Russia: development and sustainability of charity work
How can charity work be developed amid funding cuts, and what does the sector’s sustainability now depend on?
On 7 July, a discussion was held on the question How have priorities changed for Russian philanthropists and corporate social responsibility managers?
Profile of a modern philanthropist
Evgenia Tyurikova, director of Sberbank Private Banking, revealed that 360 billion roubles of charitable donations had been made in 2021. Around 75 per cent of that came from either corporate donations or top-tier philanthropists, while individual donors gave 20 per cent of the total. According to her, while that figure appears to be large, it is in fact disproportionately small compared to the volume of money spent on charity work in other countries.
Data from Sberbank Private Banking on the profile of modern philanthropists suggests they do not publicly acknowledge that they give to charity. They donate to system-wide projects so as to achieve significant results. For them, transparency and evidence of the impact of their donations are particularly important.
“The State hardly provides any support to the charitable sector across the country; endowment funds have only just started. And so in the first instance, the sustainability of the sector currently depends on diversifying the sources from which foundations draw their funding. We would advocate attracting a large number of wealthy individuals to support the sector, as well as encouraging banks and company directors to get involved,” says Tyurikova.
Maintaining employment levels and sustaining living standards
“We’re currently very conscious of the importance of joining up our efforts and prioritising all our projects,” says Yuliya Mazanova, deputy managing director for development and corporate communications at the management company Metallo-invest.
“For us as a major company, it’s crucially important to retain our staff. We raised our employees’ pay in March and are throwing everything we have at maintaining living standards in the regions where we operate. Our social investments for sustainable development this year have topped 5 billion roubles. That includes the basis for regional budgets,” says Mazanova.
The head of brand management for the X5 Group, Galina Sekirinskaya, pointed out that 20 million people are living below the poverty line this year – 8 million more than last year. Food prices continue to rise, which means people carry on getting poorer.
The company has doubled its food aid budget, even though there is almost no help from large donors. How can it attract new food aid funding in this environment?
“At X5, we’ve focused on promoting food-related charitable giving with ordinary customers in our shops. And we’re seeing a great response – normal people who aren’t that rich are ready to help,” she says. “In addition, we’ve started to develop food sharing. Every year 18 million tonnes of food go to landfill, but a huge part of that could go to charity. There are serious legal limitations to this approach – we’re waiting for the government to resolve the issue so we can roll out food sharing across the country.”
Everyone’s monitoring environmental, social and governance indicators (ESG)
Oksana Kosachenko, CEO of Sistema, highlighted that her foundation focuses on sustainable social investment where the key approach could be described as something like “ESG strategy, done by everyone.”
The main priority is currently employees, who have been offered courses on psychological resilience, while equalising the number of men and women in the professions is another stiff challenge.
“We invite our staff to come up with ideas about, for example, how to make life greener. Later, their ideas can develop into an entrepreneurial project or a start-up that the foundation would help incubate. This approach makes it clear that ESG is part of normal life,” says Kosachenko.
What next in developing charitable work?
Irina Arkhipova is deputy dean of the Graduate School of Business at HSE University. “When funding is declining and beneficiary requests are on the rise, there is only one way out – move from one-off projects to systemic work in the social space,” she says.
A serious barrier to that way forward is that social impact assessments are often still not carried out at all or are based on quantitative indicators. However, investors and communities do not care how many workshops a foundation has run or even how much money has been invested in a project. What matters is how each rouble invested solved a specific problem.
Arkhipova is clear: “Almost no one in the sector wants to analyse their work in depth and deploy existing evaluation methodologies. Plus we don’t have enough qualified staff who can tailor work to the limited resources available and invest in the most urgent tasks.”
“Equally, business must move away from one-off projects that have an eye-catching but short-term effect,” she says. “It’s better to reprioritise our limited resources towards a single programme or a single region – that’s how to see real qualitative change in society.”
In her view, the key element of systemic charity work is still the CSO. “Businesses should be even more respectful of CSOs and recognise that they have a better idea of where to invest the funds. CSOs are not contractors; they are the partners of the business world. Everyone will benefit from that sort of joint approach,” Arkhipova says.
The discussion took place as part of the conference Challenges for 2030: sustainable development in the regions. The conference marked the 20th anniversary of the Committee for Sustainable Development and Association of ESG Managers.