Non-profit organisations working in social services perform irreplaceable work, and we are pleased to take part in a programme that will support their financial stability. We are also glad that this initiative is being implemented through the cooperation of our two largest shareholders – the City of Prague and PPF Group,” said Petr Jirásko, CEO of PPF banka.
The programme will be implemented by the PPF Foundation, to whose budget PPF banka is a major contributor.
“This programme offers a practical and systemic solution to the timing mismatch between operating costs and income from public grants. The PPF Foundation will provide non-profit organisations with an interest-free loan allowing them to ensure continuity of care and focus on their core mission of helping people who need it,” said Jana Tomas Sedláčková, a PPF Foundation trustee.
The City of Prague will recommend participating service providers and ensure that the programme is linked to the city’s grant system. Social service providers interested in this interest-free bridging financing have already been contacted by Prague City Hall.
“As one of the largest providers of field-based personal assistance services in the Czech Republic, we would like to express our sincere thanks to Deputy Mayor Alexandra Udženija and PPF Group for creating bridging financing for social service providers in Prague. This is a unique model of support with no parallel in other regions of the country. Each year we face significant financial pressure at the beginning of the year due to delays in receiving grants and have been forced to use bank loans or overdrafts, often at high cost. The loan provided by the PPF Foundation with the support of the City of Prague therefore offers a systemic solution that stabilises our finances and reduces the risk of limiting services for people in need,” said Jiří Boháček, Chairman and Director of the registered association HEWER, z. s.
Source: Prague City Hall Press Release