Life with red flags: How CSOs work in 2022
What are the risks emerging in the sector right now and what can be done about them?
On 1st March, a forum of philanthropists and patrons organised by Forbes Congress Russia was held in Moscow.
The current state of the Civil Society Organisation (CSO) sector.
Elena Topoleva, Chairman of the Commission for the Development of the Non-Profit Sector and Support of Social CSOs and Director of the Agency for Social Information (ASI), cited an ASI study on factors affecting the stability of CSOs conducted last year.
According to the results, almost half of the organisations identified lack of resources as their main challenge. In the same study, the leaders of CSOs pointed out what could have caused them to cease their operations. Among other things, the “disaster factor” was highlighted. This could include a national crisis, a hostile takeover, bankruptcy, a political decision to close the organisation or the introduction of legislation that prohibits their access to resources or premises.
“According to the heads of the organisations, every second CSO’s flow of income was reduced during the Coronavirus outbreak. Unfortunately, the current economic situation may now lead to new risks of resource deficit, from private to corporate funding.” Says Topoleva.
The study has also indicated that some CSOs have formed a safety cushion in savings or a reliable team. Additionally, organisations have increased their fundraising proficiencies, learning how to attract new donors and diversify sources of funding. Generally speaking, the sector as a whole has built up a margin of safety.
Life with red flags
What problems do Civil Society Organisations face every day?
Primarily, legislation continues to weigh down CSOs and entail huge costs, alleges Svetlana Makovetskaya, Chairman of the Permanent Commission for the Development of Civil Society Institutions of the Presidential Council for the Development of Civil Society and Human Rights.
On one level, changes in financial reporting rules require CSOs to constantly improve their legal literacy. However, any changes in legislation have a harmful effect on organisations because they are poorly coordinated by the state.
“In essence, everyone is under the same legislation, but everyone interprets it in their own way, at their own risk. Some may be registered as “foreign agents” while others may not, despite having the same work and funding. Self-censorship emerges. This is a situation in which an organisation raises its own red flags.” says Makovetskaya.
According to expert opinion, the sector will continue to flag itself and negotiate the boundaries of acceptable conduct. In doing so, additional risks arise in interpreting laws when no one can fully understand what a particular legal act means. As a precaution, the sector uses this to justify limiting its activities to “flagging” and defending itself, instead of doing its job.
According to Alexander Losev, CEO of Sputnik Capital Management, there is no need to be afraid of being a philanthropist, but potential donors need to be very careful in assessing the current political situation. The ideology behind philanthropy encourages charity, so the task of CSOs now is to get the message across to the authorities that they are doing the right thing.
The New Wave forum of philanthropists and patrons is held by Forbes Congress Russia in Moscow. The Forum brings together the heads of charitable foundations and organisations, as well as socially responsible corporations, entrepreneurs, CSO representatives and pro bono volunteers.
Translated by Ysabelle Smith