Carnegie Reporter, Vol. 3, No. 1 | Philanthropy in Russia: New Money Under Pressure, page 5

Family Foundations Emerge
In a sense, one could say that the Foundation for Cultural Initiatives combines the models of corporate (targeted at the area of corporate presence) and private (strategic) philanthropy with another emerging model—the family foundation. There are currently three family foundations functioning in Russia: one is Dobry Vek, founded by SUAL director Viktor Vekselberg and his wife, Maria Dobrynina. It has a budget of about $200,000 a year and supports projects related to psychiatric issues and research. Dobroe Nachalo, a Tver-based foundation, founded by Dmitri Zelenin and his wife, supports a variety of activities and projects in the Tver area, northwest of Moscow. But the Dynasty Foundation is by far the largest and most ambitious of the three now functioning. It was established in 2001 by Dr. Dmitry Zimin and his son Boris Zimin. Dr. Zimin, a physicist by education and specialist in radio electronic technology, started his business, VimpelCom, from scratch in 1992 and built it into one of the leading Russian wireless telecommunications companies. In 1996, VimpelCom became the first Russian company since 1903 to be listed on the New York Stock Exchange; its “BeeLine” cell phone service now has over 10 million subscribers in Russia.

Zimin timed the creation of the Dynasty Foundation to coincide with his retirement from active management of the company at age 70. Dynasty provides between $1 to $1.5 million a year in scholarships, awards and postdoctoral stipends for Russian students engaged in fundamental research in the exact and natural sciences. The foundation also supports publications and events that popularize Russian science. Though Dynasty’s focus is on the sciences, it also gives to groups working with at-risk children and their families to prevent adolescent homelessness.

“I believe that philanthropy is an inevitable process for a businessman,” says Zimin. “You have to give something back. We have a far-reaching idea—to raise the level of intellect in the country. We were fortunate in finding a structure we could work through.” The Foundation for Fundamental Research administers most of Dynasty’s programs, though the foundation is also working in partnership with Eurasia and other foundations. As the “elder statesman” of the new Russian philanthropy, Zimin has been an active participant in conferences and seminars promoting corporate social responsibility and the development of civil society values among the business community. Following Khodorkovsky’s arrest—which he views as a disgrace—his participation in joint philanthropic projects has become particularly important, and he will be the only Russian donor on the board of the New Eurasia Foundation, which has been recently formed and is headed by Kortunov (with support from OSI, the Charles Stewart Mott Foundation, the Corporation and others). “The thing that’s different for me,” Zimin has remarked, “is that I’m the oldest—all the other Russian philanthropists are young, in their 40s. I think my greatest achievement, besides building the company, was to know when to retire.”

Implications for the Future
Despite the government’s considerable efforts to depict it otherwise, Khodorkovsky’s arrest is seen by most of the press, business community, human rights organizations and leading Russian cultural figures, as a political act, a warning to Russian enterprise. Not only has Open Russia funded human rights organizations that have rankled the presidential administration, but Khodorkovsky personally had begun to fund opposition political parties in the lead-up to the March 2004 presidential elections. It is widely thought that the company is being deliberately driven to bankruptcy so that the government may acquire a controlling or at least blocking interest in it, and so Khodorkovsky, with his civil society allegiances and political ambitions, is removed from the company’s ownership structure. Analogies have been drawn with the way in which Vladimir Gusinsky, (founder of Most Bank and NTV, Russia’s first independent television station) and the journalists who originally created NTV, were systematically driven out through a series of engineered “business conflicts,” bankruptcies and selective jurisprudence (Gusinsky now lives abroad), and controlling blocks of stock turned over to government-friendly stewardship.

Whatever their personal political views may be, businessmen fear the greater repercussions for the Russian economy and foreign investment. Recently, even Russia’s foreign economic partners have begun to speak out on the subject. About the actions taken against Yukos and Khodorkovsky, European Commission Director General for External Relations, Eneko Lanaburu, said in late July, that: “We interpret this as a decision of President Putin to destroy an economic empire that had certain strategic goals of political influence…. What’s happening is essentially a settling of accounts.”¹ Certainly, some of Open Russia’s beneficiaries have taken the political warning to heart: earlier this year the Russian State Humanities University (RGGU) was poised to sign off on a deal in which they would have received $100 million from Khodorkovsky and Yukos over a number of years; then the RGGU’s board suddenly rammed through a change in their by-laws that would have deprived the donors of any fiscal control whatsoever. The deal fell through.

“What we are seeing,” says Arseny Roginsky, director of Memorial, “is the ‘governmentalization’ of philanthropy and charity in Russia.” The same view is echoed by many others, including Kortunov and Alexeeva; “Yukos was a warning,” says Kortunov, “that the government sees corporate and private philanthropy as a ‘voluntary obligation,’ a sort of forced tax: if business has extra money, then the government will tell it what to support.” Others suggest that the government sees “philanthropy” as a way to “patch up holes” in the federal budget, particularly for essentially charitable social aid programs. Activities of the sort supported by Potanin and Dynasty have been received with approbation by the Russian public and government alike. But among businessmen and NGOs, it is taken for granted that the Khodorkovsky affair means that no Russian philanthropic foundation with a far-reaching social agenda—i.e., one targeted at the development of civil society— will be allowed to exist without the blessing of the president and the presidential administration. Some subjects—education, children’s welfare, health and culture or donations to state cultural institutions (like SUAL board chairman Victor Vekselberg’s recent $90 million purchase of the Forbes collection of Russian Imperial Easter Eggs)—are considered safe territory. Others, such as Chechnya, the environment and human rights, are not.

This “governmentalization” of philanthropy is entirely in keeping with what has been the hallmark policy of Putin’s presidency: establishing a vertical power structure in Russia, i.e., making sure that different sectors of society toe the government line. The current situation has made for what might seem strange bedfellows, forging an alliance (or at least a platform of common interest) between human rights and civil society activists on the one hand, and big business on the other. Human rights and civil society activists have held round table discussions with business leaders and other civic professionals on the issues and ramifications of the Yukos and Khodorkovsky affairs. These two utterly disparate social groups with extremely different pre-1991 backgrounds both have a vested interest in a country governed predictably by the rule of law rather than by personal or administrative whim and retribution.

The effect of the government’s actions is having a chilling effect that continues to ripple on. The work of Open Russia, for example, has already slowed down and there are fears that it will eventually have to close its doors. That prospect comes at a very inopportune time for civil-society-oriented NGOs in Russia. Soros has basically closed down at this point, and many foreign donors are in the process of conceptualizing or implementing their “exit strategy” from Russia. (New Eurasia, for example, will become a Russian spinoff of the Eurasia Foundation, with $25 million in seed money coming from USAID alone). Memorial announced recently that its project of recording the names of all the victims of Stalin’s purges could be seriously held up by the lack of Open Russia funds.

Given the extraordinary growth of Russian philanthropy and charity over the last few years, perhaps even this severe blow could be eventually absorbed—as long as Yukos doesn’t go bankrupt, throwing 70,000 employees out of work, and oil production and the economy into a tail spin. And as long as the government’s recently submitted draft legislation increasing controls on NGOs and requiring the registration of every foreign and Russian grant with a special commission does not pass as proposed. Attention to matters of corporate social responsibility has been massively increased. It seems certain that Russians, particularly the country’s wealthiest individuals, will continue to fund projects in a wide range of activities, even though, for the time being, their funding choices will be carefully calculated not to offend.

1 Quoted in RFE/RL NEWSLINE Vol. 8, No. 142, Part I, 28 July 2004.

Jamey Gambrell writes on Russian arts and cultural politics; her articles have appeared in The New York Review of Books, Art in America, The New Republic and other publications. From 1995-1997 she served as deputy director for programs at the Open Society Institute, Moscow, where she worked with Russian staff to develop culture and media programs. Gambrell also translates Russian literature; her books include Earthly Signs: Moscow Diaries 1917-1922 (Yale University Press, 2002) by the poet Marina Tsvetaeva, and Tatyana Tolstaya’s novel The Slynx (Houghton-Mifflin, 2002).