Russian charitable organisations have been hit hard by the recession, according to the first research into the impact of the economic crisis on Russia’s charitable sector.
According to “Philanthropy in the Context of Crisis”, a report by CAF Russia, Zircon Research Group, PricewaterhouseCoopers and the Russian Donors Forum, 61% of Russian charitable organisations say that their funding has dropped as a result of the recession. Also, 52% say that they have already lost a quarter, or more of their funding.
The report is based on a survey of 440 non-governmental non-profit organisations (NPOs), 36 companies and 11 foundations. Although it found that the majority of NPOs were prepared for the crisis and are adapting their plans to enable them to carry on their work in these difficult financial times, 23% of those surveyed think they are likely to close as a result of this recession. Nine per cent think they may have to become state, or municipal owned institutions to survive.
Government funding and income from membership fees have remained the most stable sources of income, and corporate donations have fallen the most.
Most organisations are not optimistic about funding: 81% of those surveyed expect funding to drop further. At the same time, fifty nine per cent of organisations had experienced an increase in demand for their services as a result of the recession.
Maria Chertok, Chief Executive of CAF Russia, said: “In 1986 Russia only had 20 NPOs. Today there are more than 217,000. They are playing a key role in helping society through the recession and are ambitious to do more. Half of them (51 percent) intend to expand the scope of their services despite the current financial climate.”
The Russian Government has just approved a concept paper on the development of philanthropy and volunteering in Russia which it plans to implement by the end of 2010. This was developed alongside a number of sector experts, including CAF Russia.
The paper sets out plans to support tax benefits for companies and individuals at state level: currently such benefits are only available at a regional level in two of the 83 Russian regions.
The Government also plans to introduce a tax exempt status for public benefit NPOs in relation to profit tax and VAT.
Maria Chertok commented: “The recession started later in Russia than in many other major economies but charities in Russia have already been severely impacted.
“This recession is the first for the fairly new philanthropic and NGO sector and it will be a trying time for charities and donors who are still to prove their commitment to philanthropy. The support that the Government intends to give will play a crucial role in strenthening the sector – both economically and through demonstration of their appreciation of the role the sector plays, but we need them to implement these changes quickly and consistently.”
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