Spotlight on business in Russia - From sweets at Christmas to corporate foundations

Does corporate social responsibility exist in Russia? What are the main differences between Russian philanthropists and their foreign colleagues? Why do Russian businessmen give in kind?

It is next to impossible to answer all these questions in a short column, but we’ll try to present the main features and tendencies of CSR in Russia. In doing this we’ll use the results of a recent survey on corporate philanthropy in Russia carried out by CAF Russia.[1]

The survey covered 200 Russian companies (large, medium and small) in four cities – Moscow, Saint Petersburg, Novosibirsk (the capital of Siberia) and Nizhny Novgorod (the capital of Privolzhye region). All those that responded do carry on some sort of philanthropic activity. There is a general opinion that Russian businesses still mix philanthropy and sponsoring, but according to the survey 86 per cent of companies recognize a clear difference between the two.

Moving from theory to practice, companies generally seem to think that the conditions for philanthropy in Russia are still far from ideal. An unfavourable tax regime and economic problems are identified as the main problems.

Despite these problems, Russian businessmen are trying to implement a range of different projects and programmes with the aim of helping others. Why do they do it? Respondents gave a positive image for the company and altruism as the primary reasons.

What do companies support?

The main area where companies are ready to offer support is the social one. This is understandable given the situation in Russia today. Among the most popular forms of help are those that were favoured in the Soviet period. Good examples are factories buying presents for children from a specific orphanage for many years, or giving food packs to their own veterans /pensioners. This is a long-standing tradition of so-called podshefhye (‘under the patronage’).   

Almost half the companies that responded run projects in culture, science or education. Somewhat unexpectedly, one in three supports a religious organization. Comparing Russian with world philanthropy, it is rather sad that the most unpopular theme is the environment.

The respondent companies have been involved in corporate philanthropy for varying periods of time. Although the average time for starting to become involved is 1988-89,  almost half mentioned the lack of any long-term programme. Comparing different regions, companies with a well-developed strategy for their corporate philanthropy are most likely to be located in Moscow.

Different forms of CSR

Many different forms of corporate philanthropy are represented in modern Russia, though by no means all the well-developed models that can be found throughout the world. Two companies out of three prefer single actions. Buying sweets for orphans at Christmas is a typical example.

It is interesting to analyse the CSR activities of the remaining third of companies that have a well-thought-out strategy and see CSR as a permanent activity. Sixty per cent said that their company prefers to give the company’s own products to charity. Another popular approach is to give straight financial support (54 per cent of companies). One out of four mentioned donating free consultations, premises or equipment as an example of philanthropy activity. Only one tenth use grant competitions, though there are good examples such as Rosbank’s ‘New Day’ programme. For several years the bank has been running a grant competition for different organizations that work with children. YUKOS, one of the largest oil companies in the world, also has its own grant programme to support social initiatives in several Russian regions.

Many companies have started to support community foundations (CFs) – a concept that appeared in Russia less than five years ago. YUKOS is now funding a project to create CFs in the regions of its operations. In general the CF model is becoming more popular in Russia, with 15 CFs established so far. In the cities of Togliatti and Pervouralsk, for instance, most local corporations already implement their charitable projects through funding the CF’s grantmaking activities or establishing named or donor-advised funds.

A more sophisticated stage of CSR is creation of a corporate charitable foundation or a private foundation by the head of the company. Only one fifth of respondents have such a foundation. Again, this is most likely to happen in Moscow, where about 30 per cent of the capital’s companies already have their own foundations. Some of them run a whole range of programmes, such as Vladimir Potanin’s Foundation (the foundation of Interros Holding Company).

1 This was part of a project financed by the Ford Foundation. A team of professional sociologists from the Russian Centre for Public Opinion and Market Research (VCIOM) was selected to conduct it.

Ekaterina Levshina is Corporate Services Manager at CAF Russia. She can be contacted at ELevshina@cafrussia.ru