Duma approves law on endowment funds for CSOs under sanctions
The State Duma approves a law to change the creation of endowment funds for CSOs while sanctions are in place
28.06.2022
This Bill has been initiated by the Russian government to protect existing endowment funds and ensure their stability during the present crisis which has been caused by the imposition of anti-Russian sanctions on the work of CSOs, says the Explanatory Note.
In order to ensure the financial sustainability of endowment funds, the draft law:
- suspends until 1 January 2026 the rule on the amount of income derived from the trust management of assets that make up the endowment capital, i.e. no less than 25% of such income for three consecutive years;
- suspends until 1 January 2026 the rule that an endowment can be dissolved in cases where the value of net holdings derived from the trust management of assets that make up this endowment capital has decreased for three consecutive reporting years by more than 30%, or if the value of net assets resulting from the trust management of the holding has decreased by more than 50% in a single reporting year.
An organisation will be able to use up to 30% of the amount of income derived from the trust management of assets that constitute the endowment capital to cover administrative expenses, or no more than 25% of the income accrued during the reporting year from the endowment, or no more than 1% of the average value of net assets that make up the endowment capital under a trust management agreement with a holding company during the reporting year.
Such expenses can include the rental of premises, buildings and facilities, the purchase of fixed assets and consumables, for auditing and the payment of salaries, organisational management or its individual structures and sub-divisions.
An organisation can use no more than 10% of the amount of donations received for the creation and (or) replenishment of an endowment if provided for in the donation agreement in order to cover administrative expenses.
