Maria Chertok, director of CAF Russia, was recently honoured with a decree from Russian president Dmitry Medvedev recognizing her contribution to the development of civil society and participation in the work of the Public Chamber’s Commission of Philanthropy. What does this mean for her and for the future development of philanthropy in Russia, Caroline Hartnell asked her.
Could you tell me a bit about the recognition from the Russian president? What did you actually receive?
It is just a decree from the president that’s put on the Kremlin website. It has the names of all seven of the informal group of sector experts that supported the Commission of Philanthropy of the Public Chamber. We kind of expected a meeting and some hand-shaking but it never happened. I would quite like to have something to frame and put on the wall, but so far I haven’t got anything. Maybe one day!
Despite the lack of a certificate, I imagine the recognition is still quite significant for the development of civil society and philanthropy in Russia.
Yes, I think first of all it’s a recognition that the development of civil society is of value, so people who contribute to it should be appreciated. Second, notably these people are not bureaucrats, they’re not coming from the government; these are completely independent people. Two of the people on the list – the director of the Russian chapter of ICNL [International Center for Not-for-profit Law] and myself are from international organizations. This is quite a big thing because international organizations still meet a lot of hostility. So altogether it’s quite a positive sign. It may not lead anywhere but still …
Is the very hostile legislation on international NGOs still in place?
Yes, it is. The biggest problem is with grants – only those international donors that are on the government list can call their donations grants, and there aren’t many on the list. I think there are 11 foundations that are expecting to be included but nobody knows if it’s going to happen at all. The problem is that if a foundation that’s not on the list calls its donations grants, the recipients of those grants have to pay profit tax on them.
Is CAF Russia on the list?
No but it doesn’t matter. What we give as gifts we call donations and it works equally well; we don’t bother with ‘grants’. But it matters a lot for US private foundations that need to call their donations grants for IRS purposes. I don’t think things will change fundamentally for international organizations. US foundations should start calling their grants donations so that recipients don’t end up like the unlucky grantees of the Ford Foundation who now have to pay profit tax.
And if they called it a donation they wouldn’t have to pay? Doesn’t that seem a bit stubborn?
They have their own reasons but I do think that it’s a bit stubborn, because in the end grantees suffer because they don’t get additional funds for paying the taxes.
If there were to be benefits for Russian organizations, as opposed to international ones, what might you be hoping for?
Over its first four years, the Commission of Philanthropy achieved a lot in terms of changing the legislation and, more importantly, changing the attitude of the government. We have a whole programme of suggested legislative changes, which include tax deductions for donors and VAT exemption for NGOs taking on state contracts. We are confident that these changes will happen eventually. The problem is that the approach is a bit piecemeal − some things get resolved, some things don’t, and there is no system and no long-term vision for sector regulation. It all depends on how well certain groups lobby for particular amendments and how the government reacts to them. Sometimes things just get overlooked, and sometimes those minor details really matter at the end of the day.
But in the long run, you’re optimistic that this is a good sign?
Yes. Life shows that change doesn’t happen quickly, but we are moving in the right direction.
Maria Chertok is director of CAF Russia. Email email@example.com
1 On 2 June the set of tax amendments which includes tax benefits for individual donors was submitted to the State Duma for adoption; it is expected to come into force from 1 January 2011.