Russian firms in no hurry to cut charity budgets
6.12.2016
Such was the conclusion reached by the authors of a report on “Leaders in the corporate charity sector in 2016”, noting that social programmes carried out by big business had been less affected by external sectoral changes. Companies have shown they are able to adapt to difficult circumstances and are in no hurry to cut budgets, preferring to protect projects by using different ways of mobilising resources.
“Corporate charity leaders” is an annual project organised by the Donors’ Forum and an international network involving the audit and consultancy firm, PricewaterhouseCoopers and the business newspaper “Vedomosti”. The aim of the project is to identify, promote and replicate best practice operated by socially responsible companies in the charity sector; to promote the principle of business social responsibility and to develop Russian philanthropy. The “leaders” report includes research on corporate charity which has been carried out using specially prepared methodology in the form of company rankings and charity programme competitions. Sixty national and foreign companies with an annual turnover of more than 100,000,000 roubles operating in Russia took part in the project during 2016.
According to the report’s authors, companies have increasingly turned to organising grants’ competitions which allows them to improve the quality of their “project selection” process as well as maximising the number of applications from interested parties. It also enables companies to extend the geographical coverage of their charitable work, gradually closing the gap between the number of programmes that receive the most and the least charitable support from federal districts.
During 2015, companies demonstrated a different level of preparedness, not only by talking about projects they’d implemented but also by sharing experiences and being involved in the development of the sector. Corporate websites and the media are the main vehicles for disseminating information on social activities undertaken by businesses which is usually updated several times a month.
Project experts also observed an increased interest in programme evaluation. Companies have begun looking for ways not to reduce the volume of aid but to improve its effectiveness in a variety of ways. The use of evaluations has also led to a noticeable growth of professionalism in the sector, say the researchers.
In general, the authors noted that concerns relating to serious and swinging cuts in charity budgets and realignment of priorities which had forced donors to reduce project numbers had not been practically addressed.
“Research showed that 2015 had posed significant challenges to both the business and non-profit sectors, with companies’ attention focused on maintaining and adapting existing charity programmes. This year has seen the external environment stabilise somewhat with people getting used to new circumstances and talk of improving the success and effectiveness of social programmes gradually replacing the anti-crisis rhetoric”, the study says.
“An important thing to note here is the emergence of a group of national corporate philanthropy professionals who have been involved in the project. Most take part in competitions year after year, safe in the knowledge that by participating in the project, being willing to discuss their business practices openly and sharing their organisational and management experiences in social investments they are seen to be at the vanguard of the sector as current leaders in the world of corporate charity”, said Alexander Voldyrev, Executive Director of the Donors’ Forum.
An analysis of the record number of campaigns disclosed in their financial reports has revealed that businesses spent nearly 20 billion roubles on charity during 2015, enough to fund 56 campaigns. More than a quarter of companies provided around 74,000,000 roubles; a quarter spent more than 334,000,000 and a further 25% less than 16,000,000. The “top dog” was the “Noryl Nickel” firm which spent 7 billion roubles on their own charity projects.
The companies that were high in the rankings were those that had previous project involvement, as well as having a proven strategic approach to charitable work and well-developed corporate social responsibility systems. First place was taken by “Sakhalin Energy”, with the “Siberian Coal Energy Company” and AFK “System” finishing second and third respectively, the latter having been winners in the 2012 project.
As well as the overall rankings, prizes were awarded in the competition for categories traditionally set by project partners. For example, finishing third in the Ministry of Economic Development’s category for “Best programme for promoting the development of NGOs’ charity and volunteer infrastructure in a region where a company operates” was “Nestlé Russia” with a project called “Caring for the older generation” in Rostov-on-Don. The company also received a special award for the openness of its information.
“Nestlé Russia’s” corporate social responsibility based on the principle of “Creating common values”, is not just a business project but an integral component of the company’s operations and an important facet of its philosophy”, said Olga Prokhoda, Head of Social Projects at “Nestlé Russia”. “We greatly admire the expertise and experience of the expert panel members, so being recognised as a leader in the annual rankings is particularly important to us. I’m sure this success will be a constant source of inspiration to us!” she added.
A number of new categories were introduced in this year’s competition, including one chosen by the “Blagosfera” Centre on “Best programme aimed at promoting the values of charity in society”. Prizes for finishing joint second in this category went to “Noryl Nickel” with a project on “A world of new opportunities” and to the Mail.ru group, in collaboration with the “Public Opinion” charity, for research into providing help to adults in Russia. The competition’s organiser decided not to award prizes for first and third place in this category.
Natalya Kaminarskaya, Director of the “Blagosfera” Centre, said that “Noryl Nickel’s” project was aimed at energising and enthusing local people living within its operational area by involving them in new and different kinds of activity.
“The grants’ competition, the provision of training for social entrepreneurship and organising events are all designed to increase the number of people who understand the meaning of and principles involved in social planning. A company can very successfully bring together NGO best practice, as well as having high quality business tools to develop the content and attract additional support from the authorities and the media. It’s worth focusing attention on involving people of all ages, from pre-school children to the elderly, as well as things like specially created comics and setting up an office for social design”, said Kaminarskaya.
Another new prize awarded by the “Evolution and Philanthropy” NGO was for “Best methodology for evaluating social outcomes of charity projects and programmes” and was won by the company “Arkonik Russia”. 2015 was recognised as International Evaluation Year which was instrumental in increasing general awareness of this particular facet of corporate governance. A special prize for project assessment methodology went to the international brewing company “Heineken”.
“Evaluating the social impacts of charity provides a sound basis for achieving increased effectiveness in the sector and is a means of finding out whether your charitable work is really benefitting people and society. It’s also a mechanism for acquiring the latest knowledge and fundamental in being able to make sound strategic and operational decisions”, said Olga Evdokimova, Director of “Evolution and Philanthropy”.
You can find out more about the results of the “Leaders in the corporate charity sector in 2016” report via the Donors’ Forum website: www.donorsforum.ru
