Monday, March 2, 2009

From Russia With Love And Fear

Having attended a conference in China in November and two weeks ago in Russia, I have gotten a somewhat unique glimpse into a couple of completely different worlds from our own. In China, Jet Li used his star power and influence to bring together many nonprofit leaders from around the world, as well as high level Chinese business and government leaders. A 500 person, shiny new auditorium could hardly hold the attendees and the media was swarming the place. Jet Li has set as his goal to spur philanthropy in China and worldwide with his one dollar a month donation from every person on the planet. Jet's high profile, pragmatism and dynamism mixed with humility, appear to be getting things moving in spite of the challenges of the Chinese political system.

In Russia, there were no celebrities, only 5 international representatives, no one from the Russian government and very limited business representation. I think there may have been a couple of reporters. About 100 people showed up and sat in an old and somewhat worn out looking auditorium. The primary goal announced at the conference was to spur the development of a countrywide media campaign called, "It's That Simple." The message: Giving is a very simple thing to do.

In all of this, you can see the difference in culture and energy. Whereas China seems to be taking steps forward (albeit still in the early stages), Russia is still at the starting gate. In China, they are talking about how to give, in Russia they are talking about the idea of giving. The symbol for the Russian campaign is a heart that you make with your hands. I remember thinking how ironic it was that the heart was empty inside. The problem that was noted at the conference is that many of the Russian people are very cynical and skeptical about the nonprofit sector. They believe that it has lots of corruption and that it is more the role of government to take care of things (at least on an organized level) rather than nonprofits. The campaign is meant to begin to push back against that attitude.

From what I heard at the conference, there really is a significant problem with bad apples in the nonprofit barrel. Since there is so little regulation, there are no clear guidelines on what can and can not be done. Therefore, some people have created charities as their own personal money tree (sound familiar?). At the same time, the government has a pretty adversarial relationship with the sector. What little regulation there is discourages growth of the sector. The seminal moment in all of this came for me when one of the participants from a human rights organization said that, "Transparency of nonprofits" (which was the main topic of the conference), "is not a good idea when it can be used for social control by the police state." Wow! That really blew my mind. I realized I was on the other side of the world in more ways than one.

My impression is that the Russian nonprofits are ambivalent (to say the least) in relating to their government. Some of the speakers countered the human rights advocate by saying, "Tell us how the government will use transparency of nonprofits against us?" However, the fact that they were even debating this point is a real nonstarter for development of the sector! I understand that on day two in one break out meeting, participants almost came to blows during the debate. On the one hand, they need government policy and regulation to foster and encourage the development of the nonprofit sector. To achieve this, the nonprofit leadership would need to work closely to advise and guide the government to get to the right result.

On the other hand, do they want to get all cozy with a "police state"? Can they do so even if they want to? I was told privately that the government is wary of them because of the risk of an independent voice on issues related to human rights and all things political. What an irony that the theme of the conference was transparency in a country that has so little of it. I suspect that Russia's nonprofits will be lumbering along at slow speed for quite a long time to come, short of major political change. How sad for the people who need their help. Once again the trip deepened my awe at the breadth and depth of the nonprofit sector in the USA.

12 comments:

Anonymous said...

Thank you for this report. Russian people can be very generous on a one to one basis as shown in the case of the young cellist whose neighbors surprised him with a gas stove to heat his room so he could practice his instrument. They had passed the hat among themselves.
I don't blame them for being suspicious of transparency in an organized charity after living under the eyes of *kagy-bear*. (KGB)

Ken Berger said...

Anonymous,

Good point. Indeed it was noted by many, whom I spoke to at the Moscow conference, that there is a spirit of giving. However, as in China, it is most often done one-on-one with people who are friends, family or neighbors.

The heart is there, however it is not manifest (to any significant degree) in an organized fashion.

Patrick Maguire said...

Does contributing result in tax consequences in either country?

Ken Berger said...

Patrick,

My understanding is they do not have any tax incentive for donating to charity in either county. They both desperately want it. This speaks volumes to those who claim that a reduction in the charitable tax deduction will not have consequences here!!!

Ken

Sofya said...

Ken, your comments are insightful yet not surprising at all. As a nonprofit professional from Russia who has worked on capacity building projects with local and national nonprofits, I would encourage you to take this conference with a grain of salt.

There are a handful of well-respected nonprofits, like the NGO School Foundation, the Forum of Donors or Charities Aid Foundation Moscow that work hard to promote the institution of individual giving in Russia. Their networks are composed of highly motivated organizations and individuals who do and not debate things.

There is also a large number of nonprofits that have little experience in the field and are led by talentless, although maybe quite passionate, staff. It is the lack of experience, knowledge, great examples and best practices that makes people feel safer at talking, rather than doing.

You are right, there is very little tax incentive to give for individuals, but they can take a deduction for their charitable contributions up to 25% of annual income. However, non-rich citizens do not have to file taxes in the way Americans know it, so the whole idea of itemization of deductions is "a dark forest" as Russians would put it. Corporations, on the other hand, have no tax incentives at all.

I would be pleased to share my research and thoughts on the subject with you. You may also want to consult the archives of the International Center for Not-for-Profit Law, they had a few publications on this topic.

Ken Berger said...

Sofya,

I would be quite interested in learning more about your work. Please email me at kberger@charitynaivgator.org with contact information. Thanks!


Ken

Coco said...

A comment on tax incentive in China

Hi Ken, you're quite right to some extent that there is actually very little tax incentive to give for both individuals and corporations in China. But according to tax laws, individuals who donate to qualified organizations can deduct up to 30% of the taxable income, while corporations can deduct up to 12% of the total annual profits. However, many individuals and companies are not aware of this at all, or do not know how they can get deductions. Plus, not all registered nonprofits are qualified to receive deductible donations. So, like you said, tax consideration is not a motive for people to give in China.

I also watched your video series from 2008 Global Philanthropy Forum in Beijing. It is interesting to see a discussion like this about the trust, accountability and transparency in the nonprofit sector in China. It is certainly a great thing, especially for true nongovernmental organizations, but frankly, I think, it is gonna take a long time to see "real" increased transparency of GONGOs in China.

Ken Berger said...

Coco,

To operate a charity in China you must have a government representative that sponsors you (on the Board?). So that really puts a damper on things. I agree that China has a LONG way to go too!

Ken

Anonymous said...

in 1979 I spent several months in Russia teaching English in a friend's English Language School. It was in a mining town three days train ride from Moscow. When the people learned that I spent my own money to come there and was not being paid to teach they did not understand why I would do such a foolish thing. I see from your article that volunteering and giving to nonprofit organizations is in about the same stage as it was 10 years ago. There is still a great need there.

Ken Berger said...

Anonymous,

I believe you can see the fundamental difference between our political systems. Unless the fundamental structure of the Russian system changes, the charitable sector is unlikely to thrive.

Ken Berger said...

Dear Ken,

Some time ago we have tried to comment on your blog that is devoted to our conference and a conference in China. You have touched upon a number of very important and significant things for us. That is why I ask you, on behalf of my colleagues and the conference's organizers, to help us with publishing our commentary (see below) beneath your article.
Thank you in advance!

Sincerely,

Maria Olshanskaya
Conference Manager
Agency for Social Information


Dear Ken,

Thank you for your sincere and plain report on our conference. It is valuable for us but we believe that you see wrong some major items.

It’s a pity that you had to leave the conference so soon and perhaps for this reason couldn’t realize its purpose to the full extent. We deliberately brought together ONLY NGO people to discuss - without external witnesses - how to increase public trust in NGOs, how NGOs could become more transparent, accountable, responsible and effective in communications with external stakeholders. We intentionally chose “domestic” format of the conference, where Russian (mostly) regional NGOs can share their practices and discuss challenges. We designedly made choice of “an old and somewhat worn out looking auditorium” in order not to spend too much money that we had got from our donors in the hard times of economic crisis for renting a conference venue. By the way, this “worn out” venue is a historic building with “a good report” where things are always humming.

It’s a pity that you interpret the symbol of our campaign “It’s that simple” as an empty heart. We see it quite differently - a heart as a frame to embrace all good deeds of people who want to become volunteers and donate their time or money to good causes through NGOs. I could tell you that the campaign which only started three months ago has already become popular among many Russians, and they like the symbol.

You are partly right when you describe the differences in NGO and charity development in China and in Russia, but your analysis seems to be quite simplified. I am not going to make it here myself, I just want to say that judging on the level of charity or NGO development in a country (!!!) only from a very quick glance of a conference speaker who spent in this country half a day is not right.

And finally, you are completely right when you tell about the difficulties that Russian NGOs face. I am sure that with your level of expertise and experience in NGO and charity development you wouldbe able to help us to understand ourselves better and move forward with some concrete advice and recommendations. I hope we could continue our discussion.

Ken Berger said...

Maria,

I only wish you and the conference organizers well in your efforts. I think you did a tremendous job under the circumstances.

I appreciate your thoughtful comments and acknowlege that my impressions were based on a very quick visit. However, my fundamental belief stands that there are huge roadblocks in the way of the Russian people moving toward social investing (giving to organized charity with a view toward meaningful outcomes, let alone giving to them at all!) as long as the government controls so much.

Btw, I worry that the nonprofit sector in the US may experience a similar problem the way things are going!

Best,
Ken