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Image: Efim Erichman

Trouble for charities

Fiona Clark, Moscow
July 19, 2015

Tough economic times and a law that labels organizations that receive funds from overseas as foreign agents is taking a toll on charities, writes Fiona Clark in Moscow.


Sometimes you can see a perfect storm forming. A law that calls those who receive funds from outside the country 'foreign agents,' an economic downturn that's seen the market contract by 10 percent with no end in sight and on top of that, sanctions that have seen the value of the ruble plummet to, depending on the day, anywhere between 25-50 percent of its former value. It's a dangerous combination if you're a charity, as Dmitry Zimin, the founder of one of Russia's largest telecommunications companies has found.

Back in 2002 he started a foundation called Dynasty which supported science students and projects. His belief was that Russia's strength and future lay in the sciences and he put his considerable wealth where his mouth was and this year was set to dedicate some 435 million rubles (7 million euros) to supporting projects in that sphere. But, he made a mistake. He kept his funds off shore and has now found himself in rough seas: labelled a foreign agent.

Likening the move to having someone "spit in your face" the benefactor has decided he's not going to come to a Russian court and defend himself against the allegations, instead he'll simply stop funding the projects and the losers will be Russian science and science students.

"Harmful" law

435 million rubles is no small amount and for the first time some people who are close to the government are saying out loud that this law is akin to cutting Russia's nose off to spite its face.

The head of Russia's main business lobby, Alexander Shokhin, told Business FM radio, "If NGO's like this end up on the list, there's something wrong with the legislation." And President Putin's former finance minister, Alexei Kudrin, tweeted that the law was "harmful."

For Shona McGrahan, who has spent many years' working on a voluntary basis for various charities in Moscow, the rot began with the foreign agent law but the economic downturn has made life that much harder again. The foreign agent law meant making serious administrative changes to various charities structures which included transferring funds into local Russian trusts. Many of the people who'd had a long time involvement in running the charities simply gave up because it became too difficult and as such experienced people were lost from the causes they'd once wholeheartedly supported.

In other parts of the country, programs, like those that provided safe sex education to sex workers in St Petersburg, simply shut down.

Since that law was introduced in 2012 the economy has taken a downturn. That's left charities that were already worrying about where they stood legally now worrying where the next ruble is coming from. The International Women's Club's (IWC) co-chair in charge of charities, Katalin Dióssi, says the fund raising committee has had to work harder to come in on target. The IWC supports 17 different charities in and around the Moscow region. They include feeding the homeless, treatment for burns victims, supporting orphanages and providing education for those who are about to leave the institutions so they can find good jobs.

Fundraising difficulties

Dióssi says the international community is continuing to support charities but they are having to broaden their base and attract newcomers as the level of donations drops or as previous benefactors pull out.

"We never had much in the way of corporate donations. Rather it was embassies, the diplomatic community and private individuals. Some embassies are pulling out so we will try to attract new ones. This way we hope to keep up the level of funds."

Some of the charities the IWC supports are facing tough internal decisions themselves in terms of the programs they provide or the number of staff they employ.

hand holding hospital grip Copyright: Efim Erichman, Moscow
Charities are struggling to help those in needImage: Efim Erichman

One charity that helps educate orphans who are about to leave their institutions is said to be considering cutting staff and as such the number of classes it provides. Another which supports and orphanage for disabled children is wondering if it will still have enough funds to pay for visits by physiotherapists who have managed get previously bed ridden children out of cots and on their feet and walking.

Skyrocketing costs

And then there's the triple-whammy of the severely devalued rouble. "Vera" (which means "Faith") is a charity that supports the terminally ill and their families. It provides in-home care and equipment like ventilators to terminally ill patients so they can get out of intensive care and go home. It also helps pay for the treatment and accommodation costs for families with children in hospital and has 30 hospices across Russia that are currently caring for more than 300 families. But its PR spokesperson, Elena Martyanova, says they too are under pressure to make ends meet as the weaker rouble has meant prices have skyrocketed.

"The cost of the medical devices and machines that we buy for children with incurable diseases (such as ventilators, wheelchairs intended for patients with severe neuromuscular disorders) has risen considerably with a price hike from 30 to 50 percent," she says.

But because Vera is helping very vulnerable people the charity has decided not to reduce the amount of aid it supplied but instead to redouble its efforts to raise funds. "This year we have to bring in twice as much money than in the past, about half a billion rubles."

That's a very big sum of money, especially in a tightening economy. And it seems ludicrous that those who do have deep pockets, like Zimin, are now forced to withdraw their generosity due to poorly drafted laws.

Zimin said the move was a type of blind patriotism from a country that can't tolerate criticism and won't learn from its mistakes to improve its lot.

One of his beneficiaries, bioengineer Michael Gelfand, said it showed "the authorities themselves can no longer control their own machine for keeping control." Either that "or they believe everything that moves or breathes has to be crushed."

And in that case, it is Russia's most vulnerable who are first in line.

woman in theatre copyright: Fiona Clark
Fiona Clark writes regular columns for DW from MoscowImage: DW/F. Clark

Fiona Clark is an Australian journalist currently living in Russia. She started her career with the Australian Broadcasting Corporation as a TV news reporter in the mid-1980’s. She has spent the past 10 years working on publications such as The Lancet and Australian Doctor and consumer health websites. This is her second stint in Moscow, having worked there from 1990-92. What was to be a two-year posting is still continuing.

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