Interview – Vladimir Potanin

Alliance magazine

‘For me philanthropy is about legacy, so leaving a legacy means that I would like to make sure that our support to a certain area produces change for the better. We work with leaders because they are the ones who create this legacy.’

In 2010, Vladimir Potanin – one of the wealthiest people in Russia, founder and owner of the private investment company Interros, a major shareholder of the Norilsk Nickel Company, and founder of the first charitable foundation in Russia, the Potanin Foundation – made a public commitment to give the majority of his wealth to philanthropy. Why did he make this decision, Maria Chertok asked him. And why has he decided to join the Giving Pledge?

You are a first-generation philanthropist: you made your money in your own lifetime and have publicly declared your intention to leave the majority of your fortune to charity. You are also a pioneer in Russia: you decided to do this in a country where no one else had done it. Why did you decide to do this?
I am deeply convinced that any legacy makes a very serious impression on the heirs. In a way, it defines their destiny. It is true in a historic perspective, and it is true now when children inherit assets, money or other material values: inCredit Sergey Andrianov this case children have to commit themselves to running the family business. And the bigger and more complex the business, the less chance they have to choose their own path in life. On the other hand, there is an issue of motivation and responsibility. If you inherit considerable capital, you will probably not be motivated to win your own bread, and that is not good. People should be motivated, they should struggle to achieve something and properly appreciate that. What comes easily is not valued.

When relatively young people inherit a large business they may not be mature enough to make decisions that affect the lives of many people or influence the economic situation in whole regions or countries – that’s the responsibility issue for me. So when people are young and it is time for them to decide what they want to do in life, if they know they will receive a fortune, they probably will not make any decisions but will just sit and wait to become rich. So leaving a large material legacy to children doesn’t appeal to me from any point of view.

You have said publicly that ‘there won’t be an inheritance of your fortune’. Do you worry about how to transmit your values to the next generation?
Sure, all parents want their children have values and be ready to fight for them. We should allow our children to be like us but also be different. I would like my children to share my values but also I make a special effort to remember that what matters is that they learn to make their own decisions and feel that they are independent from me. It is important to let them go and let them get out of their parents’ shadow. The more successful and affluent parents are, the more difficult it is for children to become standalone individuals.

I am lucky with my two eldest children – they both chose professional careers in sport, and this is an area where a person can only achieve something with persistence and hard work and by making their own decisions. Sport allowed them to shape their own relations with friends, coaches, judges, competitors. Sport is a model of life, maybe a bit simplified, but it has its rules, and playing by these rules allowed them to find their place in life. With my younger son, who is now 14, it is also very important that he discovers his own path and learns to make his own decisions.

What are the key areas your foundation is supporting, and why? 
We mostly work in the areas of education and culture. We often say to ourselves that we would like to support leaders – those who can change the situation, show a way to others. That’s why we select the best students, not those in most need. We select the best museums, not those in the worst condition. This is at the heart of our approach because support to leaders helps to tackle systemic problems.

This does not mean that as a person I am not inclined to charity, but I see a big difference between human compassion, when you help someone who would be lost without you, and philanthropy, which is supposed to achieve systemic change. It could be a very local change, in a community, small town or village, or bigger players can have an ambition to achieve change in a whole country or a big area like culture or education.

For me philanthropy is about legacy, so leaving a legacy means that I would like to make sure that our support to a certain area produces change for the better. We work with leaders because they are the ones who create this legacy. Also psychologically it is more interesting to interact with strong players. Given that philanthropy in Russia is perceived as something between praying for forgiveness for one’s sins and insincere attempts to please the government, I would like, at least at the personal level, to get satisfaction, feel a positive response, a flow of positive energy, back from those we support, see that they achieve something.

The foundation website puts a lot of emphasis on the way you approach things. It says your programmes will ‘aim to have long-term impact; be based on transparent, open competition; and be led by independent Expert Committees in each area’. Is this part of consciously trying to raise the bar for foundations in Russia, and to counter government and public suspicions about them?

You are right, we are very conscious about the process. This is a way of publicizing our internal reflections. If philanthropy is about systemic change and legacy, rules are very important – both for ourselves and for our current and potential recipients. This is a conversation about how philanthropy should be done.

I don’t believe that it is possible to change attitudes to philanthropy in general and individual philanthropists in particular in a short moment of history. Unfortunately, the view of philanthropy is hopelessly prejudiced, but still in the last 15 years there has been a lot of improvement, and awareness of why people give and what it is all about has grown. But the negative attitudes, including mistrust and the feeling that rich people acquired their wealth unfairly, are very strong.

There are many reasons for that, the main one being a deep division between rich and poor. It is still very hard for a rich person who gets engaged in philanthropy to prove to society that he does it voluntarily and out of good intentions rather than to please the government or pay back a fraction of his unfairly acquired wealth. I am afraid this cannot be achieved. You can’t knock down a wall with a pea-shooter, so publication of our procedures on the website is unlikely to solve this problem. We need a much longer time horizon here.

I also believe it is very helpful to our potential grantees. A good example is our museums programme. When they see that rules are there and they are working, they are stimulated to conform to them, they feel comfortable coming to our grant competitions, we have a better choice of projects to support, we learn more about the museums; at the end of the day, we have a better-quality programme.

Credit Sergey AndrianovThe Potanin Foundation and you personally have been active in supporting the development of giving and philanthropy in Russia for many years. What do you think are the main priorities in the short and long term in this area?
Tactically, a number of things need to be done: improvement of the legislation, including the framework for endowments; improvement of reporting, registration procedures, etc; sharing of best practice; stimulating people to give and developing the technological base for giving – clarifying the rules for electronic payments in particular. I am sure that these issues will be resolved sooner or later.

I am more concerned with strategic issues. First, it is important that giving should become a norm, go beyond the circle of rich people and big corporations, become a normal practice in people’s life. By the way, it would help to bridge the gap between the rich and those who give in a small way or volunteer. I think it is very important, so all the systemic work that CAF Russia, our foundation and others do is a contribution to this process of making giving a matter of public consensus. The road is straight here and you have to keep putting one foot in front of the other. The bad news is that we may not see our efforts bearing fruit in our lifetimes, but we should still do it.

My second concern is the role of the state in this process. There has come to be too much state involvement in our life and in the economy. It was always the case, but at some point in time there were signs of an emerging civil society – of an acceptance that people should be in the habit of getting together to solve their own problems and only delegate to the state those functions that they are unable to perform themselves – and this is what the state should encourage. But the current trend is that the state – not just in Russia – is trying to control civil processes. When the state ignores civic initiative or aims to regulate it, it starts catering to its own interests rather that the interests of its citizens. I appreciate that there are new challenges – economic crisis, environmental problems, terrorism – that require more centralized response and regulation, but still this regulation should not replace society and its institutions. I apologise for this long tirade, but giving is part of the civic process, and the more space is taken by the state, the less space is left for philanthropy.

The same applies to business: the bigger the role the state plays in the economy, the less space there is for entrepreneurship. We should aim for more people to be engaged in giving, to a society that is appreciative and a state that supports this process through fair regulation. In the last decade we seem to have made a move away from this path.

Do you see your business and philanthropic activities as closely connected or completely separate?

There is a certain internal conflict in this for me. I would like to see them totally separate. Business is a way to earn money, it is a profession. Philanthropy is about soul, about legacy, about paying back for the fact that you are who you are – with great power comes great responsibility. But this does not work. I don’t work in isolation. There are people around me and there is public opinion which does not separate one from the other. Even if it does not carry the negative connotations that we talked about earlier, the attempt to separate a businessman from a philanthropist fails. A businessman is by definition more visible than a philanthropist – there are very few exceptions to this rule. It is much easier to achieve success as a businessman than as a philanthropist – first one needs to earn money by doing business and only after that can one start giving it away, so the public perceives philanthropy as a consequence of business. They appear inseparable – but maybe if this is a general opinion it is the right one?

Do you find that approaches you take in business are also useful in the management of the foundation?
Absolutely. If you are a businessman, it means that you have the skill to achieve results with the resources available. In business the result is profit; in philanthropy it is to deliver good to the recipient. In business it is in a way simple: you invest money, you get your return. The more you get as a return, the more successful you are. In philanthropy, it is not that obvious: you did something, but to what extent have you achieved the result? That’s why in philanthropy, where the criteria are blurred, this key competence of a businessman – to achieve a result – is in even greater demand. So a good businessman will apply this skill even more persistently – to make sure that the money or services or other efforts reached the target, to understand where the process was not ideal and how it could be improved. I believe business skills for a philanthropist are even more important as the business of philanthropy is harder.

You have recently joined the Giving Pledge. Why?
There are a few reasons for my joining Gates and Buffett’s initiative. First of all, it is natural and comfortable for me as I made the decision to leave my money to charity many years ago. Second, when Bill invited me to join, I found it a good opportunity to support him in his intention to widen the initiative beyond the US. I believe the Giving Pledge is a sacred cause worth supporting. Third, this is the most visible initiative of this kind, and it is a good chance for me to promote Russian philanthropy and my own views. All in all, it is a great initiative which needs supporting internationally and a great platform to promote what I do.

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