03:01 GMT +317 October 2017
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    PHILANTHROPY IN POST-SOVIET RUSSIA

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    By Yelena Shakhova, RIA Novosti commentator

    The recent purchase of a Faberge jewellery collection by Russian millionaire Viktor Vekselberg has politicised opinions in his home country. Some remark sceptically that the deal is all about vanity. Others applaud it as a gesture of generosity toward Russia's public-the businessman has promised to display his Faberges at various venues across the country starting this Easter season. But the gesture can by no means be considered an act of full-fledged philanthropy, as once brought into Russia, the Faberges will find themselves locked up by its laws.

    What for are those voluntary constraints on the use of one's property? Does philanthropy really have any freedom in present-day Russia? Let us try to find answers to these questions.

    There could be no such thing as philanthropy in the Soviet era, as everyone was supposed to be equal. However, the practice re-emerged with the collapse of the Communist regime and the transition to a market economy. These days, patrons bankroll most of this country's arts-related activities.

    St Petersburg's Hermitage Museum and Moscow's Bolshoi Theatre are supported by corporate giants, both Russian (such as LUKoil, Transneft, and Gazprom) and foreign (IBM, Samsung Electronics, and Coca-Cola). Vekselberg, incidentally, is a Bolshoi trustee.

    Many companies set up charity foundations and finance dozens of different projects. LUKoil, for one, supports the Tchaikovsky Symphony Orchestra, the Perm Opera and Ballet Theatre, the Beryozka folk dance group and the Russian Song Choir, as well as various orphanages, schools and medical institutions.

    Norilsk Nickel makes lavish financial contributions to science and technology, specifically to research projects on hydrogen energy and fuels that are conducted within the Russian Academy of Sciences. Public education is another of the company's priorities.

    Yukos has provided substantial money for academic research and for the renovation and modernisation of public libraries, notably ones based in rural areas. It is also a long-standing sponsor of the Russian Booker literary award and the MKhAT theatre.

    Aeroflot, Russia's major air carrier, sponsors various arts events and performing groups. Recently, it offered a free flight to a team of European doctors travelling to Moscow to treat an elephant in the city zoo. The doctors brought as much as 500 kilograms of medical equipment on board. The sick animal also received support from fifty individual entrepreneurs and members of the public.

    The Gazprom gas giant covers most of Russia. It pursues a strong welfare policy, paying high (by local standards) wages to its staff. Its sponsorship priorities lie in the world of sports, but it also contributes to public health, education and the arts.

    Nearly all of Russia's private businesses, big and small, engage in charitable activities these days and virtually every social establishment benefits from sponsorship. Despite the communist regime's persistent efforts to eliminate it, charity has re-emerged, which hardly seems surprising given that generosity is traditionally perceived as a trait inherent to the Russians, just like impulsiveness is to the Italians, entrepreneurial knack to the Americans, and good manners to the British.

    According to Yevgeny Gontmacher, Vice President of the Russian Union of Industrialists and Entrepreneurs, who until recently held a senior position in the Kremlin staff, Russia's big business now channels up to 17% of its total profits into charitable programmes.

    And yet, the large sums put by the private sector into welfare and charity are not enough to cover the needs of all of Russia's 147 million residents. Sociological surveys funded by the Heinrich Boell Foundation indicate that the incomes of a quarter of the Russian population are below the subsistence threshold. Having dependent children or seniors to take care of makes it still harder for low-income households to get by.

    Economic instability and its implications for mental health are just two of the causes of people's failure to earn a living. In such conditions, philanthropic activities have an even greater role to play.

    Russia remains a mystery even to the insiders. Here, the rich are treated with circumspection. But to be a philanthropist, one has to have money to spare. The idea of re-dividing and re-distributing property is still quite popular in Russia, Gontmacher says. It permeates not just the general public's mind, but that of the political elite as well, although in the latter case this may not be as conspicuous.

    The fact that the Russian law envisages no tax breaks for charitable activity goes to show the government's lack of trust in the business community, the former state official argues. But it was private businesses that shouldered much of the social burden during Russia's transition to the market economy, he emphasises.

    According to Gontmacher, if the government had assumed full responsibility for the social sector in the 1990s, "our state would be non-existent now." It would have failed to cope with the challenge because of its sluggishness and low efficiency. As it re-emerged in the 1990s, the private sector provided employment for the overwhelming majority of the working Russian population. It also offered financial support for community programmes in public health, housing and utilities.

    As Gontmacher sees it, Russia has entered a new stage now, and is facing the daunting task of eradicating poverty and raising the population's living standards in the next ten years. This challenge will be impossible to cope without the business community's contribution. The priority areas will include healthcare, public education, and housing. "I believe businesses should start paying more attention to the health and training of their employees," Gontmacher points out.

    It may sound like an axiom in other countries, but this is not the case in Russia. Here, these and other sectors were fully supported by the government for some eighty years, and their structure and legislative framework have not yet been adjusted to the market environment.

    Despite the lack of tax breaks and public mistrust, charitable activity is increasing in Russia. Gontmacher personally knows high-profile tycoons who anonymously pay for the medical treatment of sick and disabled children. This is what he believes true philanthropy should be like.

    Most members of Russia's business community, however, don't shun publicity, but they know it comes at a cost. The print media may ask up to $20,000 for a promotional feature and television promotion charges are just exorbitant. More often than not, businessmen prefer to allocate these funds for their latest charitable projects.

    Gontmacher sees a solution to the problem in restoring coordination between the government, the business community and the public. "If we mean some constructive things rather than politicking, we must realise that the business community cannot be socially responsible unless the government and civic society are, too."

    Improving legislation, including the introduction of tax breaks, will lead to a boom in charitable activity in Russia, Gontmacher believes. The structural and ideological features of Russian philanthropy have become more strongly marked in recent times, but it still remains more like a wild shrub than a carefully tended garden plant. However, perhaps this is precisely why charity is so tenacious.

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