Russian Business Reluctant to Donate

By Galina Stolyarova

The St. Petersburg Times

Published: June 27, 2012 (Issue # 1715)

Being forced to donate kills the pleasure of sharing. This was the sentiment expressed by Russian businessmen Friday at a panel discussion on the peculiarities of Russia’s attitude to charity at the 16th St. Petersburg International Economic Forum.

The country’s businesses may be seeing their profits soar, but bosses have shown little inclination to share their increasing wealth with the country’s poorest, weakest and most vulnerable.

“Perhaps the number one challenge for entrepreneurs in Russia is that the government finds it acceptable to dictate who we should give money to, when we should do it, and how much,” said Ruben Vardanyan, president of Troika Dialog Group. “This makes businessmen a bit uneasy. After all, they pay taxes, and the thing is, are they really obliged to do anything else?”

Why can’t the government give them a fair deal on charity? This was the question that appeared to bother the businessmen the most during the debate, which brought together prominent artists, heads of charity foundations and successful entrepreneurs from Russia and abroad.

It is still difficult for most Russian businessmen to stop looking at charity as something that could potentially bring in a profit, and many still have a long way to go before being able to look at it in any other light.

“At the moment, doing charity is not profitable; the government needs to make it attractive for companies if it wants them to be seriously involved,” said Stanislav Kuznetsov, senior vice-president of Sberbank Russia.

The foreign panelists tried to help their Russian counterparts view charity from a different perspective.

“Doing good is part of your image, the impression that you produce,” said David Jones, global CEO of Havas, a communications group and the co-founder of the One Young World foundation. “A good image is a reasonable enough investment, isn’t it?”

Dennis Nally, president of PricewaterhouseCoopers professional services, said charity is not so much about a company as it is about a person.

“In Russia, each person spends an average of $20 on charity, while in the U.S. this figure is $1,000 per person — this difference is worth thinking about,” he said. “ In Russia, about 20 percent of people have participated in a charitable project, while in the U.S., the figure is 62 percent. In the U.S. most money for charitable programs is collected through fundraising programs from individuals.”

Comparing charitable organizations in Russia and the U.S., Nally mentioned the issue of transparency.

“It is not enough to make a prominent actress the face of a charity in order to make the organization successful; if its work is not visible, this charity does not have a great future,” he said. “If you are not prepared to account for every penny that you spend and disburse, your project will go under.”

Kamran Elahian, chairman and co-founder of Global Catalyst Partners, a technology-focused venture capital company, said that recipients should always be involved in charity projects.

“If you sponsor a computer class, get the school involved — even if it’s only by contributing furniture,” he said. “When they themselves invest in it, even if the proportion is less than 1 percent, they will relate to it personally and will nurture it,” Elahian said.

Still, a fundamental issue for Russia remains that entrepreneurs need a reason or motivation to donate.

Elahian recalled a personal experience of visiting a refugee family in Palestine near the Gaza Strip to illustrate people who are capable of sharing and being generous.

“There were about 25 people living in one room and their poverty was shocking, but their smiles were genuine, their enthusiasm for overcoming hardships was admirable and their desire to offer me a meal was a most touching experience,” he recalled. “I couldn’t help comparing their hearts to that of a billionaire I know. This guy could only talk about ways to earn another billion bucks. And I thought, what a miser, what a deprived person, what a wretch. Really, the world is not what is in your pocket, the world is what is in your heart.”