USAID and the new law

Maria Chertok, Director of CAF Russia, tells ASI about the future of the non-commercial sector in light of the Act ‘on foreign agents’ coming into force on 21 November (Federal Law ‘On amending certain legislative acts of the Russian Federation in terms of regulating NGOs that act as foreign agents’), and the suspension of USAID activities.

Correspondent: Under the decision of the Russian government, USAID must suspend activities in our country before 1 October. How is this going to affect Russia’s NGOs?
M.Ch.: On the one hand, you could say that closing down USAID is a political move. The deportation of USAID on a diplomatic level ties with the continuation of the campaign to discredit the West’s financial help. It is clear that even if the USAID office is closed down, it is likely that Washington will continue to directly finance the organisations that they have built long-term relationships with. In this case, there would not be any reduction in financial donations, however this help could be viewed as politically motivated, and become an additional risk for NGOs receiving it. On the other hand, speaking about the role USAID played for Russia, apart from financial help, the organisation implemented complex development projects, including those in Russia’s regions. We participated in three of those projects: ‘Helping Russia’s orphans’, a joint programme with the Sibir-Ural Aluminium Company and a social programme in Krasnoyarsky Krai. These projects only became possible with the help of the Russian USAID staff, and the results are visible to this day, including in changes in regional government policy. It is sad that the non-commercial sector and the social field, through USAID, will lose opportunities to implement complex measures to restructure social services provision and promote socio-economic development in the regions.

Correspondent: What other foreign foundations/organisations may be closed down in Russia?

M.Ch.: Organisations like USAID, with great government resources, great manpower, and international connections are practically extinct in Russia. For example, the UN has never implemented any large-scale projects in Russia; our country is not a UN priority. That’s why it is time that local Russian donors and initiatives take centre stage. In addition, the funds allocated from the government budget to support NGOs are substantial. Another point to remember is that it takes time to identify ways to implement the programme; after an assessment has been completed, the programme should run in full force.

Correspondent: In September the Duma approved increasing fines for NGOs to up to 1,000,000 roubles for failure to submit or delay the submission of information on NGO activities to government authorities. Nonetheless, non-commercial organisations are always reporting to the government.

M.Ch.: This measure, without a doubt, puts additional pressure on those NGOs that would come under the ‘foreign agents’ legislation. Those that would not want to be listed as ‘foreign agents’ are facing financial risks when receiving grants from abroad… I can understand those NGOs’ point who intend to disregard this Act, but this is not the path I would chose for my organisation. For us, it is more important to state our protest by continuing to do our work. CAF Russia abides by the law, even if some of it appears absurd. It would be fair to say that this particular Act does not affect us – we are a British organisation, and the Act only affects Russian NGOs.

Correspondent: After the Federal Act ‘on foreign agents’ came into force, many foreign organisations working in Russia may face closure; consequently, some NGOs will lose grants. How is the non-commercial sector going to keep afloat?

M.Ch.: Only a very small number of Russian NGOs receive funds from the West, those mostly involved in human rights, biodiversity, HIV, and infrastructure, in total about several dozens, perhaps a hundred. This is a crucial time for them – as they may have to look into other sources of income, some may have to change their direction altogether. Other NGOs, on the other hand, have never received any financial support from abroad. They are supported by private donations, work with local sponsors, and are supported by government subsidies and grants. The issue of keeping afloat has aways been relevant for NGOs, and not only those in Russia.

Correspondent: Which legislative initiatives can help sustainable functioning and development of the non-commercial sector?

M.Ch.: If you step away from politically conditioned initiatives, a positive trend is emerging in improving Russian laws for NGOs. For example, the government is discussing introducing tax credits for corporate donors; this legislation may become a great step towards increased financial support for NGOs. Only two years ago neither federal or regional programmes to support NGOs existed. The government is not actively discouraging NGOs, however the latest legislation does negatively affect them.
Correspondent:  The Ministry of Economic Development of the Russian Federation are promising to  develop and present a road map on NGO development in the near future; this will allow non-commercial organisations to receive credits when renting office space and applying for loans.

M.Ch.: Is it necessary to have the road map developed by the end of this year? It is more important to do it well, and consult experts from the non-commercial sector. The main question is, how do we envisage the third sector in 10-15 years’ time? What are our goals? I don’t think the NGO sector has developed such a vision yet, and that’s why there is a possibility that this vision may be imposed ‘from upstairs’, taking into account the tight deadlines for the completion of the road map. I think in our sector it is crucial to develop this long-term vision, this way we can be equal partners to the government in developing this road map, as well as other initiatives.

Correspondent: CAF Russia conducts yearly charity rating research. This rating is based upon private monetary donations, volunteer input, ‘good samaritan’ attitude. What place has Russia taken? Which points are we ahead on?

M.Ch.: In 2010, when this rating was first put together, Russia took 138th place out of 153. in 2011, we came 130th. Of course, these results tell us that we have a lot to learn still. Close to us come countries of the FSU, with whom we share a history of post-Soviet development. In this sense, our attitude to charity is conditioned by our mentality. Russia is way behind on private donations to NGOs. Organisations involved in developing charitable work must focus on developing ways to collect donations form citizens and the citizens’ willingness to donate. To encourage private donations, we have to raise people’s awareness of current needs, which NGOs help with. The organisations themselves should publicise their activities through social networks and media. In addition, it is important to simplify the donation process. For example, allows anyone to easily donate money electronically to an NGO in need of help. And of course, there has to be a way to donate instantly, via text messaging. Today, this mechanism is not currently regulated by legislation.

Correspondent: In the West, it’s easier to donate, is that why charities thrives there?

M.Ch.:  There are many factors vital for the development of charities in the West; these include upbringing and education, a simplified tax system for NGOs, and the fact that the majority of social services are provided not by the government, but by NGOs. But following western models blindly is not an option for Russia. We should learn from models and develop our own system for NGO sustainability.

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