Russian NGOs: the funding realities

Continuing oDRussia's debate on the future for Russian NGO funding, now a view from the coal face. Pavel Chikov is chair of one of the country's most respected NGOs: he argues that foundation grants remain the simplest way to let human rights activists get on with their work. 

In January the Russian Presidential Human Rights Council held an informal meeting to discuss the latest changes to Russian NGO law. At the meeting a representative of the Russian Ministry of Economic Development stated that according to Ministry figures, the country’s voluntary sector would lose 13 billion roubles in 2013 as a result of the ‘Foreign Agents’ law - the amount NGOs would have received from foreign and international funders who have decided, or been forced, to wind up their operations in Russia.

'Membership of the OECD is important to Russia, not only to enhance its economy and international relations but to boost its general credibility as a global player. But one of the conditions for entry is that the candidate country can’t be in receipt of any foreign aid.'

Over the last few years the Russian government has been systematically squeezing out international organisations, citing in justification its wish to join the OECD. Russia first applied for OECD membership in 1996, but was turned down. In 2007 the OECD set up meetings with the BRIC countries, Indonesia and South Africa to discuss their possible entry. Membership of the organisation is important to Russia for many reasons, not only to enhance its economy and international relations but to boost its general AA as a global player. But one of the conditions for entry is that the candidate country can’t be in receipt of any foreign aid.

This is the main reason why Moscow has been frantically winding up the activities of international NGOs, including WHO, UNESCO, the UN Development Programme, organisations fighting AIDS, TB and malaria and many others. Even as it expelled USAID in September 2012, the Russian Foreign Ministry explained that this was not just a question of the agency’s meddling in Russian politics, but that, ‘Russia is now one of the world’s “new donors” and rejects the status of a recipient of foreign aid.’ I have heard similar things from government officials from several European countries that have also been forced to discontinue their funding of programmes in Russia.    

How does Russia’s voluntary sector fund itself?

As a result, the financial state of Russia’s voluntary sector has worsened over the past few years, as it has been impossible to make up this drop in income with funding from other sources. NGOs’ main sources of income within Russia are government grants, crowd funding, support from business and their own commercial activities.

Government funding for Russian NGOs began in 2006. The selection process was organised initially through the RF’s Public Chamber, and more recently through a number of grant giving bodies. The sum initially allocated was 500m roubles (£10m) a year, which has since been regularly increased and in 2013 stands at around 3.5bn roubles (£70m) (a poor replacement for the 19bn roubles it would have been receiving from international sources). The main problem with this funding is that its allocation is inefficient and lacks transparency. I have heard dozens of stories about provincial officials hastily registering new NGOs just before a funding round and promising them a grant in return for a kickback of up to 70% of the sum. In fact very few applications are received. Valery Fadeyev, editor in chief of the pro-Kremlin business weekly ‘Expert’ and chair of one of the grant-giving bodies, told Vladislav Surkov, the then deputy head of the presidential administration, that ‘most of the applications we receive are crap’.

AGORA made applications for government funding, but after being turned down each time we gave up.The Moscow Helsinki Group and the ‘For Human Rights’ movement have had several government grants, but no one will convince me that this was not done for purely PR reasonsIn 2006, 2007 and 2008 the Russian human rights watchdog AGORA, which I head, and several of our regional partners – prominent civil rights organisations in their local areas – made applications for government funding, but after being turned down each time we gave up. The Moscow Helsinki Group and the ‘For Human Rights’ movement have had several government grants, but no one will convince me that this was not done for purely PR reasons: ‘Look, we even give grants to people who criticise us, so it’s all above board!’    

Does business come up with the goods?

NGOs rarely receive any funding from business. When they do, it comes from trusts set up by major commercial organisations, such as the Mikhail Prokhorov Foundation or the Vladimir Potanin Charity Foundation. Anatoly Chubais and other prominent businessmen have also given grants to the voluntary sector, but their chosen recipients are usually engaged in ‘vanilla’ – socially orientated and very conformist – activities. Large scale educational and civil rights projects would inevitably run into conflict around government policy issues, given the regime’s insistence in maintaining its monopoly in this area. And the fate of Mikhail Khodorkovsky’s Open Russia foundation, forced to close down in 2006 (I was one of those made redundant by its closure), is still fresh in the minds of both big business and the main players in Russia’s voluntary sector.

In state owned corporations the writing off of profits ‘to charity’ is a traditional dodgy practice. In 2008 the ‘Vedomosti’ business paper published an article entitled ‘Uncontrolled Billions’, in which it stated that Transneft, the company which transports more than 90% of Russian oil, had donated over 7 billion roubles, about 10% of its annual profit, to charity. Aleksey Navalny, the lawyer and opposition politician, decided to look into this more closely, and wrote to all of Russia’s largest charitable foundations and other NGOs to ask whether they had been the beneficiaries of this largesse. Not one of them had had a penny. Transneft itself did not reply to Navalny’s query.

Businessmen have also given grants to the voluntary sector, but their chosen recipients are usually engaged in ‘vanilla’ – socially orientated and conformist – activities.... The fate of Mikhail Khodorkovsky’s Open Russia foundation is still fresh in the minds of both big business and the main players in Russia’s voluntary sector.

At a local level, if businesses give money to NGOs, they prefer to do it in secret, in cash and on trust. No responsible manager of an organisation can rely on such support for its core funding.

NGOs’ commercial activity is on the same minimal level. I don’t know of any organisation that could exist and develop civil projects on its commercial revenue. At best, it can earn a small income by renting out its own premises, as has happened in Kazan, where the Civil Rights centre received a grant from the MacArthur Foundation in 2008 and used it to buy a small house in the city. Or take our AGORA Association, which in 2007 set up a small online news agency (http://openinform.ru/ ) which, with advertising, brings in less than $10,000 a year. This at best covers the organisation’s core costs. To make the project actually profitable would require a lot of investment; we would have to change the site format and lose our own information platform, and concentrate our resources on commercial activity.    

Funding by the crowd  – can private donations keep NGOs going?

Many people in the voluntary sector see crowdfunding as the revenue source of the moment. They talk about Aleksey Navalny’s projects; established volunteer initiatives such as Liza-Alert, which tracks down missing persons; Rosuznik, which supports people arrested during protest actions and ‘Olga Romanova’s Wallet’ which collects money to stage protest actions, as well as many charities helping disabled children. The readiness of Russians to put their hands in their pockets to support a good cause has risen sharply in the last two years. It grew in parallel to the growth of civil consciousness and the mood of protest, as well as the awakening and coming together of the so-called ‘creative class’, which was already at the end of its tether with the regime.

This public support for voluntary initiative is undoubtedly a really important development and a sign of a healthy, maturing society. It needs to encouraged and developed in every way to create a tradition of transparent accountability, self-regulation and self control, with the outlawing of crooks and an increase in efficiency. The only problem is that there is not a single NGO team that can survive exclusively on donations from the public. Sergey Vlasov of Rosuznik has a paid job as well. Aleksey Navalny pays his project staff out of donations, but both he and Vladimir Ashurkov, who heads the Foundation for Fighting Corruption, have other sources of income that allow them to carry out their political activism pro bono.

Public support for voluntary initiative is undoubtedly a really important development and a sign of a healthy, maturing society. The only problem is that there is not a single NGO that can survive exclusively on donations from the public.

For Russia-wide organisations such as Navalny’s anti-corruption site RosPil, the AGORA Association and Rosuznik to fund a solid professional team with basic facilities and the means to travel around the country, they would need an annual budget of between $200,000 and $500,000. At present, the only person who might just attract that level of donation is Navalny, and even then, how many people are going to make a large donation to someone who is under investigation on several criminal charges and whom the regime sees as the main threat to its stability?

AGORA had its first large donation in the summer of 2011, when the ‘Voina’ radical street art collective (which formerly included members of Pussy Riot) gave us the  €10,000 ‘Innovation Prize’ money they received from Moscow’s National Centre for Contemporary Arts for its project ‘A Dick captured by the FSB’, (a painting of a giant penis ‘erected’ on St Petersburg’s Liteyny Bridge and revealed as the bridge opened to allow river traffic along the Neva). The money is still lying, almost untouched, in our bank account, being saved for a rainy day. Unlike restricted funds, which need to be spent within a specific time on a specific project, this money is unrestricted and can be spent whenever, and on whatever, we need. There are also a number of people who put money into our account on a regular or irregular basis, and over the last couple of years we have received altogether about $20,000 in private donations. 

Just a few days ago the Federal Financial Monitoring Service blocked an initiative by the Ministry for Economic Development to allow Russians to pay subscriptions to socially orientated NGOs through ATMs, on the grounds that NGOs might use the money to finance terrorism.

Until now AGORA hasn’t pushed the idea of raising money through donations, and I now regret this a little, since I am sure we could have raised a decent amount. For the moment we are holding this approach in reserve. We are continuing to build ourselves a reputation, which we will convert pretty soon into systematic crowd funding. But even this, on its own, will barely allow us to make ends meet, even before we think about all the risks and complications associated with this income source. ‘Digital wallets’ may still not be registered as legal entities, and individuals also can’t accept donations – this is the exclusive privilege of NGOs. Cash collections run up against very strict regulations on the handling of money, and text donations involve extortionate charges from mobile providers. And in Russia only global operators like the WWF can set up a convenient system of donation through banks that avoids people having to turn up with ID cards, fill in a form by hand and stand in a queue to donate. And that’s without the risks of harassment by pro-Kremlin activists, not to mention police officers who will be only too happy to accuse you of some kind of financial fraud.

Just a few days ago the Federal Financial Monitoring Service blocked an initiative by the Ministry for Economic Development to allow Russians to make donations to charitable organisations or pay subscriptions to socially orientated NGOs through ATMs, on the grounds that NGOs might use the money to finance terrorism (sic!).

In other words, the present system of application/selection/grant/report, as long as it concerns a respectable, known institution with a solid reputation, remains the optimal arrangement for established Russian NGOs, both in legal and organisational terms. Its only (well-publicised) disadvantage is that if the institution in question is a foreign or international one, the NGO’s image may be tarnished among that section of the public that is influenced by stereotypes. But that’s no big deal, if it allows us to get on with our work. 

About the author

Pavel Chikov is chair of AGORA, an association of human rights organisations based in Kazan. Since 1999 Chikov has been a leading human rights lawyer and head of a number of Russian human rights organizations in Moscow and Kazan