Legislation on charities needs adjusting

in a round table on the subject of The
Voluntary Sector as a Prerequisite of Civil Society in Russia
held at the Council of the Russian Federation have
been discussing needed amendments to the legislation on the voluntary sector
and NGOs.


recent years the ‘non-commercial’ legislation had been substantively refined
but problems still exist.  The issue of
collecting donations via non-banking agents, such as mobile phones or terminals
into which cash can be paid, has not been resolved. Neither the basis of nor
the procedure for including an NGO in the list of foreign and international
grant giving organisations, whose grants are not liable to profit tax, has been
defined in law. A similar situation exists regarding the list of foreign and
international grant making bodies whose grants to individuals are not liable to
income tax. Two different terms for ‘volunteer’ are used interchangeably in
Russia. The legislation concerning restricted capital is incomplete as is the
section on NGOs in the federal civil code which is under consideration in the
Duma. Furthermore it is essential to revise Article 31.2 of the NGOs Federal Law No 7, dealing with
registers of socially oriented NGOs in receipt of support, which in its present
form misleads both officials and NGO staff. Ilya Chukalin, deputy director of
the department of strategic management (programmes) and budgeting in the
Ministry of Economic Development of the Russian Federation said there was no
need to maintain a register of all socially oriented NGOs or to include
information about organisations that have consulted ministries and departments.
The article ought to oblige officials to make information about the provision
of state help to NGOs, whether it is financial or provided in kind.


Chukalin also said that top managers in Russia were not free to take decisions
about charitable involvement on their own. Corporate bodies had to make
donations out of net profits and these were controlled by the shareholders. The
ministry of economic development proposed that donations be included in the
category of ‘non-operating expenses’ up to a maximum percentage of the
company’s annual income. If the suggested amendment were to be in force today,
the budget would lose 30 billion roubles in receipts (according to the Union of
Russian Industrialists and Entrepreneurs, companies give 150 billion roubles to
charity annually – the tax being levied on profits at the rate of 20%). On the
other hand, for every rouble not paid in tax the voluntary sector receives
four. This means that Russians will gain from the expansion of companies’
charity budgets.


Federmesser, president of Faith, a
charity that aids hospices, said that a further problem relates to the Amendments to Particular Provisions of the
Legislation of the RF in connection with Improving the Legal Status of the
State (Municipal) Institutions Federal Law No 83
. State owned institutions
like hospices, children’s homes and refuges for parentless children are in fact
prohibited from accepting charitable donations.


Lev Ambinder, director of the Russian Aid
which is sponsored by
publishing house, mentioned that charities are still not allowed
to part-finance medical treatment out of public funds where a quota does not
cover the actual expenses. The first deputy chair of the committee of the
federation council on constitutional legislation, legal and judicial issues,
and the development of civil society, Boris Shpigel, expressed readiness to
adopt many of the amendments mentioned.


chair of the council of the not-for-profit partnership Lawyers for Civil Society, Darya Miloslavskaya, proposed that in
addition to improving the legislation, an ‘inventory’ should be taken of
voluntary organisations. Since the Charitable
Activities and Charitable Organisations Federal Law No 135
was enacted in
1995 a significant number of organisations had been registered.


*Kommersant is a newspaper.






Get involved

Share This