Russia Considers Altrusim

Russia Considers Altrusim

Published: June 21, 2013 (Issue # 1764)

Nadezhda Belyaeva / SPT

Supporting charity in Russia is often known to be an empty gesture, with most distrustful of the way funds are distributed.

As Russia is starting to see people of different social classes engage seriously in activities aimed at addressing some of Russia’s most pressing problems, Russian philanthropy is now finding itself at a turning point, according to participants of a roundtable held Thursday as part of the St. Petersburg International Economic Forum. The topic of the roundtable was “Cultivating the Next Generation of Global Philanthropists.”

“What we have witnessed is nothing short of a revolution, and I am not exaggerating at all,” said Alexei Kudrin, the Dean of the Department of Liberal Arts and Sciences at the St. Petersburg State University. Kudrin was also Russia’s former finance minister. “I left civil service more than 1 1/2 years ago, and over that period I have been deeply involved in fundraising initiatives both in the regions and in the capital cities. Our funds have almost doubled, and I am genuinely impressed with the enthusiasm of donors.”

The issue of philanthropy in Russia is not new to the forum. However, the main difference between Thursday’s roundtable and previous discussions is that the focus of the debate has now shifted to sharing the various aspects of entrepreneurs’ dissatisfaction with state policies in the field of philanthropy — mainly concerning the government’s failure to create what potential donors would find an acceptable climate for making donations.

“Yes, one specific feature of philanthropy in Russia is that not many Russian business people agree that generosity can truly feel good; Rather, many potential philanthropists see their donations as a form of investment — they want to use it to promote their businesses or their own image,” Kudrin said. “Indeed, as with every investment, they want it to pay off. In some cases we see that businesses tend to more keenly invest in improving the infrastructure around their factories, for example, thus benefitting primarily their own employees who live in the area.”

While in 2012, Russian entrepreneurs on the panel had been adamant that the government needs to offer incentives for charitable giving — a natural reaction perhaps, given that they didn’t go into business out of wanting to do good — the hot topic this year was the creation of a working scheme that would allow the middle class to be involved in philanthropy.

“Russia has recently seen some impressive cases of volunteer activities, including, for example, initiatives in the regions to help the victims of the flood in Krymsk in the summer of 2012,” Kudrin said. “However, very few schemes exist in Russia that make it easy for ordinary Russians who want to engage in philanthropy, to do so.”

The key reason that business people in Russia are reluctant to donate is because at present, charity is “unprofitable,” meaning that, in their opinion, the government needs to make donations attractive to companies if it wants them to be seriously involved.

It is still hard for many Russian business people to stop seeing charity as an obligation, and many of them constantly feel worried, uncomfortable, suspicious and even cheated if they get involved.

According to Ruben Vardanian, co-head of Sberbank CIB, to build mutual trust between the donors and recipients it is essential to develop and improve the mechanisms of tracing the efficiency of donations as well as measuring the positive effects of a philanthropic act.

“For most people who give money to support a project or help those in need, it is not enough to simply send the money; they want to be able to see the difference that their donation has made — and this is often a problem,” Vardanian said. “For example, we are funding a school in Armenia. What are the criteria for the success of that school? For me, it is not about the numbers of pupils who then get coveted places in top universities. Rather, it is about changing the life in the town where the school is located, improving the infrastructure there, and even changing the international perception of Armenia and the Armenians because the school accepts international students. The achievements that we expect are very hard to measure but they really justify the investment for us.”

Jurgen Griesbeck, the founder and chief executive officer of Street Football World, pointed out that internationally, in the field of philanthropy, the major problem is not a shortage of money.

“Trust me, there us a substantial amount of money out there,” Griesback said. “The trick is that this money needs to find the right investment, which is not at all an easy task. The money and the solutions appear to be disconnected, and this is the biggest challenge that we face.”

Street Football World is an organization that supports an international network of local groups that use football to empower disadvantaged youth and ultimately create social change.

The connections between the money and the solutions will be stronger if there is more transparency about the spending of grants, the panelists agreed. “Measurability of the results is key to building the confidence of philanthropists,” said Lenka Setkova, the director of philanthropy services at the Coutts bank.

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