Medvedev's move is a big deal since the previous president, Vladimir Putin, signed a law that subjected existing nonprofits to extremely harsh regulations that included highly-detailed yearly audits, made starting a new nonprofit incredibly difficult to do and virtually barred foreign nonprofits from working or funding activities within Russia.
Putin argued that the laws were needed to fight corruption (and though that rationale has been given for a host of new laws, there hasn't been a real reduction in the levels of corruption in Russia), the real reason seemed to be fear that the nonprofit sector would be used to fund anti-government activities. Putin blamed the success of pro-democracy movements in Serbia, Ukraine and Georgia on organizational and monetary support from foreign governments funneled into the countries through nonprofits.
But while the Soviet Union had massive social programs to take care of the most vulnerable members of society, post-Soviet Russia does not, meaning that the nonprofit sector was one Russia badly needed to develop. It's likely that Medvedev realized this and why he was willing to break with Putin on this one.
Under the new laws the process to register new nonprofits has been greatly simplified, while existing nonprofits will only have to conduct audits once every three years, and the audits will be far less intense than they were under the Putin law. Regulations on foreign nonprofits operating in Russia are also expected to be loosened in the near future.
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