Three scenarios for development of Russia’s charitable sector

Experts identify three scenarios for the development of the charity sector in Russia


Moscow, 03.03.2016


Attendees at “Vedomosti’s” XII annual conference on the theme of “Charity in Russia” offered their predictions for the development of charitable work in the short term. To this end, experts put forward a range of “nil”, conservative and optimistic scenarios.


Of all the traditional components involved in the development of any given sector, including charity, i.e. economic, political, social and technological, Natalya Kaminarskaya, Director of the NGO Blagosfera, has identified economic factors as being key. Natalya believes that economic challenges still remain, despite the continued growth in the total and number of donations, and that one would have to wait and see how the financial stability and state of resources looks over the next few weeks and months. There are currently too few institutions in the sector with their own resources that can be used to support individual initiatives and topic areas.


One of the most significant political challenges concerns changes to NGO legislation which, on the one hand, open up the social services market to socially-orientated NGOs and, on the other, broaden the definition of “political activity” under the “foreign agents” law, Natalya added. The effect has been to make NGOs think long and hard about how they go about organising their business and positioning themselves correctly, as well as demonstrating their successes, according to those taking part in the conference discussions.


Among likely emerging social and technological issues are an increase in the number of requests for assistance, a willingness to provide help to a wider constituency, as well as bringing together and employing modern technological know-how.


As well as traditional development factors, Natalya identified a number of issues relating specifically to the charity sector, saying that “there’s a problem with leadership in the sector. What is needed now are new trustees who can promote the idea and benefits of charity and involve new types of citizens, leading ultimately to the emergence of new organisations. There are simply not enough charitable institutions, a fact which is compounded by a lack of donors, corporate bodies and necessary infrastructure”. Natalya also believes that the absence of a common agenda is a serious problem for the charity sector. “We can deal with issues and challenges as they arise every day in our work, yet a common agenda involving everyone from gardeners to human rights activists is sadly lacking. We’re not very good at partnership working, preferring instead to guard our own individual interests”.


Natalya also believes that the charity sector has to learn to make maximum use of information in their work and to look for partners in the media. In so doing, they can introduce themselves to a group of people who haven’t previously been involved in charitable work.


Those taking part in the conference discussions attempted to describe three different scenarios, i.e. “nil”, conservative and optimistic, for the potential development of the sector, based on existing “risk factors”. Irina Menshenina, Development Director at the Downside Up charity and a member of the Association of Fundraisers, stated that it was simply impossible nowadays to imagine the charity sector being able to start again for scratch if such circumstances dictated, and that a “zero” could be regarded as the starting point on the prediction scale.


Irina believes that, for the time being, everything will continue to follow a restrained and conservative path and that such a conventional approach should be seen in a pessimistic light. In such a scenario, the charity sector will, to all intents and purposes, be unable to develop. Economic factors will have the least effect here. The willingness of the public to give to charity in times of austerity can always be relied upon, she added.


“American researchers who have studied the behaviour of the donor community during years of recession have stated that the sector should not be too concerned since it will take three years before charity begins to feel the economic pinch. We can therefore enjoy ourselves for three years before going downhill along with the nation’s economy. However, the most interesting thing is the fact that we’re likely to emerge from the economic downturn more quickly that the economy itself. I guess it’s because we work by harnessing people’s creativity and motivation, rather than operating within an economic paradigm”, Menshenina added.


At the same time, political considerations also have a negative effect. In a conservative scenario, Duma Deputies approve changes to the Justice Ministry’s Bill clarifying the meaning of “political activity”, with the result that practically all socially-orientated NGOs, including charities, are regarded as “foreign agents”. If these amendments are rejected, then NGOs will survive as they have in the past thanks to their “elasticity”.


Oksana Oracheva, Director-General of the Vladimir Potanin charity, believes that the issue of “delayed impact” should be taken into account when developing scenarios, given that most donors are prepared to wait 10 years before seeing the results of their contributions. This reflects the views of 65% of European, around 69% of Asian and 50% of American donors captured in the research.


“Individuals planning for the long term is another approach that can be used when investing personal resources in support of the sector. In Russia, we’re at the beginning of the journey in this respect as there’s no comparable research to draw upon. However, there is one indicator that can be used. Since 2007, charities have been operating using endowments, which have a 10-year planning timeline. Now, there are 100 such funds in existence. In knowing how these work, we are able to make judgements as to how much donors think long term. In neglecting to plan for the future, even the most optimistic scenario can ultimately prove to be pessimistic if long-term effects are not taken into consideration”, says Oracheva.


In a conservative scenario, making predictions about the behaviour of donors can be problematic. A study on the owners of capital in Russia in 2015, conducted by the Centre for Wealth Management and Philanthropy Skolkovo, revealed that 94% of respondents took part in charity work as volunteers in a private capacity, but only half make donations through professional funds. Such a high percentage is due to the fact that it is the head of a charity who decides how his or her organisation is supported. So, it seems we’re looking at personal, rather than institutional support. This will not stimulate the development of new charities, although donors themselves are now seeing an increasing demand for specialists in the field of philanthropy and charitable projects, but not in the NGO sector. The challenge, therefore, is to continue our work in building confidence in the sector”, says Oracheva.


A particular quirk of Russian donors is that they chiefly support so-called “safe projects” such as education, culture and health, says Oracheva, which leads to much of the sector, e.g. human rights organisations and resource centres, missing out.


The development of a potential optimistic scenario for stimulating growth in the charity sector can be enhanced by a range of positive trends. Firstly, further improvements in charity legislation. It’s not only about tax incentives for private and corporate donors. Oracheva goes on to say: “If we ignore the part of the legislation that deals with “foreign agents”, then we can say that other part(s) of it can actually stimulate development in the sector”. Secondly, efforts have been made to create new professional institutions within the sector, e.g. the Association of Fundraisers, National Council for Corporate Volunteering and a number of others.


Vladimir Torin, Director of External Relations with the Eurochem company, believes that the scenarios for growth in charitable work can be viewed optimistically. New forms of charity are required to achieve this by moving away from more traditional means of social support to devising comprehensive social programmes that bring about change in the urban environment, as well as involving young people and developing urban communities.


Author: Yulia Vyatkina


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