Russian charities hit hard by the recession

1 September 2009

CAF RussiaNearly two thirds (61 percent) of Russian charitable organisations say their funding has dropped as a result of the recession and over half (52 percent) say they have already lost a quarter or more of their funding. These findings come from the first research, on the impact of the recession on charities in Russia and are published in “Philanthropy in the context of the economic crisis” - a report by CAF Russia, Zircon Research Group, PricewaterhouseCoopers and the Russian Donors Forum.

The report, which is based upon a survey of 440 non-governmental non-profit organisations (NPOs), 36 companies and 11 foundations, found that the majority of NPOs were prepared for the crisis and are adapting their plans to enable them to carry on their work in these difficult financial times. However, nearly a quarter (23 percent) of NPOs surveyed think they are likely to close as a result of this recession and nine percent think they may have to become state, or municipal owned institutions to survive.

Corporate donations have fallen most with Government funding and income from membership fees remaining the most stable. The majority (84 percent) of NPOs are expecting funding to drop further and the 59 percent who reported a growth in demand for their services likely to feel the most stretched.

Maria Chertok, Chief Executive of CAF Russia, said: “In 1986 Russia only had 20 NPOs, today there are more than 217,000. They are playing a key role in helping society through the recession and are ambitious to do more. Half of them (51 percent) intend to expand the scope of their services despite the current financial climate.”

NPOs, companies and foundations were united in the view that the State can play an important part in developing philanthropy in this period of crisis.

The Russian Government has just approved a concept paper on the development of philanthropy and volunteering in Russia which it plans to implement by the end of 2010. This was developed alongside a number of sector experts, including CAF Russia. The paper sets out plans to support tax benefits for companies and individuals at state level – currently such benefits are only available at a regional level in two of the 83 Russian regions. The Government also plans to introduce a tax exempt status for public benefit NPOs in relation to profit tax and VAT.

Maria Chertok said: "The recession started later in Russia than in many other major economies but charities in Russia have already been severely impacted. This recession is the first for the fairly new philanthropic and NGO sector and it will be a trying time for charities and donors who are still to prove their commitment to philanthropy. The support that the Government intends to give will play a crucial role in strengthening the sector – both economically and through demonstration of their appreciation of the role the sector plays, but we need them to implement these changes quickly and consistently."

Philanthropy in the context of the economic crisis report >>


Notes to Editors

1. Research was carried out with 440 NPOs, 36 companies and 11 foundations between April and May 2009.

2. The survey was carried out with financial support from the Matra Programme of the Royal Netherlands Embassy.

3. There are 248 branches of international NPOs in the country.

4. CAF Russia is part of the Charities Aid Foundation Group a registered charity. CAF has offices in America, Australia, Brazil, Bulgaria, India, Russia, South Africa. Internationally CAF supports charities by working with donors, companies and charities to increase the value and impact of giving. They do this by providing products and services that make giving easier, tax efficient and easy for donors with global philanthropic programmes.

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