russian community foundation study -...

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Russian Community Foundations Study

Report

Submitted to:

Charles Stewart Mott Foundation and Russian Donors Forum

Prepared by:

Monica Patten, Community Foundations of Canada, Ottawa, Canada

Alexey Kuzmin, Process Consulting Company, Moscow, Russia

Vladimir Balakirev, Process Consulting Company, Moscow, Russia

February 2006


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Table of Contents

Executive Summary………………………………………………………………………………... 3

Introduction………………………………………………………………………………………… 6

Chapter 1. Relevance and Context of the Study…………………………………………………… 8

Community Foundations in the Global Context…………………………………………................ 8

Development in Central and Eastern Europe…………………………………………………… 12

Strategic Themes for Community Foundations Around the World……………………………... 16

Development of Philanthropy in Russia………………………………………………………... 19

Chapter 2. Research Methodology………………………………………………………………… 27

Rationale for Making Methods Decisions………………………………………………………. 27

Sampling Strategy………………………………………………………………………………. 29

Data Collection Methods……………………………………………………………………….. 30

Data Analysis…………………………………………………………………………………… 33

Protection of Research Participants and Ethical Considerations………………………………... 33

Strengths and Weaknesses of the Research Methodology……………………………………… 34

Strengths……………………………………………………………………………………… 34

Weaknesses…………………………………………………………………………………… 36

Chapter 3. Research Findings……………………………………………………………………… 39

Emergence and Growth of Community Foundations in Russia………………………………… 39

Russian Community Foundations: Individual Cases…………………………………………… 44

Togliatti……………………………………………………………………………………….. 45

Tiumen………………………………………………………………………………………... 48

Obninsk……………………………………………………………………………………….. 50

Pervouralsk…………………………………………………………………………………… 52

Zhigulevsk……………………………………………………………………………………. 55

Rubtsovsk…………………………………………………………………………………….. 56

Saratov………………………………………………………………………………………... 58

Penza…………………………………………………………………………………………. 60

Oktyabrsk……………………………………………………………………………………... 63

Kaliningrad…………………………………………………………………………………… 64

Chaikovski…………………………………………………………………………………… 66

Nizhni Novgorod……………………………………………………………………………... 67

Angarsk……………………………………………………………………………………….. 69

Kamensk-Uralski, Shelekhov………………………………………………………………… 71

Organizational Structures of the Russian Community Foundations…………………………….. 73

Common Themes………………………………………………………………………………... 75

Chapter 4. Discussion of Findings, Conclusions and Recommendations………………………….. 80

What Is „Community Foundation‟ in Russia?............................................................................... 80

The Core Functions of Russian Community Foundations………………………………………. 86

Developing Funds…………………………………………………………………………….. 86

Making Grants………………………………………………………………………………... 92

Providing Program and Services……………………………………………………………… 98

Raising Visibility……………………………………………………………………………... 101

Sustainability and Strategies of the Russian Community Foundations…………………………. 101

References………………………………………………………………………………………….. 1068


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Executive Summary

In the spring of 2005, we made our first visit to one of Russia‟s 20 community foundations. That

visit to the Togliatti Community Foundation set the course for what was to become an

exploration of the energetic and rapidly growing community foundation movement in Russia,

one stimulated by Togliatti‟s remarkable growth, by the vision and generosity of Charities Aid

Foundation – Russia (CAF-Russia) and by a small but influential group of international donors,

all of whom saw the potential for civil society, including community foundations, as an

important actor in the new Russia.

Throughout the subsequent six months, we studied the organizational structures, the giving and

granting patterns and the leadership of community foundations. We did our work within the

context of a fast growing global movement of community foundations, especially community

foundations in Eastern and Central Europe, and an expanding NGO and philanthropic sector in

Russia. To no one‟s surprise, we found that Russian community foundations have much in

common with similar foundations elsewhere, though are affected by the geography and linguistic

features of the country, which to some extent make it hard to connect outside the country, and

sometimes even within Russia, and by the history and culture of non-profit activity.

Nevertheless, Russian community foundations are actively taking their place in learning events

and meetings around the world, and are beginning to share their experiences with others. As

well, they are developing a network within Russia to provide opportunities for exchange,

learning and inspiration amongst each other.

Overall we found a movement with dedicated leadership. Successful fund development, broad

granting and efforts to promote awareness of the foundation were evident in most places we

studied. In a few, long-term viability is in doubt, while others have clearly become important

and most likely permanent features of community life, provided they continue to build their


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capacities and resources. We suggest that the successful development of community foundations

in Russia is quite remarkable, given that the first was founded only in the late nineties.

In the report we offer a brief profile of each community foundation in Russia. While we are not

in any way evaluating their performance, we did note that each faces some challenges, often

identified by those with whom we met. At the end of each profile is a summary of challenges.

We hope that each foundation will consider them seriously as it continues to develop its own

work.

We note that the profiles, indeed, all our research, reflect a “moment in time”. By that we mean

that we documented what we saw and were told during visits and from our review of data and

statistics. That all occurred between January 1, and July 30, 2005. But as community

foundations are dynamic organisms, we know there has been movement and development since

then. In some instances that has meant growth. In others it has meant identification of new

challenges and attempts to address them. The changes that have taken place since June and will

take place into the future are sure signs that the community foundation story in Russia continues

to unfold.

In Chapter 4 of the report we describe our overall findings in the four main areas of activity:

developing funds, making grants, delivering programs and services; and raising visibility. We

applaud the progress that is underway but suggest that attention is needed in all areas if

community foundations are to grow in size, scale and impact. In particular we propose that

increased efforts in fund development, grant making and planning for the future are necessary.

We offer the following five specific recommendations to community foundations individually

and collectively as they continue to build their capacity.

1) Community foundations build on current efforts to stimulate the culture of giving by

encouraging new donors, including businesses and especially individuals, and increasing

funding levels from existing donors;


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2) Community foundations reach out to organizations to whom they have not previously made

grants so that their granting can have a wider and deeper impact and they can become a

greater resource for addressing community issues;

3) The leadership of community foundations, including the Boards and executive directors,

develop long-term plans that will ensure their ongoing success and the continuity of

leadership at all levels;

4) The Partnership for Community Foundations be supported and strengthened so it can become

a more inclusive resource for emerging and established foundations, and become a more

active participant in global networks, including WINGS;

5) Community foundations, perhaps through the Partnership, continue their efforts to gather and

maintain statistics and data that will tell the individual and collective story of community

foundation development to various audiences, including donors, the media, governments and

other funders.

The study could not have been undertaken without the generous and welcoming cooperation and

participation of numerous people. Chief among them are the Boards, staff, and grantee

organizations in every foundation we visited or talked with. Their willingness to share their

story with us was truly a sign of commitment to their foundation and optimism about their

community. We spoke with various people at CAF-Russia and in the community foundation

movement outside Russia (notable among them was Jana Kunicka, Manager of the Community

Philanthropy Initiative of the European Foundation Centre) and we appreciated the support

offered us in many ways by the Russian Donors Forum. Interpreters made our work easier, and

the project‟s funders were readily available for consultation. We hope that the combination of

resources at our disposal have resulted in a report that will be useful foremost to Russian

community foundations themselves as well as to the Russian Donors Forum, and to others

interested in and supportive of this promising development in Russia.


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Introduction

In the fall of 2004 we were invited to research and document the story of community foundation

development in Russia. At that time there were about 20 community foundations either

established or emerging in Russia, of which 13 were affiliated with the Partnership of

Community Foundations (simply called „The Partnership‟ hereafter), a self-directed network of

community foundations, then in its second year. Both the Partnership and several individual

community foundations were supported by donors external to their communities, indeed, in some

cases, external to the country. That support, in the form of financial grants as well as technical

assistance, including opportunities to learn from and with colleagues in other parts of the world,

was being offered primarily from the USA and Central and Eastern Europe (CEE).

The research was initiated by the Russian Donors Forum, and funded by the Ford Foundation

and Charles Stewart Mott Foundation, both of whom have provided significant leadership in the

development of civil society in Russia. These foundations, along with the Russian Donors

Forum, wanted to understand both the history and the current state of community foundation

development in Russia, and to receive some recommendations regarding the most effective ways

to support future community foundation development. Additionally, they wanted the research to

result in useful ideas for community foundations themselves. The report was to be informational

and forward looking and was not in any way to be an evaluation of individual foundations or the

movement as a whole.

The report that emerged from our research is intended to be helpful, in the first instance, to

Russian community foundations. We hope it will inform donors and supporters as they think

about their future investment in Russian community foundation development, and we would be

honoured if the report finds its way to others who are studying or practicing community

foundation leadership.


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The study was timely. The growth in the number of foundations and, in many ways, in their

level of activity, has been enormous – and all between the years 1998 and 2005. By spring 2005

the Partnership was in the middle of its third year in existence and well into thinking about its

future. And several donors and supporters were thinking about how they could move to the next

phase of support, while others such as CAF-Russia were in the midst of ongoing supportive

programs.

The time was right to undertake such a study for other reasons as well. Community foundations

are continuing to emerge all around the world, with new funders and supporters for their work

stepping forward. Community foundation leaders and thinkers are gathering in various settings

to think about the future of the field. And new opportunities for learning from one another at

conferences and through exchanges are presenting themselves, allowing for the concept to be

shared and adapted, and for leaders in community foundations to be inspired and motivated by

peers in many corners of the world. This study gave us the opportunity to think about Russian

community foundations in that rapidly growing and changing context.


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Chapter 1. Relevance and Context of the Study

Community Foundations in the Global Context

The “Community Foundation Global Status Report” (Sacks, 2005) describes the rise in numbers

and the location of community foundations around the world, proposes some rationale for the

rapid growth in numbers of foundations, and offers a good sketch of foundation development in

many countries and regions. But to date very few studies have looked in detail at one country, at

its development and potential, and only one has looked at Russia: “Community Foundations in

Russia: Philanthropy between Tradition and Rebirth” (Hinterhuber and Rindt, 2004). So, while

our research is intended to be of help primarily to Russian community foundations as they plan

for their future, and to those who support community foundation growth in Russia, we hope our

report will add to the growing literature about overall community foundation development.

Our report begins with and will build upon the earlier reference to the rapid growth of

community foundations around the world. Thus we can situate Russian community foundations

within the context of the rapidly expanding universe of similar foundations in almost every

region of the world. Indeed, even in countries like the United States and Canada, where

community foundations have existed since 1914, some expansion and growth is still occurring.

But that growth is outstripped by the rapid development of community foundations in countries

that are often described as being „in transition‟, and that are renewing a focus on civil society.

Consider the following:

- Community foundations exist in 46 countries and number 1175 in total;

- Of that total, 274 are outside the USA, Canada and the UK;

- The growth in countries other than the USA, Canada and the UK represented a 24%

increase over 2003.


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The 2005 “Community Foundation Global Status Report” (Sacks, 2005) suggests that

community foundations possess a set of characteristics which are largely universal (itemized

below), though notes that every country and, indeed, every community foundation emphasizes

certain features at certain times, and may in fact not ever reflect all the characteristics.

Community foundations are grantmaking organizations that:

- Seek to improve the quality of life for all people in a defined geographic area;

- Are independent from control or influence by other organizations, donors or

governments;

- Are governed by a board of directors broadly reflective of the communities they serve;

- Make grants to other nonprofit groups to address a wide variety of emerging and

changing needs in the community;

- Seek to build a permanent resource for the community, most often through the creation of

endowed funds from a wide range of donors, including local citizens, corporations,

governments and other foundations and nonprofits;

- Provide services to donors to help them achieve their philanthropic goals;

- Engage in a broad range of community leadership and partnership activities, serving as

catalysts, conveners, collaborators and facilitators to solve problems and develop

solutions to important community issues;

- Have open and transparent policies and practices convening all aspects of their

operations;

- Are accountable to the community by informing the general public about their purposes,

activities, and financial status on a regular basis.

There is general agreement that these characteristics well describe the range of activities and

practices community foundations implement. But it must be stressed that all of the above


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characteristics are seldom, if ever, found in any one community foundation – in fact, it could be

argued that they speak to the potential of community foundations rather than the reality. These

characteristics are overall more likely to be found in North America and perhaps the UK. In

other countries, where the concept is emerging or the country itself is experiencing a period of

change, only a few of these characteristics may be present. For instance, there may be a focus on

geographic definition or on broad granting, but the future-directed notion of building permanent

funds for the community may yet to be relevant and in some instances may never be. Indeed, for

many, the emphasis right from the start is on community building and participation, perhaps

through the giving of modest amounts on a regular basis, rather than the development of

permanent financial resources.

The community foundation concept has proven itself to be flexible and adaptable. Increasingly

those who strongly believe that a community foundation must have several, if not all, of the

above features to be a „true‟ community foundation agree that variations on the concept can be

found, though rightly suggest that the field needs to be clear about how few or how many

characteristics are needed in order to be a community foundation. That discussion continues to

this day, though with less rigid dogma than occasionally marked it in the past.

There is some suggestion that the growth of community foundations has slowed in the USA and

the UK. In Canada, however, some growth still occurs, as it does in other countries such as

Germany, Mexico and Australia. In these latter three countries the growth is exceptionally rapid.

The concept of the modern community foundation is newer in these countries – and elsewhere –

and made more attractive by the availability of significant wealth as well as increasingly

enabling legal environments. In Canada community foundations continue to develop as a result

of social and economic restructuring. The loss of natural resource industries, the downloading of

the welfare state and the decline in the „sense of community‟ are often cited as mobilizing forces,

as is, of course, word of mouth – a certain tipping point has been reached, making the growth

exponential. This is a reality in many parts of the world. So too, and this is a significant factor,


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is the influence of the internet and advanced communications as well as the numerous global

networks and programs that have emerged in the early years of the 21st century and which have

made connections and learning among community foundation practitioners relatively easy.

Around the world there is a growing realization and acceptance that no one sector – public,

private or civil society sector – can address all of the pressing issues that every society is coping

with. There is widespread agreement that the sectors must work collaboratively. Without

question this presents an opportunity for community foundations. Community foundations work

well (or have the potential to) with businesses and governments, contribute to long-term

sustainability, mobilize citizens, work in partnerships and, through their convening and

partnership strategies, identify and tackle issues that are seemingly unsolvable. Community

foundations can be a bridge between the three sectors, especially given the opportunity they have

to know their communities more deeply and broadly than almost any other entity. We believe

that these circumstances and this potential have contributed to the growth of community

foundations around the world.

So too has the injection of support from external donors. Every community foundation needs

capital to start up – human capital, financial capital and intellectual capital. Many in the

community foundation field believe that every community has human capital and intellectual

capital – which needs only to be unlocked. Community foundations have the potential to do so

through convening the community, linking with others and being a bridge between various

community institutions – all without huge financial resources. But to begin to build financial

capital they need an injection of money, which usually comes from outside the community or

possibly the country. This reality is nearly universal (Germany may be an exception).

Communities in the USA, in Mexico, in Thailand and in Australia, for instance, have benefited

alike from external funds, whether they were the traditional challenge grant or a straight start up

grant from a domestic or international donor.


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But externally derived funding raises a number of yet unanswered questions: how much money

is needed and for how long? When is it the right time to offer funds? And, how should the

money be offered? In some cases funds from donors external to the local community are given

to the foundation support organization or association so they can provide technical assistance or

manage challenge grants. The expectation is that the value of the funds can be extended through

documentation of good practices, dissemination of ideas and training in groups. In other

situations funds flow directly to community foundations for start-up or for special projects.

Later in the paper reference is made to the importance of challenge grants. For now it is

important to note that external funding is often critical to the start up success of community

foundations.

Development in Central and Eastern Europe

Even though community foundations share common features and characteristics around the

world, we suggest it is not easy, or useful, to make comparisons from one country to another.

The circumstances in which they grow are too varied. So, we emphasize that this next section of

our report is not about comparisons but is rather an attempt to lay the groundwork for describing

Russian community foundations in a context to which they are most similar, that of the post-

soviet region of Central and Eastern Europe (CEE). But even that context is not truly similar.

The vast geography of Russia, for instance, influences the development of community

foundations in ways that are not experienced in smaller CEE countries.

CEE countries have emerged from the soviet era and are on the path to new forms of governance.

With such a course comes new opportunity and challenge for civil society, and community

foundations are emerging as important actors in these developing democracies.

Community foundations have been identified in several countries formerly in the soviet sphere:

Bosnia, Bulgaria, Croatia, Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovak Republic

and Ukraine, according to the 2005 Global Status Report (Sacks, 2005). They are relatively new


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in all these countries, and while countries like Bosnia and the Czech Republic each have only

one, others can rightly boast of their success in spreading the concept: Poland, for example, with

its 21 community foundations. For the most part these foundations were heavily supported in

their early days by foreign funding. USAID, Soros Foundation, CAF, Ford and Mott

Foundations were prominent supporters, and they often acted in partnership with each other or

with local NGOs. Many of the foundations exist in small communities, some in larger urban

areas, and several are regional in nature, but it is striking that few exist in the largest

metropolitan areas of any of these countries.

Community foundations throughout eastern and central Europe have much in common. They are

all dedicated to engaging citizens – often youth – in the community by granting to organizations

that promote citizenship in the broadest sense or by hosting events and festivals that in and of

themselves promote citizen participation or encourage interaction with others in the community.

These foundations are looking at ways they can contribute to the long-term sustainability of their

communities, through both encouraging a sense of pride and identity in the community via

targeted granting and through building modest funds of a permanent nature. For most, though,

immediacy impacts the manner in which they continue to raise and disperse funds, in as much as

the needs and issues of the day require immediate attention. Individual giving is limited (though

several of these countries are actively developing legal and legislative frameworks for the NGO

sector, including for foundations and donors) and the notion of endowment is relatively

unfamiliar. Local businesses are often relied upon as donors, while support from outside the

community remains prevalent. Many foundations, such as in Poland and Slovakia, are linked

through newly developing support networks so they can learn from each other, and are also

increasingly able to connect with peers in other parts of the world.

Yet, each community foundation in CEE represents its own unique history and culture, and each

is shaped by the circumstances in its community and region.


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Russian community foundations share many of the above CEE features. In particular at this

juncture, a few common themes deserve to be noted.

Governance is a theme for discussion throughout the region and, indeed, around the world. As is

the case universally, boards in CEE countries include local leaders of influence, often from

business, local government and other NGOs. In North America and the UK, it would not be

unusual to have significant donors – individuals – on the board, among others. In CEE there are

still few individual donors, so other leaders, often from business, serve on community foundation

boards. But as important as the composition of the board is, the real issue is how the boards

function and who has the power – how independent board members are from the influence and

interests of their workplace, for instance. How they are (or are not) perceived as champions and

ambassadors for the foundation in the community, and how willingly they play this role. How

they see their role in planning for the long-term sustainability and future of the foundation, and

how they are seen to reflect their community‟s demographics, interests and priorities. While it is

fair to say that the role of governance is under the spotlight all around the world, the questions of

independence and community representation appear to be particularly relevant in CEE countries.

What constitutes the appropriate scope of granting is another topic under discussion in several

regions. Is paying for municipal street lights a legitimate way to make safety possible for people

in a community and thus enable participation in community life? If so, does this make it an

appropriate grant? To what extent should community foundation grants focus on reaching the

poor and underserved, or should they be directed toward a range of organizations, including

those in the cultural and recreational sectors? And to what extent should community foundation

granting be linked to municipal granting, either as a replacement or as leverage to attract new

donors, or simply to make the pot of funds bigger?

Relationships with local governments are often close. Is there a difference between a close

relationship with a bureaucrat or one with an elected official, that is, with the director of


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recreation for the municipality or with the mayor? Foundations in CEE countries generally

report close ties with local government.

In CEE countries relationships with businesses are stronger than they are with individuals, and

this marks a striking difference from the North American approach. Local or national businesses

are the most prominent supporters of community foundations. This phenomenon is not unique to

CEE, but is found in Mexico, Australia, and to some extent in the UK and Southeast Asia. In

fact, the outliers in this area are the US and Canada, whose donors continue to be primarily, but

not exclusively, individuals.

The origins of a community foundation are interesting. In several CEE communities (as in

places like the Philippines) it is local or regional NGOs that have started the foundation, turned

themselves into a foundation, or incorporated foundation activities into their activities. It

remains to be seen if this is an effective approach over the long term. On the one hand,

community foundations with these origins may find themselves stretched thin and without a clear

focus, or sometimes in competition with other purposes of the organization as a whole. On the

other hand, they may rely less on external funding, having other resources of their own.

The issue of endowments or permanent funds seems clearer. For good reason, the general

practice in CEE is to raise and flow funds, perhaps nearly all that are available, in grants. At the

same time, most community foundations seem to recognize the importance of building long-term

funds. Plans to do so often involve setting aside a small amount or using challenge grant funds

to start their endowment. Even though relatively unknown, endowments in CEE have grown

significantly (CPI survey, 2005) over the last very few years, as they have begun to in Russia.

The reasons for this are several: improved quality of foundation performance, including greater

knowledge and skill within the foundation; improved economic and social circumstances; and

strengthened relationships with business and government. Of course the overall number of

foundations has grown, also raising the level of endowments.


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Finally, in this section of the report, we turn to some of the key strategic themes that community

foundations around the world are facing, but may be especially pertinent in CEE as well as in

other parts of the world where community foundations are now emerging, such as Southeast

Asia. Addressing these strategic themes when a community foundation is in emergence is far

easier than after they have become common practice.

Strategic Themes for Community Foundations Around the World

A fundamental issue revolves around the notion of community itself, of who „owns‟ the

community foundation, and what is meant when we say “community”. For the most part, at this

stage of community foundation development, there is agreement that community foundations

serve defined geographic regions. But there are valid and challenging questions being raised

about the very notion of “community” by many philanthropy leaders and, while not the subject

of this paper, this question deserves considerable attention within the global field.

Some experts argue that the community foundation‟s legitimate identity comes about when the

whole community or region it serves sees the foundation as a vehicle for its betterment. Others

point out that this takes time and that in early stages of development a community foundation

may „belong‟ to one group more than to another. Balancing the sense of ownership among the

community at large, grant beneficiaries and donors, be they governments, businesses, individuals

or other non-government funders, appears to be important to its long-term success, but getting to

that state is not without its challenges almost everywhere community foundations exist.

But is the emphasis on community or on donors? Discussion about this question is lively and,

for the most part, respectful, though it is true that some foundation practitioners hold firmly to

the notion that the „client‟ is the donor and without donors there is no community foundation.

While donors are obviously important because of the resources they contribute, it has been

shown that community foundations can be equally and powerfully effective in their community

building role as catalysts and conveners, working with very limited financial resources. The


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reality is that the continuum of donor and community is largely contextual and will vary from

place to place. But what is most important is that community foundations hold the emphasis on

donors and community in balance and according to local circumstances, and move on to

considering more long term and strategic issues than who is the primary ”client”– they both are,

and one cannot exist without the other.

Another key issue has to do with granting. As noted earlier, funds are being broadly dispersed to

support a range of causes and issues. Grants are often small in size, which likely is appropriate,

and in some communities grants are made repeatedly to the same organization, arguably to build

capacity in that organization. But the question of how foundations gauge whether their grants

make a difference or have an impact remains an issue. This is not only a matter of evaluation,

but one of philosophy. Should community foundations, in general, direct at least some of their

resources to address the most pressing issues of poverty, exclusion, and human rights violations,

or is small granting to a wide range of grantees the most appropriate action for community

foundations? This topic is under discussion, as it should be, throughout the community

foundation universe.

Another related issue is that of community foundations delivering programs and services. In

North America some do, but it is far from a major focus of activity. Some emerging foundations

in other contexts, especially those in countries in transition such as CEE or in foundations whose

roots are in an NGO, tend to be engaged in more direct program delivery. Observers wonder to

what extent this is a distraction from the mission of a community foundation, which is, at its

essence, to build the capacity of others to address community priorities and needs.

Sustainability is also a topic of interest. The growth of community foundations is remarkable,

but is it financially sustainable, both at the local level and as a field of community philanthropy?

As external donors withdraw, whether a challenge grant has come to an end in Canada or the US,

or USAID is withdrawing from a CEE country, long-term financial sustainability becomes an


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issue. Challenge grants and external funding are critical catalysts for start up, but may

inadvertently, because the foundation has to spend so much time meeting the challenge that it

has not focused on other issues, undermine the long-term sustainability of the organization. And

boards of directors, almost everywhere, are loath to focus on sustainability, being preoccupied

with the immediate success of the foundation while they are the leadership.

But sustainability is not just about money, important as that is. It is also about leadership and

succession – topics on the minds of community foundation practitioners around the world. The

concept has captured the imagination and energy of today‟s community leaders, including

businesses, NGOs and, of course, staff and volunteers in community foundations. It is not clear,

anywhere in the world, how this commitment and passion will carry on into future generations

and how today‟s foundations are attracting and equipping leadership for the future.

The issue of long term viability in its broadest sense is (or should be) of grave concern to the

more general NGO world, not just to community foundations. And in CEE and Russia it might

be that the focus on long term sustainability is even more challenging than elsewhere, given

recent history: for many, the past has always been about change and they wonder why they

should invest in thinking about the longer term future when change, based on their experience, is

sure to occur again.

A further aspect of sustainability is related to performance and practices. There is a rush around

the world to embrace formal standards which are designed to encourage good practice and

accountability, to govern membership and access to services in support organizations or

networks, and to convey to donors as well as to other external bodies, including the media and

government regulatory agencies, that community foundations are highly accountable,

trustworthy and committed to excellence in practice. While high standards of performance are

absolutely critical and do contribute to sustainability, some wonder if standards really encourage

the highest level of innovation and flexible performance or if they reduce performance to a


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common and therefore perhaps middle-of- the road practice. There is also a question about how

practices would really stand up under close inspection, even as the foundations are being

presented as „in compliance‟ with the standards. Conflict of interest comes to mind as one area

of vulnerability identified in many places, though others exist as well.

Another theme under discussion is that of the relevance and appropriateness of the community

foundation approach as a way to encourage generosity and build local giving and philanthropy.

Many argue that the general community foundation approach would be more appropriate if it

more effectively incorporated local traditions of giving, while others suggest that community

foundations tend to represent themselves somewhat boldly as the „best‟ answer to local

community needs. Of interest to this ongoing discussion are the many examples of local

traditions actually being adapted by community foundations in many parts of the world and in

particular, the current research focusing on southern Africa. The results of this study, along with

future research, may make a helpful contribution to understanding how various cultures practice

generosity and giving, and how communities can build on their histories for the benefit of

current and future generations.

Russian community foundations can be positioned within a rapidly growing global network of

likeminded leaders and organizations. Without question they reflect some of the key features and

characteristics of community foundations around the world, face some of the same issues, and

have much of the same potential. And they are developing in a period of rapid, though perhaps

unsteady, growth in the larger NGO and philanthropic sector in Russia.

Development of Philanthropy in Russia

Later in our report we reference the culture of religious and family giving. Now we look to the

picture from the period of 1917 onward. During the Soviet period (1917–early 1990s) charity


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did not exist in Russia1, and support to the less fortunate was provided by the state through the

social welfare system. A complementary source of support arose when state-owned industrial

businesses established direct connections with educational, healthcare, sport or cultural

institutions to provide funds, often in the form of non-financial assistance such as equipment.

This model of giving was common to cities that were built around a single major business that

was deemed responsible for the social infrastructure of the city. Funds designated for the

support of non-business activities were included in their budgets.

Charitable organizations appeared in Russia in the early 1990s during perestroika. However,

many „foundations‟ established at that time by newly emerging Russian businesses had less than

charitable purposes: mostly money laundering and tax evasion. That phenomenon is well

described by Gambrell (2004):

“Scandals associated with abuses of nonprofit and charitable organizations also began to sprout

like proverbial mushrooms. Particularly notable among them, and extensively covered by the

press at the time, was the National Sport Fund, which received permission to import and sell

liquor, tobacco and other coveted consumer goods without being subject to the usual taxes. But

that was only the most prominent tip of a very large iceberg. Numerous organizations calling

themselves “foundations” or “funds” (the word is the same in Russian and English) were covers

or umbrellas for shady business activities, money laundering, currency operations, and so on.

Despite much truly selfless work to assuage long-standing ills, what was most visible to the

1 It was formally prohibited by federal law in the 1920s.


21

public at large was the graft and corruption associated with “charity,” “foundations,” “non-profit

organizations,” and the less common “philanthropy.” In Russian, the distinction between charity

and philanthropy is not firmly embedded in the public mind – or in the language. The word

blagotvoritel’nost’ – most often translated as “charity,” literally means “creating good deeds” –

and has been used almost interchangeably with “philanthropy.” Given the natural cultural

distrust of wealth after 70 years of Soviet propaganda, and numerous scandals, polls showed that

the public at large associated the concept of a “charitable” or “philanthropic” foundation with

shady money machinations.”

The distrust of the „foundations‟ and of the NGOs formed in the early 1990s lingers today. In

particular, research conducted by CAF-Russia in 1999 (Baranova Irina, et al., 2001) revealed that

a large majority of Russians are suspicious of NGOs and charitable organizations, consider them

useless to the common person, and do not understand the reason for their existence.

Corporate philanthropy began informally in the post-communist era. By the end of the 1990s

many businesses were supporting, in non-financial ways, endeavours to provide resources to

vulnerable groups. Research conducted by the Siberian Center for Civic Initiatives Support

(SCCIS, 1999)2 showed that almost 90% of businesses received requests for help from NGOs

and individuals. Strikingly, in 9 out of 10 cases businesses responded with support. Most often

businesses tended to provide support as in-kind contributions: they donated their production or

services. According to the SCCIS research, businesses favoured the support of children in need

(orphans), the elderly and people living with disabilities.

Notably in the 1990s businesses preferred not to make their philanthropy public for two main

reasons: to avoid attention from the fiscal structures and to avoid the appearance that a company

had „extra‟ money.

2 Research funded by the Charles Stewart Mott Foundation


22

The development of philanthropy in Russia owes much to the role of international donors. The

first foreign philanthropic foundation in Russia was George Soros‟ Cultural Initiative (CI),

established in 1987. CI helped support the publication of many books and the translation of

previously published materials, and provided funds for Soviet academics, writers, and scientists

– long isolated from their colleagues in the West – to travel abroad for the first time. Following

the dissolution of CI, Soros opened two new foundations:

- The Soros Science Foundation, which offered support for individual scientists and peer-

review, and awarded grants in the fundamental sciences;

- Russian office of the Open Society Institute (OSI), which supported everything from civil

society development, legal and tax reform, education, and textbook publication to

Russian literary „thick journals‟ and contemporary art.

In the nearly 15 years George Soros was active in Russia, his foundations funded projects to the

tune of over $300 million.

Many other foreign organizations began to arrive to assist Russia in the late 1980s and early

1990s.

Government aid in various forms and amounts arrived from the USA, Canada, European

countries and the European Union. Along with governmental agencies like USAID, CIDA, and

DFID, other foreign philanthropic institutions began to make grants for projects in Russia or to

open offices with grant-making programs: the Heinrich Böll Foundation, the MacArthur

Foundation, the British Charities Aid Foundation, the Ford Foundation, and the Charles Stewart

Mott Foundation, among others. The Eurasia Foundation, a U.S. government-private sector

partnership, was created in Washington in 1992 to “promote the advancement of democratic

institutions and private enterprise” in Russia and other post-Soviet countries. Over the last ten

years the Eurasia Foundation has supported projects in civil society, small business and media


23

(among other areas) with some $225 million in USAID funding, enhanced by more than $58

million from other private and institutional sources. Many of these foundations funded, and still

fund, a broad range of projects within Russia – often with a strong emphasis on the development

of the non-governmental sector and of the institutions of civil society.

The role of foreign foundations – particularly private ones – is succinctly described by Gambrell

(2004): They "provided both potential grantees and would-be Russian philanthropists with a

model of philanthropic activity. It involved a transparent, egalitarian grantmaking process, in

addition to financing hundreds of millions of dollars of projects over the first decade of post-

Soviet Russia. The staff of these organizations, as well as the juries constituted to evaluate the

grant applications, consisted largely of Russian citizens. Thus, the foreign foundations served as

a training ground for future Russian-funded philanthropic activity. Grantmakers and grantees

alike gained valuable experience – both philosophical and practical – in their contacts with

foreign philanthropy."

By the end of the 1990s numerous Russian NGOs had gained enough experience in managing

grants to offer assistance to governments at the municipal and regional levels. When the federal

and regional laws on the so-called „state social order‟ were issued, thereby introducing municipal

and regional grants, NGOs were well positioned to provide advice and technical assistance to

governments on how to implement the new laws. As a result of these laws a „project‟ culture

emerged in Russia and was widespread by the end of the 20th

century – owing mostly to the

efforts of foreign donors and NGOs, and their Russian counterparts.

The Charities Aid Foundation estimates that from about early 1992 (when prices were

decontrolled and privatization began) to the end of 1993, corporate giving rose tenfold, from

about $1 million U.S. to $10 million. Private donations, however, remained minimal – in the

thousands of dollars. The first, tentative steps toward charitable activity in Russia tended to be

along the lines of a „patron of the arts‟ or „sponsor‟ model. Businesses often sought to use


24

„charity‟, in its variously conceived forms, as advertising or self-promotion: getting their name

mentioned in the press, „buying‟ the goodwill of important people, sponsoring visible literary

and artistic prizes, or holding special events to benefit everyone‟s favorite causes – orphanages

and emergency medical aid to children. These charitable acts were usually isolated, one-time

affairs, and entirely lacking in any systematic philosophical approach.

Then, between 1993 and 1995, individual giving soared from the few thousands of dollars to

approximately $1 million. And over the same period corporate giving again rose tenfold, to

approximately $100 million. By 1998 over 75 percent of Russian companies were engaged in

some form of charitable giving. Giving on the part of both companies and individuals suffered a

major setback with the autumn 1998 financial crisis but by 2000 giving had not only resumed, it

registered another increase: CAF estimates that corporate giving reached about $200 million,

while individual contributions totalled approximately $10 million nationwide. Furthermore,

these increases in individual giving were made despite the fact that the Russian tax code offers

no tax deductions for donations to non-governmental organizations3.

In 2002 CAF research4 found considerable progress made by business donors in understanding

the difference between sponsorship and philanthropy (Krestnikova & Levshina, 2002). But the

lack of legislative norms to support philanthropy was considered the key problem facing the

development of corporate philanthropy by the majority of businesses who took part in the

research.

CAF reported that private giving rose from about $10 million to $100 million a year between

1992 and 2002 and that the amount of money funnelled to philanthropic and charitable activities

through CAF alone grew from approximately four million UK pounds to ten million. Many

3 Quoted from (Gambrell, 2004)

4 Research supported by Ford Foundation


25

Russian donors, private and corporate, prefer to have grant competitions administered by outside

organizations so as not to require large operating staffs. CAF, for example, has run grant

programs for Potanin‟s foundation, as well as for YUKOS and Khodorkovsky‟s Open Russia.

Unlike much of the previous private giving in Russia, these foundations are generally

grantmaking, and follow a more transparent, Western-styled model, using publicly announced

application processes, grant competitions and expert juries to determine grantees, in addition to

funding solicited projects and operating programs. There are six private and family foundations

established by some of Russia‟s wealthiest individuals.

In 2003 CAF interviewed5 representatives of major Russian corporations (CAF-Russia, 2003)

and they agreed that corporate philanthropy had developed considerably since 2000. More

companies already had long-term plans and clear priorities in that field. However, there was no

consensus among interviewees on the reasons why corporate philanthropy had so developed.

Explanations varied from the country‟s more stable economic situation to strengthened

government control.

Civil society in Russia has experienced growth as well since the late 1980s. Here the term „civil

society‟ is understood in the manner described by Evans (Evans, 2002): “the sphere of self-

activating, self-governing social organizations that are largely independent of control by the

state”. The number of registered NGOs has increased dramatically since 1991 and reached

350,000 by 2003, though many of them existed only on paper and were not active. The

population of NGOs is unevenly distributed around the country: the registered and active NGOs

in Moscow, St. Petersburg and a few other big cities clearly number more than those in all other

regions of Russia combined. This can be explained by the availability of resources, foreign

grants in particular. Registration of an NGO requires time and money. Individuals and initiative

groups in the smaller cities chose not to register their organizations since having formal status

5 Research supported by Ford Foundation


26

would not necessarily help them implement their activities and raise funds. This was true in

most parts of Russia until now.

Active NGOs are concerned with issues ranging from public health, child welfare, juvenile

delinquency, AIDS education, science and humanities education, culture and the arts, to media

training and monitoring, human rights, military reform, prison reform, environmental issues,

monitoring of government activities, refugee rights, and social assistance of various kinds.

As identified by Yakimets (2001), the development of Russian NGOs was characterized by three

stages: romantic (1991-1995); constructive and contradictory (1995-2000); professionalization

(2000 - …). It is fair to say that many NGOs have always depended to a great extent on foreign

funding and although they have become „professional‟, they have not succeeded in becoming

financially sustainable. Today, as foreign funds available to Russian NGOs are decreasing,

many NGOs face serious challenges, and their future is unclear.


27

Chapter 2. Research Methodology

Rationale for Making Methods Decisions

In this section we briefly explain how our methods decisions were made, which we consider

important even for the non-academic audiences for whom this report is written.

Patton (2001) suggests making thoughtful and practical methods decisions, whereby the methods

used are appropriate to the particular nature of an inquiry and the specific context in which the

inquiry is conducted. He urges researchers “to supersede one-sided paradigm allegiance by

increasing the concrete and practical methodological options available… Such pragmatism

means judging the quality of a study by its intended purposes, available resources, procedures

followed, and results obtained, all within a particular context and for a specific audience”

(Patton, 2001, pp.71-72).

Creswell (1998) provides the following “checklist” for methods decisions:

1. Consider the nature of the research question.

2. Decide if you need to explore the topic or to verify a hypothesis.

3. Decide if you need to present a detailed view of the topic or a “panoramic shot” of it.

4. Determine if you need to study individuals in their natural settings or conduct an

experiment in laboratory settings.

5. Decide how you position yourself as a researcher: as an active “learner” who can tell the

story from the participants‟ point of view or as an “expert” who passes judgment on

participants.

The purpose of our study was to explore the history of Russian community foundations and their

current state. Our research was aimed at discovering the complex interrelationships inside and

outside organizations in order to understand their „being‟, „relating‟ and „doing‟.


28

Therefore, this inquiry was oriented towards deeper understanding of the phenomenon of

interest.

Research questions: The questions that guided our inquiry were not theory-derived or theory

testing; they were exploratory. Answers to the research questions helped discover something

new, not verify a pre-existing model or hypothesis.

The study had to be open to whatever emerged in the course of our work and had to build on

inductive analysis.

The only way to collect information on the research topic was to work in the field and to study

individuals and organizations in their natural settings. This had to be a naturalistic inquiry

occurring without opportunities to manipulate or control variables in the settings under study.

Sources of information available for inquiry:

Data that could answer the research questions were mostly descriptive. The key informants were

individuals working for the community foundations, donating to the foundations, collaborating

with the foundations and/or using their services. Most of the information we gathered had to be

drawn from their memories and experiences. For the most part, documentation available for our

study (organizations‟ histories, strategies, publications, policies and procedures, advertising

materials) was also narrative.

From the very beginning we aimed at creating a constructive and forward-looking final product.

It was important for us to emphasize the learning and non-judgmental nature of our mission in

order to develop collaborative relationships with our colleagues from the community

foundations. So we consciously took an “active learning” approach as opposed to an “expert”

judgmental style.

Therefore, this had to be a naturalistic field study:

- Oriented towards a deeper understanding of the phenomenon of interest;


29

- Based on a few cases;

- Driven by exploratory research questions;

- Built on inductive analysis of mostly narrative data, drawn from individuals‟ memories

and documents;

- Conducted by researchers involved as active learners.

Sampling Strategy

In this section of the report we explain how we selected sources of information for our research.

In our research we followed the so-called „purposeful sampling strategy‟ typical for a qualitative

study (Patton, 2001): we selected sources of information such that would be most helpful in

answering the research questions and achieving the research goal. In the research literature such

sources are called “information rich” (Denzin & Lincoln, 2005).

We started our research with the identification of Russian community foundations. To develop a

comprehensive list of the foundations we consulted with key players involved in their

development: Russian Donors Forum, Charles Stewart Mott Foundation, Ford Foundation,

Charities Aid Foundation (Russia), and leaders and representatives of the Partnership of Russian

Community Foundations.

We discovered a limited number of organizations in Russia that positioned themselves as

community foundations and were recognized as such both nationally and internationally. All of

them were full or associate members of the Partnership. Those became our primary sources of

information.

We also collected information on several foundations that did not belong to the Partnership and

were not broadly recognized as community foundations: Some of them had a clear intent to

become somewhat like community foundations in their respective regions; others once belonged


30

to the Partnership, but changed their strategy and turned into some other kind of organization

(for instance, private or corporate foundations); and others yet tried to become community

foundations but, for various reasons, failed to do so. So, this second group of organizations

helped us better understand what makes an organization a community foundation in the Russian

context and what the major challenges for community foundation development have been and, to

some extent, still remain.

Our third group of informants were Russian and international community foundation experts

who did not belong to Russian community foundations but were knowledgeable in this area:

representatives of the Russian Donors Forum, Mott Foundation and CAF-Russia. Expert

opinions helped us verify our findings and interpret data collected in the course of this research.

Experts also helped us better understand the context and history of Russian community

foundations.

So, our sample included:

- Russian community foundations that belonged to the Partnership (all full and associate

members);

- Emerging community foundations, former community foundations or organizations in

transition that could or wanted to become community foundations;

- Experts who did not belong to any particular community foundation.

Data Collection Methods

We used four methods of data collection: in-depth, semi-structured individual interviews, group

interviews, direct observation and document analysis.

Individual and group interviews

We conducted individual interviews with the leaders and staff of the community foundations,

founders, trustees and members of the board. We also interviewed business people who donated


31

to the community foundations but were not involved in the foundations‟ structures. These

interviews were conducted with individuals or small groups.

In all cases we talked to selected beneficiaries – representatives of organizations that received

community foundation grants. Our choices were inclusive to ensure that selected grantees

represented various groups of agencies supported by foundations: education, social welfare,

healthcare, sports, etc. Most interviews with the grantees were conducted individually at their

respective organizations or at the foundations‟ offices.

To avoid missing valuable data we consulted with the leaders of community foundations to

identify participants for the individual and group interviews that were most informed about the

community foundations and their activities.

We explained our research agenda and negotiated research activities with each organization‟s

executives. In addition, we introduced our research agenda to all the people whom we

interviewed.

As all the interviewees have had unique experiences and each had unique stories to tell, the

interviews did not proceed with the same questions for each respondent. Instead, the interviews

were semi-structured. The use of “issue-oriented questions” (Stake, 1995) helped us gather basic

information, while our openness to providing time for additional questions and readiness to

collect unexpected data allowed us to gather valuable complementary information.

Most of our interviews were conducted in Russian and translated into English when needed,

though in a few cases our informants‟ English abilities were such that we did not require an

interpreter. We planned our interviews so that our English-speaking team member could meet

English-speaking informants when possible and talk to them without translation.

Studying documentation

The documentation we studied included:


32

- Websites (Partnership, Russian community foundation websites and European

Foundations Centre (EFC), specifically the Community Philanthropy Initiative (CPI)

site),

- Articles published on the WWW,

- Flyers and annual reports,

- Minutes of various meetings including the Board meetings,

- Policy and procedure manuals,

- Evaluation reports,

- Conference proceedings.

And this documentation provided the following information about community foundations:

- Profiles of organizations and their histories,

- Major achievements and milestones in their development,

- Priorities and plans,

- Sources of funding,

- Scopes of granting,

- External relationships,

- Involvement in the Partnership activities,

- Development of Russian community foundations in a global and regional context.

Direct observation

We used direct observation when possible. Having had the opportunity to visit various

community foundations, we saw their offices and the environments in which they work. We

likewise visited grantees and in some cases observed projects in progress or saw their results.


33

We also attended two meetings of the Partnership and observed how the leaders of Russian

community foundations work together and make decisions.

Data Analysis

The amount of information collected in this study was very impressive. To analyze it we

followed what could be called simplified „grounded theory approach‟:

- we read through all the data;

- discussed it;

- generated categories of information or located the most important themes that emerged

from the data;

- and, finally, explicated a story from interconnection of these categories.

Our trio of researchers consulted with each other and even argued over the interpretations,

conclusions and recommendations. This report is the result of an interactive process of data

analysis and reflects our team consensus on what the data meant.

Protection of Research Participants and Ethical Considerations

The protection of research participants is an important issue when performing research in an

organizational or programmatic environment. All research activities were negotiated with the

community foundations‟ executives. We explained our research agenda to them as well as to all

the people whom we interviewed. We obtained permission to collect and to use data from

organizations and individuals. We negotiated and agreed on informal rules for working together.

To protect our informants we are not using attributed quotations in this report. All the non-

published materials (for example, presentations) we refer to were used with permission.


34

Strengths and Weaknesses of the Research Methodology

Strengths

Thoughtful sampling strategy

The number of community foundations in Russia is rather small. Consultations with the key

experts in the field helped us form a sample that was not only purposeful but also well

representative of the population of Russian community foundations. Thus our conclusions and

recommendations could be relevant to all current and future Russian community foundations.

Validation of research observations and immediate interpretations

Data source triangulation. We used two different types of data sources: people and

documentation. To study the phenomenon of interest we addressed many people representing

each of the community foundations and studied various documents produced by them. Our use

of several different cases (that is, several different community foundations) to verify findings

could be called „inter-case triangulation.‟

Methodological triangulation. We used multiple methods to collect data: individual and group

interviews, direct observation and documentation analysis.

Investigator triangulation. We used three researchers to collect and interpret data.

Truly exploratory nature of the study

All our interpretations, conclusions and recommendations were evidence-based. There was no

attempt to speculate on our research from the basis of a pre-existing theory or platform. The

issues were studied in depth and detail. Conducting fieldwork without being constrained by

predetermined categories of analysis contributed to the depth, openness, and detail of the inquiry.


35

Sensitivity to the research participants

The study was sensitive to the risks involved to research participants and, additionally,

considered their interests so that the information herein might prove beneficial to them and to

their respective organizations.

Potential usefulness of the results

All organizations and individuals who took part in the study will receive detailed feedback on the

results – feedback that could be immediately used. All the organizations‟ leaders and most of the

board members expressed interest in the results of this study.

Researchers’ competencies

In qualitative research the researcher is considered one of the tools of the research methodology.

Consequently, the researcher‟s strengths and weaknesses should be mentioned while addressing

the strengths and weaknesses of the research methodology.

Our strengths as researchers were:

- Methodological competence. Our team had proven competence in research methodology

owing to experience with research, evaluations and organization development work,

combined with formal education in research methods.

- Subject competence. Our team included an international expert in community foundation

development who also brought rich practical experience in supporting and training

community foundations and two researchers who had solid backgrounds in organization

development and program evaluation in Russia.

- Contextual competence. The diversity of our team allowed us to consider both

international (global) and national (local) contexts. For two team members, Russian

culture is their native culture and so a keen awareness of cultural context deeply inflected


36

this study. Furthermore, we enjoyed a familiarity with several key informants from our

previous work with them.

Research team effectiveness

Our team included one specialist from Canada (Monica Patten) and two specialists from Russia

(Alexey Kuzmin and Vladimir Balakirev). The two Russian specialists have been working

together since 1991 and so already were a good team by the beginning of this research, but they

had no previous experience of work with Monica. The team composition proved effective. It

clearly was the right fit in terms of personalities and individual styles. Not only did we learn a

lot from one another but it was fun to work together. We were able to use English for our

internal communications and correspondence. The interpreters we invited for data collection

were competent and nicely complemented the team.

Weaknesses

Limited generalizability

The study was conducted in Russia with a number of community foundations representing

several different cities from various regions. It is fair to say that each CF is unique and is

working in a unique environment. Thus the lessons learned from each community foundation

can only partially be applied in other community foundations. Nor can all the results of the

study be attributed to each of the Russian community foundations – existing or new.

Nevertheless, the study provided important insights that may be used by such practitioners as

funders, community foundation leaders and activists, municipal and regional governments, and

businesses. The results of this study may be helpful to the international community of

community foundations – with careful consideration of the local (Russian) context. In this

limited respect the research outcomes can be considered generalizable.


37

Limited access to information on the community foundations that did not prove sustainable

In most cases we collected data on those foundations from secondary sources as access to their

former representatives was unattainable.

Presence of community foundation representatives at the interviews

In many cases the community foundation‟s representatives helped us find our way to the

informants and were present at the interviews. We understood that their presence at the

interviews would influence interviewees. But, for the following reasons, we decided not to insist

on having „tête-à-tête‟ conversations with the informants:

- In most cases our informants expected the community foundation staff to introduce us

and to be present at the interviews. This expectation was particularly typical for the top

business managers and representatives of the local authorities. In order to avoid

unnecessary tension and to demonstrate our focus on learning and not on “control”, we

decided not to insist on changing that „protocol‟. Forced „tête-à-tête‟ conversations,

especially with VIP informants, could have become powerful negative interventions

potentially affecting the quality of our communication with the informants and the

overall quality of our work.

- We asked community foundation staff present at the interviews to sit quietly and merely

observe while we collected data. In most cases our request was honoured. In those cases

when community foundation staff got actively involved in our conversations with the

informants, we reminded them of our request and of our reasons for it, again asking them

to refrain from active participation.

- We know that in a number of cases community foundation representatives had

preliminary conversations with our informants and provided more or less detailed

guidance on how to answer our questions. In those cases, the presence of foundation

representatives at the interviews did not therefore influence the situation dramatically.


38

- However, we did have opportunities to talk to various informants on our own.

- Since we used several kinds of triangulation, we could verify both the data collected and

our interpretations of it.

Researchers' limitations

Our history and pre-existing relationships with some of the organizations studied had a certain

impact on us. Investigator triangulation (see the previous subsection), personal reflection and an

ongoing verification of data and interpretations helped, to a considerable degree, compensate for

that influence. Nevertheless, it was not easy to keep a stance of neutrality and to remain

unbiased with respect to the research subjects.


39

Chapter 3. Research Findings

Emergence and Growth of Community Foundations in Russia

Those who remember the beginnings agreed on the community foundation concept first being

mentioned in Russia by the Charities Aid Foundation (CAF-Russia) in the mid-90s. CAF-Russia

director Lena Young and her successor Olga Alexeyeva were the lone promoters of the idea for a

few years. They made numerous presentations at conferences, developed contacts with

community foundations outside Russia to collect relevant information, and contacted various

donors and development agencies working in Russia. CAF-Russia‟s intent was to facilitate the

creation of a few model community foundations in Russia.

By 1997 three cities had been selected for CAF-Russia‟s first work in developing community

foundations: Moscow, Togliatti and Tiumen. CAF provided the respective city governments

with detailed information on community foundations, and city officials were invited to visit

successful community foundations abroad. This networking and awareness-raising campaign

proved effective in helping the three cities prepare to establish their community foundations.

Togliatti looked to be the most promising of the three, and in 1997 CAF organized a visit to

Togliatti for a group of top managers representing several foreign donors. The goal of that trip

was to negotiate a strategy for cooperation between the Togliatti administration and foreign

donors in order to establish the first Russian community foundation. In 1998 the Community

Foundation of Togliatti was established, receiving modest financial support from CAF at this

initial stage.

In 1999 the second Russian CF was established in Tiumen, Siberia with the help of CAF. While

the community foundation in Togliatti was established as a new entity, the Tiumen Community

Foundation grew out of a successful and well-known local NGO Resource Center – a member of

the Siberian Center for Civic Initiatives Support Network.


40

In December 1999 the Moscow Mayor formally decided, independently, to establish a

community foundation in Moscow, though earlier efforts had been made with CAF-Russia

support. Two more community foundations were established in 1999: those in Samara and

Obninsk.

Since then the number of newly established Russian organizations that have positioned

themselves as community foundations has increased significantly (see the table below).

Table 1. Growth of number of Community Foundations in Russia

Years Cities where the CFs were established

1998 Togliatti

1999 Tiumen, Samara, Obninsk

2000 Moscow, Tobolsk, Pervouralsk, Kaluga, Zhigulevsk, Rubtsovsk

2001 Rostov-on-Don, Saratov

2002 Penza, Blagoveshensk

2003 Nerkhta, Oktyabrsk, Novocherkassk, Kaliningrad, Chaikovski, Nizhni Novgorod

2004 Angarsk

2005 Perm, Ulan-Ude, Shelekov

20066 Kamensk-Uralski

The table‟s twelve organizations marked in bold are recognized as community foundations by

the Partnership that was established in 2003, and indeed describe themselves as such.

6 According to our information, this community foundation will be formally established in 2006.


41

Twenty-five organizations are included in Table 1. In 2006 it is expected that the number of

Russian organizations that can be considered community foundations, that are registered as

community foundations and/or that have positioned themselves as community foundations will

total about 30. Diagram 1 shows the significant increase in Russian community foundations in

the years following the formation of the first in 1998.

Diagram 1. Number of registered Russian community foundations between 1998 and 2006

1

4

1012

14

2021

2425

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006

Nu

mb

er

of

reg

iste

red C

Fs

In the late 1990s and early 2000s several international donors entered the scene and joined CAF

in supporting community foundations in Russia: Open Society Institute (Soros Foundation),

Ford Foundation, Mott Foundation, DFID and the Eurasia Foundation7. In 2003, for example,

DFID8 supported a 3-year community foundation development project in Nizhni Novgorod. All

the community foundation representatives with whom we talked emphasized the importance of

grants and support provided by international donors at the early stages of development.

In Moscow in 2000 CAF hosted the first meeting of the Russian community foundations. Since

then such meetings of Russian community foundations have became regular occurrences, with

7 Mainly supported by the USAID

8 Department for International Development, UK


42

the 2001 and 2002 meetings also hosted by CAF. In 2003 the Togliatti Community Foundation

hosted the first annual meeting outside Moscow and the Partnership of Russian Community

Foundations was established, with financial support provided by Ford Foundation through the

Togliatti Community Foundation. The 2004 meeting took place in Tiumen, hosted by the

Tiumen Community Foundation, and the 2005 meeting was hosted by the community foundation

in Penza.

Since 2004 those meetings have been called “National conferences of community foundations”

and have become major events involving several dozen participants representing city

administrations, businesses, international donors and community foundations. For example, the

keynote speakers at the 2005 meeting were the Mayor of Togliatti and one of the top managers

of the Togliatti private bank that helped the Togliatti Community Foundation establish an

endowment.

The Togliatti endowment should be distinctly mentioned here as a milestone in the development

of the community foundation movement in Russia. In 2003 the Togliatti Community

Foundation, with the help of local businesses, established a $1,000,000 endowment. Prior to

that, because of prohibitive Russian legislation, most specialists in Russia considered the

creation of an endowment a utopian dream. The Togliatti Community Foundation and its

business partners demonstrated that it was possible to establish an endowment, even under the

existing circumstances. The endowment has dramatically increased the Togliatti Community

Foundation‟s sustainability and strength, and has become a strong motivator to other

foundations. The Togliatti Community Foundation continues to play a leadership role in Russia

and is seen by many as „the model‟.

In 2004 three other community foundations (Tiumen, Pervouralsk and Chaikovski) reported the

creation of their respective endowments. While they still have numerous technical problems to

solve and a long way to go before building solid endowments, the process is underway and


43

progress will surely be made. It seems that a psychological barrier has been broken: today,

community foundations in Russia can build endowments.

The most recent trend in community foundation development, another milestone if you will, is

the involvement of major corporate players.

SUAL (Siberian-Ural Aluminum) is a global top-ten aluminum company, whose activities

encompass the entire process from bauxite mining through to the production of value-added

aluminum products. SUAL employs 60,000 people and its operations span nine Russian regions,

as well reaching Zaporozhye City in Ukraine. In cooperation with the UNDP9 and USAID

10,

SUAL is implementing a program aimed at development of the regions in which its enterprises

are located. In 2004 SUAL managers learned of the community foundation concept, and

recognized its potential as a relevant tool for regional development. In 2004-2005 SUAL began

establishing local foundations in Shelekhov and Kamensk-Uralski. The SUAL strategy11

is to

start these foundations in cooperation with the city administrations and then involve local

businesses to support them. These foundations could become viable community foundations

over time.

Another important corporate actor is YUKOS – the major Russian oil company. YUKOS

supported the creation of a community foundation in Angarsk in Siberia. CAF-Russia was hired

by YUKOS to implement the foundation and to provide it with technical support and guidance.

The Russian Donors Forum recognized the importance of development of local philanthropy in

various forms. Community foundations were one of the very promising initiatives. Potentially

all of them could become partners or members of the Forum. To get more information about this

potential, the Donors Forum became interested in conducting research on Russian community

9 United Nations Development Program

10 United States Agency for International Development

11 We will discuss it in detail in the next section.


44

foundations. This decision can be considered another milestone in the history of community

foundation development in Russia.

Milestones at a glance:

Mid-90s – CAF introduces and promotes the community foundation idea;

1998 – first Russian community foundation is established in Togliatti;

1998-2000 – Soros Foundation, Mott Foundation, Ford Foundation, Eurasia Foundation, DFID

become involved in community foundation development, with some continuing support to this

day;

1999-2000 – rapid growth in the number of Russian community foundations;

2000 – first meeting of community foundations, hosted by CAF-Russia;

2003 – Community Foundation Partnership established; endowment developed in Togliatti;

2004-2005 – SUAL and YUKOS get involved; Donors Forum considers support to community

foundations by suggesting research into their potential.

Russian Community Foundations: Individual Cases

We begin this section of the report by explaining a bit about Russian community foundation

structures. All community foundations have based their governance structure on the Togliatti

Community Foundation‟s model. Each foundation has a Council of Founders (often inactive

once they have completed their „founding‟ work) as well as a Board of Trustees and a body often

simply called the Board of the Foundation. Formally the Founders have supreme power, but in

reality the Board of Trustees has the power, as it sets strategy and monitors performance. Staff

generally relate most to the Board, the group that has the responsibility for day to day activity.

More detail on governnance is provided later in the report.


45

The profiles describe each foundation‟s general environment and its key activities. All are

enagaged in developing funds and grantmaking and many offer programs as well. Some

programs are directly related to their fund development and granting work, some to NGO

development and some to unrelated activities. There is no agreement within the Partnership

about the scope and type of program that is seen to be acceptable for a community foundation.

The matter of programs will be discussed in more detail later in the paper.

Each profile ends with recommendations for future consideration.

Togliatti

The city of Togliatti, Samara Oblast12

is located in the Central part of Russia on the Volga River

not far from Samara. Its population is 700,000, and the average age of citizens is thirty three.

Togliatti is the capital of the Russian automobile industry: the AVTOVAZ plant in Togliatti

produces the most well-known Russian cars – LADA. The chemical industry is also well

developed in Togliatti and overall the business sector is dynamic and active. Togliatti is also

home to several universities and colleges.

The Togliatti Community Foundation (TCF) was founded in 1998. As noted earlier, CAF-

Russia played an important role in establishing the foundation by providing an initial package of

materials and information, and local government and business became early supporters,

remaining so today.

TCF has a strong and active Board of Trustees that includes representatives of city

administration, city duma13

, and leaders of major businesses (industrial, commercial, banking,

etc). The Togliatti Mayor became the first Chair of the Board of Trustees, and upon election the

new mayor also agreed to assume that position. TCF, through its Board, is governed by the city

12 Oblast is a territorial-administrative unit in Russia like province or state in other countries.

13 City council


46

administrative and business elites and NGOs are not yet represented on Board. From the

beginning TCF became a vital part of Togliatti‟s social fabric and an important tool in the city‟s

development.

TCF Director Boris Tsirulnikov is well known and well respected in the city. His experience in

education, in city government and in the NGO sector has contributed to his effectiveness as a

manager. From the onset he invested much time and energy in the creation of the TCF and he

continues to play a crucial role in its activities. While Boris has formed a strong professional

team to carry out the foundation‟s work, most to whom we spoke consider him one of the major

assets of the TCF.

TCF funding is primarily local. While the foundation used to receive considerable amounts in

grants from foreign donors, its $1,000,000 endowment was developed by local donors and

dependency on foreign grants has been reduced dramatically. A full-time employee is charged

with TCF‟s well-organized and proactive fund development work. The major source of funds

(almost 90%14

) is through donations from local businesses, with several businesses having

named funds – that is, funds with the name of the business and usually directed to specific areas

of interest determined by them.

TCF‟s scope of granting is broad. The Foundation supports projects implemented by NGOs and

by municipal agencies in various fields; TCF distributed about $225,000 to 182 grantees in 2004.

Granting priorities are defined by the Board and the granting process, managed by capable staff,

is transparent and well organized.

TCF owns a well equipped office large enough for the existing team.

14 In 2004


47

Three to four years ago, TCF established an agency – “Delovaya Volga”15

– that operates as a

consulting and training resource centre providing services to the TCF grantees, to other

organizations in Togliatti, and to other Russian community foundations. TCF generously shares

its experience with interested parties and often receives visitors from different regions of Russia

and from abroad.

TCF plays an active and important role in the development of community foundations in Russia.

In particular, it supported the creation of two community foundations in the neighbouring cities

of Zhigulevsk and Oktyabrsk and still maintains strong ties with them. The project in Oktyabrsk

was supported by Ford Foundation. However, these two foundations are not nearly as strong and

sustainable as the TCF.

TCF manages other program activities aimed at developing philanthropy in the city and/or

raising funds for specific purposes. One of these successful programs is the YouthBank.

TCF strongly supported the creation of the Partnership of Russian Community Foundations, as

this development aligned with TCF‟s overall strategy. TCF‟s leader naturally became the

driving force of the Partnership in the early stages of its development. The Ford Foundation‟s

grant to support the development of the Partnership was given to TCF since the Partnership was

informal and had yet no bank account.

The major challenges TCF faces are:

- recruiting new donors among local businesses;

- raising more funds from the existing donors;

- managing growth and the increasing amount and complexity of record keeping,

accounting and paperwork it brings;

15 Business Volga


48

- increasing amount of work with the local fiscal structures (TCF attracts serious attention

from the fiscal structures owing to its innovative nature);

- offering competitive salaries to professional employees and creating career opportunities

for them.

Tiumen

Tiumen, the capital of the Tiumen Oblast in Siberia, is the administrative centre of the major oil

and gas region of Russia. It has a population of over 500,000 and its businesses, industrial

enterprises, universities and colleges combine to make it an active and dynamic city.

The Tiumen Community Foundation was established in 1999, growing out of an existing, active

NGO Resource Centre. The key players bringing about that transformation were the Centre‟s

leader and Director Vera Barova and CAF-Russia. When it became clear that the Resource

Centre needed to raise more money locally, Vera began looking for opportunities to establish a

local fund. She accepted an invitation from CAF-Russia to consider participating in the newly

developing community foundation program and visited Togliatti and later the UK to learn more

about community foundations. Vera learned a lot from Togliatti and used the documents and

process they developed to establish the community foundation in Tiumen.

From 1999 to 2004 the Tiumen CF was governed by its founders: 5 Tiumen businesses that

trusted Vera. In 2004 the founders decided to form a Board of Trustees (9 businesses) whose

obligation would be to provide and raise funds ($3,000 a year or more from each of them).

Tiumen city government knows the community foundation and is positive about its work but has

limited its involvement in community foundation activities by delegating one representative to

its grants committee. The city government conducts its own grant competition.

In the past, Vera Barova has worked with youth organizations, with the Tiumen Committee of

the Communist Party of the USSR, in education, and in business and social welfare. She loves


49

her city and is well known and respected by many Tiumen citizens. Vera is an experienced

manager who has built a strong professional team around her. Most informants told us that Vera

was and is the major asset of the Tiumen CF.

In 1999 the community foundation received a grant from the Eurasia Foundation. This grant was

instrumental in helping the organization develop its own operational sustainability, and begin

local fund development. A CAF grant became another important source of funding, covering

two thirds of the cost of the foundation‟s new office16

. The Tiumen Community Foundation

reports having an endowment, but what they are reporting is in fact the value of the real estate

they now own.

Vera is unsure whether it is sensible to establish traditional endowments in Russia since the

inflation rate is still high; the money will gradually disappear without a proper mechanism to

save and increase it. The major source of funding for Tiumen Community Foundation is local

businesses (80% of the CF budget17

) and foreign grants (18%).

As part of their development strategy, Tiumen Community Foundation combines granting with

the delivery of numerous programs and projects such as “social animation” and conflict

resolution.

The scope of granting is broad. In 2004 the foundation distributed about $36,000 among 29

grantees made up of NGOs and municipal agencies in various fields. Granting priorities are

defined by the Board, which is elected to a 5-year term and includes representatives of the city

administration, businesses and NGOs.

16 They expect to move to the new building in early 2006.

17 In 2004


50

The grant process, which is transparent and well organized, is staffed by two people. Tiumen

Community Foundation also offers programs, some aimed at developing philanthropy, with

others delivering more direct services to the NGO community.

Tiumen Community Foundation presently rents office space from a private audit company and

plans to move to their own office soon. Their current office is well equipped and conveniently

located.

Tiumen Community Foundation was one of the founding members of the Partnership. It hosted

the fifth conference of the Partnership and Vera Barova served as its Chair person in 2004. The

Tiumen Community Foundation's involvement in program activities has been discussed widely

by the Partnership. While some community foundations in the Partnership think that the Tiumen

Community Foundation is not „a real community foundation‟ since it operates as a community

development and resource centre as well as a foundation, there is no consensus on this among the

Russian community foundations.

The major challenges for the Tiumen Community Foundation are:

- increasing the foundation‟s sustainability (own the office, build an effective fundraising

mechanism locally, consider creation of an endowment, etc.);

- increasing the amounts raised locally for grants by involving more businesses;

- developing staff and creating career opportunities for them.

Obninsk

Obninsk, with a population of 100,000 is located in Kaluga Oblast 100 km to the South-West of

Moscow. Obninsk, with its numerous research institutions, is a world-renowned centre for the

study of nuclear science, meteorology and radiology. Interestingly, there are many NGOs in

Obninsk as well – both registered and informal. The city also has a number of small- and

medium-sized businesses.


51

Obninsk Community Foundation (OCF) was registered in 1999 by Mr. Artemiev, who at the

time was Director of the Obninsk orphanage. OCF was established through the project of the

Foundation “Our Children” supported by Eurasia Foundation. Initially it was called Public

Charitable Foundation for Social Development and then was re-registered as the Obninsk

Community Foundation. Mr. Artemiev is a very influential and well-known person in Obninsk,

having had an impressive political career since 1999, which included serving as Chair of the city

duma and election to the Oblast duma. In spite of his current position as Deputy Chairman of the

Kaluga Oblast Duma, he still actively supports the community foundation.

OCF has a Board of Trustees comprised of Mr. Artemiev, a representative of the Agency of

Social Information (Moscow), and a representative of the Obninsk Chamber of Commerce.

Tatyana Klimakova, who also works for a research institute in Obninsk, became OFC‟s

volunteer Executive Director in 2000. Since that year, when the first grant competition was held,

OCF has administered 5 grant competitions, with the municipal budget being the major source of

funding for the grants. In 1999 OCF received a start-up grant from the Eurasia Foundation and

later OCF participated in projects of the Eurasia and Soros Foundations aimed at helping elderly

and disabled people in the city.

In 2004 OCF distributed grants of about $10,000 among 33 grantees. In most cases OCF

grantees were formally registered NGOs working in fields as various and wide-ranging as

gardening to Boy Scouts. The grant process is transparent and well organized, and most grantees

are familiar with its requirements and know how to write project proposals.

OCF does not have ongoing program activities. Its director is equipped to work mostly from

home, though occasionally OCF uses office space at the local children's club. OCF is a full

member of the Partnership of Russian Community Foundations.


52

The major needs of the OCF are:

- for diversification of the sources of funding as it currently depends fully on municipal

money;

- to develop relationships with and involve local businesses;

- to have funds for administrative expenses.

Pervouralsk

Pervouralsk is an industrial city in the Ural mountains (Sverdlovskaya Oblast), with a population

of 130,000. Its major business is the Ural Pipe Plant18

, foremost producer of steel pipes in

Russia and Europe. Another of the city‟s significant businesses produces unique heat-resistant

bricks, while several smaller enterprises manufacture construction materials. Even with such

industry, the average living standards in the city are very modest compared to Moscow or even

to Yekaterinburg.

Pervouralsk Community Foundation (PCF) was registered in 2000. Having learned of the

Togliatti Community Foundation, the Ural Pipe Plant‟s Director- (who was also was the Deputy

of the State Duma of Russian Federation19

) proposed the establishment of a community

foundation in Pervouralsk. Following a visit to the Togliatti Community Foundation by the

Deputy Head of the city administration and Director of a not-for-profit agency, the Director of

Togliatti Community Foundation was enlisted to provide advice on how to establish and promote

the community foundation concept in Pervouralsk. Shortly thereafter the community foundation

was registered by six major businesses in tandem with the city administration.

From the very beginning PCF had close ties with the city administration. Its Director, Vera

Anan'ina, became Executive Director of the foundation at the invitation of the city government,

18 In Russian “Pervouralski Novotrubny Zavod”

19 Presently he is a member of the Chamber of Representatives of the Russian Federation.


53

where she continues to hold the full-time position of Chief of the Youth Department of the City

Government. She manages the community foundation on a volunteer basis, though it takes a

considerable amount of her time. Vera Anan‟ina is very well known and respected throughout

the city, with good connections to business, social agencies and NGOs, and government. Most

people with whom we spoke said that Vera definitely was the face of the foundation – and its

major asset.

The PCF's Board of Trustees20

includes representatives of the city‟s major businesses, the city

government, well-known and respected citizens, and representatives of NGOs (there are still few

of the latter) Directors of enterprises have made a decision to donate certain amounts of money

annually based on their number of employees21

. Contributions from the Ural Pipe Plant (with

about 13,000 employees) are the most significant. City government, in cooperation with

Pervouralsk‟s major enterprises, uses the PCF as a tool for developing the city and funding

projects that, for various reasons, could not otherwise be funded from the city budget.

The major sources of PCF funding are the local businesses that together provided 90% of its

2004 income. Additionally, PCF received grants from foreign donors for development and

program activities. In 2004 PCF reported the creation of a $40,00022

endowment. PCF has

devised various creative forms of fundraising, particularly with small- and medium-sized

businesses where the foundation collects and distributes second-hand equipment, and encourages

businesses to provide direct services to the beneficiaries as a form of donation.

PCF conducts grant competitions on a regular basis. In 2004 they held 6 grant rounds and

distributed grants totaling about $220,00023

among 95 grantees. The foundation has an expert

20 The organizational structure is identical to the Togliatti CF.

21 In 2005 this amount was 200 rubles, or about USD 7 per employee.

22 1,100,000 rubles

23 6,220,000 rubles


54

committee, which includes representatives of major donors and government, to assess grant

proposals and make decisions.

PCF has been helpful in disseminating information on project design and management for the

city, unfamiliar concepts that have since proven to be useful contributions to the development of

the city. With regard to their granting PCF distributes funds on a competitive basis and through

named funds where the donor determines the project goal. The range of the projects supported

or administered by the PCF is very broad. In fact, any project seen somehow to improve the

quality of life in the city could be funded through the Foundation. Examples include buying

specialized medical equipment for the hospital through a grant or the reconstruction of one of the

city‟s important roads, which was administered by the PCF. In the latter example PCF earned

the revenue needed to cover administrative costs. As there are few NGOs in the city, most of the

grants go to municipal institutions or to groups funded through the municipal institutions.

PCF has a small, well-equipped office located in the centre of the city. There are 3 full-time

employees at the foundation, other than Vera. PCF operates mainly as a foundation – that is,

without running its own program activities. PCF is developing a youth program similar to

Togliatti‟s.

PCF readily shares its experience with those interested in their activities. Recently, for example,

they received a grant from the Soros Foundation to disseminate information on community

foundations in the Ural region.

PCF became a full and active member of the Partnership in 2000.

The major challenges PCF faces are:

- a lack of funds to cover administrative expenses;

- an overwhelming amount of work for its volunteer-basis Director;


55

- the need to convince all or the majority of donors to contribute to an endowment rather

than insist on the 100% distribution of all the donations.

Zhigulevsk

Zhigulevsk, with a population of 50,000, is located right across the Volga River from Togliatti.

While the Volga Power Plant is the largest employer and a few of the city‟s smaller businesses

provide job opportunities, many residents look for jobs in Togliatti. The city is economically

depressed, as is evidence by its low living standards, poor roads and poorly kept buildings.

Zhigulevsk Community Foundation (ZCF) was established in 2000, emerging from “The Way

Home”, an existing NGO that worked with children in the local detention centre. The Director

of the Togliatti Community Foundation was one of the NGO‟s Board members and proposed

reorganizing the NGO into a community foundation. The Foundation Charter and other

registration paperwork were the purview of Elena Garshina, who worked at that time as a press

officer for the City Mayor. A teacher from the local college, Olga Momot, was invited to join

Elena and become the Foundation Director. Olga attended a workshop offered by CAF-Russia

on community foundations and through that was able to develop the vision and plan for ZCF.

ZCF assembled a new Board of Trustees that includes the City Mayor and Deputy Mayor, the

executives of two businesses, and the Chairman of the State Pension Fund in Zhigulevsk. The

Board of Trustees does not provide any help on raising funds, and the ZCF leaders have never

asked the Board to do so.

ZCF continued its former program activities related to “The Way Home” and started fundraising

for the grant competition through the individual networks of the ZCF team24

. The total budget

for the first grant competition was about $70025

. Over the course of a year and a half ZCF

24 Two people

25 20,000 rubles


56

managed to raise $1,800 for its second grant competition, primarily from local businesses whose

leaders were known personally to them. In 2004 CAF-Russia provided ZCF with a challenge

grant of $2,000, conditional upon ZCF‟s raising $4,000 as a match.

The ZCF Director is actively involved as a trainer in an international project implemented in

Russia by Penal Reform International, UK (PRI). This important project involves much travel

and so the ZCF Director is often away. Her partner, employed full-time as the director of a

secondary school located in the Zhigulevsk detention centre, is equally busy. Thus the ZCF team

has very limited time in which to develop the community foundation.

Most of the grant applications are received from the municipal agencies and schools as there are

very few NGOs in Zhigulevsk. In 2004 ZCF distributed $1,800 among 6 grantees. ZCF used

procedures for grant competition developed by the Togliatti CF. Three seminars for grant

applicants were conducted.

ZCF has a tiny office in an old building – in Zhigulevsk that is considered good for a non-

governmental organization. ZCF is adequately equipped to run its programs, though internet

connection is slow and of poor quality.

ZCF‟s granting activity is less than their program activity – largely because of their close

continuous involvement with the detention centre.

ZCF is a full member of the Partnership. It has been agreed that the ZCF Director will not attend

the Partnership meetings, in lieu represented at the meetings by the Deputy Director.

The major challenge facing ZCF can be summed up in one word: survival.

Rubtsovsk

Rubtsovsk is located in Siberia to the South-West of Barnaul, not far from the border with

Kazakhstan. Its population is 160,000. Local industry in Rubtsovsk involves the production of


57

agricultural equipment, such as tractors (Rubtsosk is an agricultural centre), and the manufacture

of construction materials.

In 2000, six representatives of small businesses became candidates for the City Duma. They

decided to form a coalition and establish a local foundation to promote social programs. For two

years the new foundation conducted grant competitions without adequate management in place.

The current Director of the Rubtsovsk Community Foundation (RCF), Tatyana Bukanovich, was

a journalist whose initial contact with RCF occurred while interviewing one of its founders at the

time of a new grant competition. In the course of that conversation it was suggested that Tatyana

assume responsibility for RCF‟s public relations in order to promote the community foundation.

Within a few months the founders approved her in the position of the RCF Director.

Tatyana contacted the Kaluga and Togliatti community foundations for start-up information and

then successfully applied to CAF-Russia for a development grant of $5,000. Following visits to

Kaluga and Togliatti, Tatyana attended several meetings whose aim was the creation and

development of the Partnership.

As a journalist, Tatyana is a well-known figure in the city and well respected by the numerous

contacts she has made in the community, including those in the business sector. Her energy and

style are appreciated, as are her easy-going and innovative fundraising campaigns. RCF‟s

interesting fundraising efforts are popular events in the community.

The major source of RCF funding is several dozen local small- and medium-sized businesses.

While there have been no large donations, the amounts raised in the last three years have doubled

every year and by the end of 2004 exceeded $46,00026

. That same year RCF distributed over

$10,000 in grants among 46 grantees – mostly municipal organizations and initiative groups.

There are very few banks in Rubtsovsk and the only one that could help RCF establish an

26 1,300,000 rubles


58

endowment is SBERBANK – all the others lack the independence to make their own decisions.

This endowment development work is in progress. Upon Tatyana‟s initiative the First Deputy of

the Chairman of the Board of FIABANK from Togliatti and the Director of the Togliatti

Foundation met with the Manager of btsovsk‟s Branch office of SBERBANK.

RCF has office space and equipment purchased with grant money provided by the German

Association for Adult Education and CAF.

Owing to Rubtsovsk‟s remoteness and the consequent difficulty of travel, the RCF Director has

less opportunity to participate in the Partnership meetings, though she has attended all the annual

conferences.

The major challenges RCF faces are:

- how to find new ways of increasing the number of donors and amounts raised;

- how to share its unique experience (working with small- and medium-sized businesses)

with others;

- how to establish endowment funds under the existing circumstances.

Saratov

Saratov, with a population of 900,000, is the capital of Saratov Oblast and is located on the

Volga River to the South-East of Moscow. One of the major industrial centres of Russia, it

produces aircraft, heavy gear-cutting machinery, and computers. There is an oil refinery in the

area. Saratov is home to the Saratov State University – founded in 1909, one of the oldest in

Russia – and to several other universities and colleges. The business environment is vibrant, and

the city enjoys an above average living standard.

Saratov Oblast Community Foundation (SOCF) was registered in 2001 after a delegation of the

Saratov Oblast Government visited an exhibition in Perm where they learned of community

foundations. That was followed by a study tour of the Togliatti Community Foundations, whose


59

materials and documents were subsequently used to establish the SOCF. The community

foundation idea was strongly supported and promoted by the Deputy Governor of the Saratov

Oblast and in 2003, with the Governor‟s approval, the first grant competition was held -

$20,00027

was distributed among 27 grantees. In 2004 the foundation held its second grant

competition and awarded more than $ 60,00028

to 30 grantees. One third of these funds were

provided from the regional budget upon governor‟s decision. The Governor‟s actions made the

foundation „legitimate‟, for without his support contributions from business would have been

impossible. The SOCF has a Board of Trustees that includes representatives of the Oblast

administration. In 2004, after the second grant competition, the Governor agreed to Chair the

Board and doubled the Oblast budget contribution to the Foundation. The SOCF was perceived

as one of the structures created under the patronage of the Oblast Governor.

Ilia Chukalin, a student activist currently working on his Ph.D at the Saratov State Socio-

Economic University, was invited by the former Oblast administration to become Director of the

SOCF. He works at the Community Foundation part-time and on a volunteer basis. While the

SOCF, through Ilia, enjoyed strong ties with the previous Oblast administration, after a new

Governor came into power and recruited a new team, its „support team‟ in the Oblast

Government was considerably reduced. However, there are still several officials who remain

supportive of the SOCF and a Community Foundation line item still exists in the Oblast budget.

The SOCF does not have good direct connections with the local businesses. Funds from

business were received mostly due to the Governor's influence.

The SOCF scope of granting does not differ from that of other Russian community foundations,

excepting that its focus is regional and not local. SOCF serves a huge territory and provides

27 600,000 rubles

28 1,870,000 rubles


60

funding to organizations throughout the Oblast; it reported distribution of $67,000 in grants

among 30 grantees in 2004.

After completion of each grant competition, the SOCF conducted an event known as the

Regional Social Forum. The goal of these forums was to facilitate direct dialogue between the

representatives of government, business and NGOs. The Forums were very well received and

strongly supported by the Oblast Administration. About 2000 participants attended the Second

Forum29

that took place at the Saratov Palace of Sports. The grantees received their certificates

at the forums.

SOCF has a very well equipped office in an office building in the centre of the city. Office

equipment and furniture were purchased though a grant from the Eurasia Foundation. There is

currently one person other than the Director working for the SOCF on a part-time and volunteer

basis – a PR specialist.

The major challenges SOCF faces are:

- re-establishing connections with the new Oblast Administration;

- recruiting new members to the Board of Trustees and the Expert Committee;

- developing connections with local businesses.

Penza

Penza is the capital of the Penza Oblast, located to the South-East of Moscow (halfway from

Moscow to Saratov). It has a population of over 500,000. Local industry – chemical, machine

building, electronics, and construction materials – is varied though not thriving. Penza Oblast

regularly receives subsidies from the Federal budget.

29 The First Forum was attended by 1000 people.


61

Founded in 2002, the Penza Oblast Community Foundation30

(POCF) serves the entire Oblast,

not only the city of Penza. The Civic Union Foundation was established in December 2001 (and

registered on February 27, 2002) upon the initiative of the Penza Association “Svetoch”. The

Association had won support for its project “Community Foundation as an instrument for

civilized charity” at the Volga Federal District fair of social and cultural projects “Saratov-

2001”.

The POCF‟s structure is similar to that of the Togliatti CF since the Penza team used information

and materials developed by Togliatti. POCF‟s Board of Trustees, which includes representatives

of the Oblast administration, industrial enterprises and NGOs, determines the foundation‟s

strategy and helps raise funds.

The POCF enjoys recognition in the city of Penza, as all the events it sponsors have good media

coverage. But as the Oblast is big, the dissemination of information throughout the entire

community, especially in the rural areas, is uneven.

The POCF Director, Oleg Sharipkov, previously worked for an NGO and has no government or

business experience. Oleg is a talented systems builder, a talent much appreciated by those

involved in POCF activities, where guidelines and transparently clear rules need to be outlined.

Oleg is an active networker and has numerous connections with people and organizations in

Penza and in Penza Oblast.

POCF has three primary sources of income: grants from foreign donors (46% of the annual

income31

in 2004), donations from local businesses (30%), and Oblast administration funds

(17%). Contributions from individuals are rather small and did not exceed 7% in 2004. POCF

does not currently have an endowment but is working toward it.

30 Foundation “Civic Union”

31 900,000 rubles or $32,000


62

POCF started offering seminars to explain the project approach and to teach potential grantees

how to write project proposals. The seminars were conducted in different parts of the Oblast and

were attended by representatives of the regional administrations, social agencies, schools, and

NGOs. Grant competitions are conducted twice a year at the Oblast level. The POCF has named

projects and named funds.

POCF‟s granting budget is almost equal to their program budget, though again it is not clear to

what extent the programs are directly related to advancing the foundation. The scope of granting

is very broad, though it is noteworthy that a considerable number of the projects funded were

implemented by schools or youth organizations.

POCF has well equipped yet small office space – so small that individual consultations can not

be held on-site and must be held at a neighbouring NGO. In addition to the Director, there are

three other employees: a grants manager, a PR specialist and an accountant.

POCF joined the Partnership in 2002. POCF Director Oleg Sharipkov this year serves as the

Partnership‟s Chair person and the POCF played host to the 2005 Partnership conference.

The major challenges POCF faces are:

- finding new and more effective ways of raising funds from businesses, given the huge

potential existing therein32

;

- establishing an endowment;

- moving to improved office space (ideally, owned by the POCF, which would increase the

foundation's sustainability).

32 According to Oleg's estimation, businesses spend about 100,000,000 rubles ($3.5 million) a year on charitable

programs in Penza oblast.


63

Oktyabrsk

Oktyabrsk, a small town on the Volga River with a population of 25,000, is only a two-hour

drive from Togliatti. While there are a few businesses in the community, the town‟s major

distinction is that it is home to a cargo railway junction. The economic and living standards in

Oktyabrsk are poor and the town is plagued by a high unemployment rate. Residents who cannot

find work in Oktyabrsk often seek employment in Syzran City (a population of 130,000 and a

20-minute drive distant) or even in Togliatti.

Oktyabrsk Community Foundation (OkCF) was established in 2003 – a project implemented by

the Togliatti Foundation and supported by the CAF-Russia. Prior to its formal registration in

Oktyabrsk, the OkCF had been a named fund of the Togliatti CF.

The Oktyabrsk City Mayor was supportive of the CF project and was invited to join the Togliatti

Foundation Board of Trustees. Delegates from Oktyabrsk often visited Togliatti and vice versa;

therefore, the OkCF organization is similar to that of Togliatti‟s.

OkCF‟s Board of Trustees does not meet on a regular basis and its Grants Committee convenes

when the need to distribute money arises. The Mayor refused to join the Board of Trustees,

claiming involvement would be a violation of the existing federal laws. Recently, however, he

supported creation of another foundation in the town (to support construction of the orthodox

church building).

The OkCF Director, Sergey Rodionov, is a very well-known and respected figure in town,

having been a director of a special school for juvenile delinquents and then an elected member of

the city duma, a position he still holds. As a former educator, Sergey naturally has very good

connections with the local administration‟s departments of education and of youth and culture.

The secretary of the department of education works part-time as the OkCF's grants manager.


64

The sources of funding for OkCF are grants received from the foreign and Russian donors (60%

of the 2004 income) and donations from the local businesses (40%); OkCF's overall income in

2004 was about $11,00033

. The local administration provided office space for the CF – a room

in the library.

There is only one NGO registered in Oktyabrsk, so all the grants go to the municipal

organizations: youth theatre, choir, gym, fitness-centre, schools, local museum, etc. In 2004

OkCF distributed about $3,000 among 6 grantees.

OkCF purchased its office equipment with the help of CAF-Russia.

OkCF is a full member of the Partnership.

The major challenge facing OkCF today is its survival under extremely difficult circumstances.

Kaliningrad

Kaliningrad is the capital of Kalingrad Oblast on the Baltic Sea. A major port and a centre of the

fishing industry, Kaliningrad‟s population numbers 430,000 and it is home to several universities

and colleges. Owing to the economic growth it is experiencing, and its geographic location,

numerous connections are developing between Kalingrad Oblast and neighbouring countries –

mainly Poland and Germany.

Kaliningrad Community Foundation (KCF) was established in late 2003, again with the

important influence of the Togliatti Community Foundation. An IT specialist who formerly

worked in Togliatti and moved to Kaliningrad shared the CF idea with his boss at the RIAC –

Kaliningrad Resource Informationаl Analytical Centre. RIAC is an NGO that “supports any

activity and initiative that contributes to establishment of civil society in the Russian exclave on

Baltic Sea34

”. A grant from the Eurasia Foundation allowed RIAC to establish a community

33 330,000 rubles

34 http://www.koenig-ngo.net/riac/eng.html


65

foundation. Eurasia Foundation showed early interest in Kaliningrad, having had direct contact

with the Kaliningrad Governor, who supported the CF idea. As was the case with other

developing foundations, several people from Kaliningrad visited the Togliatti Community

Foundation to learn from its example.

The KCF was founded by RIAC and two businesses, which comprise the Community

Foundation‟s Board. These founders in turn formed a more inclusive Board of Trustees made up

of local business leaders and members of the Oblast administration, though the Governor

decided against being on the Board.

KCF Director Julia Trifonova was hired at its inception in 2003. She holds a degree in

international relations and has experience in both the business and NGO fields. She is equally

active in the city and in the Oblast, making networking a key priority at this stage of KCF‟s

development. Julia is fluent in English and employs that skill to develop her foundation‟s

international connections.

Supported by the KCF founders, the first grant competition was held in 2004 and managed to

fund four youth projects. An amount totalling $3,00035

was distributed. KCF is currently

working on the creation of a named fund for Sovetsk (another town in Kaliningrad Oblast), as

well as exploring opportunities for receiving funds from Germany.

KCF has a well equipped office.

KCF is a full member of the Partnership.

KCF‟s major challenges are:

- fundraising, since the foundation is just in „take off‟ position;

- fostering international connections (support from the Partnership would be extremely

important);


66

- working with the major businesses represented in the Oblast (support from the

Partnership would be extremely useful in this case as well since its headquarters are

outside the Oblast).

Chaikovski

Chaikovski is located to the east of Moscow in Perm Oblast on the Kama River, not far from

Izhevsk. It has a population of over 100,000 and its major industries are energy production

(power plant), textile and thread, and rubber. Although economic growth is slow, Chaikovski is

the only city in the Perm region where the population grew in the last few years.

Chaikovski Community Foundation (CCF) was registered as a Community Foundation in 2004,

but that in fact was a re-registration of the existing “The Good Order” City Foundation

established in 1999. Michael Chernov, founder of the previous incarnation and now Director of

the CCF, learned of the community foundation concept from Boris Tsirulnikov of the Togliatti

Community Foundation, whom he had met while working on development of “The Good

Order”.

Michael has an extensive personal network: not only does he have experience with youth

organization and NGOs, but he is well known to residents as a karate master and leader of the

local Karate School. Michael is a good communicator and an experienced manager, and people

with whom we spoke in Chaikovski consider Michael the „engine‟ and main asset of the CCF.

The Council of Founders is the governing body in the CCF. It forms the Board of Trustees, the

Executive Board, and hires the Executive Director. Currently the Executive Board is comprised

of three individuals: a Director and two representatives of the city administration (one of them is

the Deputy Mayor responsible for social affairs). Both Michael and the CCF are highly

respected in the city.

35 85,000 rubles


67

The major source of funding for CCF is donations from private businesses – over 73% of 2004‟s

funds were raised from local businesses. Interestingly, 8% of donations are from individuals,

while contributions from the local and regional budgets made up 19% of its 2004 local income36

.

In 2004 CCF reported a $3,200 endowment – the endowment in this case refers to CCF receiving

shares of the local businesses.

The CCF administered three grant competitions and distributed $15,000 in grants in 2004, and

that year also saw the creation of their first named fund. In most cases the target groups of its

granting were children and youth. Motivated by the Togliatti example, CCF has also started a

YouthBank. The CCF has a network of volunteers overseen informally by Michael, and this

group is deemed an important asset of the foundation.

CCF has office space and all necessary equipment.

CCF is a full and active member of the Partnership.

The major challenges CCF faces are:

- forming an endowment when there are no banks and no big companies that could

contribute the initial amount to start it;

- raising sufficient funds when getting small amounts from numerous sources;

- using companies' shares as a form of endowment – will it work?

- inducing large businesses to give to a work in progress.

Nizhni Novgorod

Nizhni Novorod Oblast (NNO) is located in the centre of the European part of Russia, at the

confluence of the two great rivers the Volga and the Oka, occupying a territory of 80,000 square

miles. The industrial sector produces about 40% of the gross regional product and is generally

36 812,000 rubles or $29,000


68

known by its highly developed engineering and machine production. The Oblast is a leader in

small business development, in which 20% of the working population is involved. About 3.7

million people live in the Oblast (1.3 million in the city of Nizhni Novgorod), 78% of which is

urban.

Nizhni Novgorod, the city, is the business and cultural centre of the vast Volgo-Vyatsky region.

With a population of 1.5 million, it is the third largest city in Russia and is the capital of Nizhni

Novgorod Oblast. As one of the key industrial centres in Russia, the GAZ Corporation, the

manufacturers of cars (VOLGA) and trucks (GAZ, GAZEL), is headquartered in Nizhni

Novgorod. It is also home to a major shipbuilding company, as well as a company that produces

engines. Nizhni Novgorod has several universities and colleges, theatres and museums, and its

residents enjoy a living standard that is considered above average.

Nizhni Novgorod‟s business environment is dynamic and vibrant. Most major international

companies and international development agencies have a presence there, as the positive

economic development, favorable geographical location and well-developed transportation

infrastructure make Nizhni Novgorod highly attractive to investors.

Nizhni Novgorod Partnership Community Foundation (NNPCF), serving the entire Oblast, was

established in 2004 as part of the partnership between the regional government and the British

Ministry for International Development. The NNPCF‟s mission is to raise funds locally and

distribute money in grants to support civic initiatives in the social, cultural and educational

spheres, among others. NNPCF is currently tasked with administering the small grants program

implemented as one of the components of the REAREF program. NNPCF‟s founders are Nizhni

Novgorod NGO Association “Sluzhenie” which had been working on the community foundation

concept for a number of years, and the Nizhni Novgorod Association of Manufacturers and

Enterpreneurs.


69

NNPCF Director Vladimir Nefedov, Ph.D, an assistant professor at the Volgo-Vyatkski

Academy of Civil Service, has worked for the Foundation since 2005. NNPCF has two

management boards: a Board of Trustees made of representatives of three sectors of the region:

government, business and NGOs, and a Board that performs two functions – overall management

and serves as a Grants Committee that assesses project proposals and makes funding decisions).

NNPCF has 3 staff members in addition to the Director: a deputy director, a grants manager and

an accountant.

The only source of funding for NNPCF is the grant from the British Ministry for International

Development (BMID), and its primary responsibility thus far has been to distribute money it

receives from BMID.

In 2004 and the first half of 2005 four grant competitions were held; 57 grants totalling

$192,00037

were distributed. All grantees were formally registered NGOs and state and

municipal social agencies of Nizhni Novgorod region.

NNPCF has a well equipped office.

NNPCF joined the Partnership in 2004 as an associated member. In 2005 NNPCF became a full

member of the Partnership of Community Foundations.

The major challenge for the NNPCF is sustainability without BMID money. While all NNPCF‟s

energies are currently directed toward implementing the BMID project, it must start building

sustainability mechanisms.

Angarsk

The creation of a community foundation in Angarsk in 2004 was a joint effort initiated by CAF-

Russia and YUKOS, the major Russian oil company. YUKOS supports social development in

the regions where it operates and hired CAF to assess conditions in several locations and to


70

advise on where to establish a community foundation. And so the conditions were deemed

favourable and the recommendation was made: Angarsk. CAF specialists worked in Angarsk

with the local government, NGOs, and businesses to explain the community foundation concept

and to assemble a group of founders. CAF also aided with the recruitment of an Executive

Director and professional staff.

The Angarsk Community Foundation (ACF) was founded by a local construction company, an

NGO and the Association of Businessmen. The ACF Board included businessmen,

representatives of local administration and NGOs, all well-known and respected citizens. ACF‟s

initial funding was provided by YUKOS. The first grant competition held by ACF was aimed at

supporting summer activities programs for the children of Angarsk. Since 2004 the ACF has

conducted five grant competitions and has administered the municipal grants program.

Including the Director, the ACF consists of a four-member team, and only the Grant Manager

works full-time. The ACF Director, Nikolay Barkhatov, is well known in the city, owing to his

work as an independent journalist and his position as Deputy of the City Duma.

The ACF still depends strongly on YUKOS and CAF assistance, but its goals are to develop

fundraising activities and to work toward its sustainability.

37 5,420,000 rubles


71

Kamensk-Uralski, Shelekhov, Nadvoitsy

In February 2001 the SUAL Group signed a social partnership agreement with all heads of

municipal units in the territories where the Group runs enterprises.

This agreement is unique in that management of the Groups enterprises and the managing

company, administrations of cities and regions, representatives of various municipal agencies

and public structures become equal partners in making decisions on the choice of prospective

directions for social and economic development, optimization of interbudgetary relations in

regions, improvement of local health services and education and development of civic initiative

mechanisms.

A Coordination Council for social partnership and a working group were established to

implement the Agreement and to manage current operations. As part of the implementation of

decisions of the Coordination Council in January 2004 the SUAL Group, one of the world‟s ten

largest aluminum companies, signed a memorandum of understanding with the United States

Agency for International Development (USAID) to work as equal partners to encourage

economic and social development in Russian communities where SUAL operates. This new

partnership between USAID‟s Russia mission and a Russian company is the first of its kind.

The partnership‟s targeted areas of development include local governance and institutions,

healthcare and infrastructure, small businesses and community organizations. Another aim of

the partnership is to increase the involvement of citizens in local decision making.

According to the memorandum, SUAL and USAID finance joint projects on a parity basis. The

partnership‟s activities will directly improve the quality of people‟s lives in diverse locations,

from Irkutsk in Siberia to Kandalaksha in the north-west to Volgograd in the south. Pilot areas

being considered for the first stage of the program (2004-2006) included:

- Kamensk-Uralski, the third largest town in Sverdlovsk region (Population 185,000),


72

- Shelekhov, Irkutsk region (Population 60,000),

- Nadvoitsy, Karelia Republic (Population 19,000).

SUAL and USAID intend to design and co-fund specific activities in the pilot regions, drawing

on existing and prior USAID activities and models operating elsewhere in Russia. One of the

objectives of this partnership project is to establish community foundations in all three cities

mentioned above. CAF-Russia and the Siberian Centre for Civic Initiatives (Novosibirsk) are

participating in the program and providing technical assistance.

Although the project is still in its initial stages we decided to include information on it in our

report as its approach to the creation of community foundations is quite different from other

examples. Perhaps the project signifies a new stage, a promising new model that could be used

both inside and outside Russia.

The key elements of the SUAL approach to the creation of a community foundation are:

- conduct a front-end analysis to understand the local context and develop a community

foundation model most relevant to the existing circumstances;

- consult and cooperate with the city government, key community leaders and businesses

present in the area;

- develop proper community foundation structure and systems;

- invite professional agencies to provide advice, training and technical assistance;

- consider charity as a professional instrument to address community social issues;

- hire a professional manager;

- provide start-up money together with the major companies operating in the region (and

maybe even set up an endowment from the very beginning);


73

- invite a few sustainable and respected local businesses to join the founding members of

the community foundation to avoid the domination of big businesses in determining the

community foundation strategy;

- stay open to new donors and over a few years expand the local donors' base and get

rooted in the local community;

- make the foundation transparent to community to ensure its trust.

It‟s too early to draw any conclusions regarding the effectiveness of this approach, as the work is

in progress. However, the future study of the Kamensk-Uralski and Shelekhov CFs' experience

may prove very interesting.

Organizational Structures of the Russian Community Foundations

While adjusted to Russian legislation and culture, Russian community foundations‟

organizational structures are consistent with community foundation traditions worldwide. They

include governing bodies and staff.

Governing bodies are broadly representative of the communities they serve, but draw most

heavily on business participation. Representation varies from foundation to foundation and

depends on the history of a particular foundation. A community foundation‟s governing body

ensures adequate human and financial resources and actively monitors and evaluates the

organization‟s chief executive officer.

Staff includes an Executive Director and usually several specialists: an accountant, a grants

manager, a PR specialist, and a secretary. Depending on the community foundation‟s financial

situation, staff could work full time, part time or on a volunteer basis.

All the Russian community foundations have adopted the organizational structure developed by

the Togliatti Community Foundation.

The typical Russian community foundation structure includes the following (see Diagram 2):


74

1. Council of Founders made up of people or organizations who formally established the

CF. Formally, the Council of Founders has the supreme power in organization.

According to a Foundation's Charter the Council of Founders determines its strategy and

policies, hires the Executive Director, and monitors and evaluates him/her.

2. A Board of Trustees is formed by the Founders. This Board controls the CF‟s activities,

and monitors and evaluates them, as well as provides assistance in and advice on

community foundation development and ensures adequate financial resources. Usually

the Board of Trustees includes the major donors.

3. A Board of the Foundation is the collective management unit. It approves the community

foundation‟s programs, assesses grant proposals, identifies the successful applicants and

makes final decisions regarding the grant amounts.

4. A Commission for Financial Control monitors the foundation‟s financial activities and

produces annual reports on them.

5. Staff implement all community foundation activities.

Diagram 2. Russian CF organizational structure38

Council of Founders

Staff

Board of the

Foundation

Board of TrusteesCommission for

Financial Control

Diagram 2 shows the organizational structure of the Togliatti Community Foundation. Today

there are three individual founders (members of the Council of Founders39

), fourteen members of

38 Retrieved from the TCF website http://www.fondtol.org/index.php?a=show&idlink=16 on November 20, 2005.

http://www.fondtol.org/index.php?a=show&idlink=16


75

the Board of Trustees, eight members of the Board of the Foundation and three members of the

Commission for Financial Control. The Togliatti Mayor chairs the Board of Trustees, and this

Board, in fact, has the supreme power in organization: it determines the foundation‟s strategy

and policies, and monitors and evaluates the Executive Director. The Council of Founders is not

active but still formally has supreme power. The Commission for Financial Control is the audit

committee.

Common Themes

In this section we describe common themes that emerged from the data collected. These themes

will be further developed and discussed in Chapter 4.

CAF-Russia played and is still playing an important „change agent‟ role in creating

community foundations in the country. Today CAF-Russia combines several important

functions:

- provides financial support through challenge grants to the community foundations

- provides technical assistance to them;

- conducts research and promotes the community foundation concept at different levels;

- provides consultations to companies and local administrations that wish to establish

community foundations.

Grants from foreign donors were very important to the Russian community foundations,

especially at the early stages of their development.

The success of the Togliatti Community Foundation was one of the key factors in the rapid

development of community foundations in Russia. All the community foundations examined

and adopted the TCF experience. It was especially important for local administrations to

39 One of them is the Director General of CAF Stephen Ainger (UK).


76

consider as a model. TCF was proactive in becoming a community foundation advocate and

consulting agency throughout Russia.

Initiators of the creation of Russian community foundations were varied: CAF-Russia;

business+CAF; business or a group of businesses on their own; local or regional

administration; candidates for the local, regional or state Duma; Duma Deputy from the

respective city; local activist, community foundation leader; foreign donor; Togliatti

Community Foundation; and local/regional NGOs. A community foundation‟s nature and

the challenges it faces depend to a great extent on the initiators.

There are two approaches to the creation of community foundations in Russia: a new

organization or founded on the basis of an existing NGO. In the second case the community

foundation could start as an NGO program or could become one of the named funds of the

existing community foundation in the neighbouring city or in the region.

Most Russian community foundations combine features of „pure foundations‟ that raise and

distribute money with program activities aimed at community development. There is no

consensus among the Russian community foundations on the Foundation activities/Program

activities ratio – it seems to depend on the community foundation‟s history and its leader's

background. And there is no agreement about what the word “programs” really means. It

could mean programs aimed at developing philanthropy (a key part of a community

foundation‟s work) or it could mean activities aimed at community development and citizen

involvement or they could mean any other kind of activities not related to the first two. Later

in the paper we will comment on the advantages and disadvantages of community

foundations engaging in programs that are not linked to their mission of fund development

and granting.

There are three patterns of funding. Russian community foundations could have:

- a few donors (or even a single donor) that provide the major part of funds;


77

- many donors that provide small donations;

- a combination of the two patterns mentioned above.

Sources of funding include:

- business,

- government,

- foreign grants,

- individual donations (insignificant now but growing slowly),

- a combination of two or more of the above-mentioned sources.

Endowment – in its classic form – cannot be established in Russia due to existing legislative

norms. The situation in the Togliatti Community Foundation is somewhat unique. One has

to consider that Samara Oblast where TCF operates is one of the two regions40

in Russia

where businesses have a 5% tax exemption (local tax) on the money they donate. In other

places some other models should be explored.

It's much more difficult (if not impossible) to develop a community foundation in small

towns. For instance there is not yet any no evidence that a community foundation could

develop in a city with a population of less than 50,000.

40 The second region is Moscow Oblast.


78

While perhaps sustainable community foundations could be started by corporations in such

cases, there is no evidence of that yet. It is more likely that a community foundation could

be sustained in a city with a population between 100,000 and 1,000,000, all of which would

have enough resources, potential donors, activists and initiative groups. As well, there is not

yet any evidence of a sustainable community foundation in a Russian city with a population

of over 1,000,000 people.

A certain level of support from the local administration is helpful for a Russian community

foundation‟s existence. But the nature of relationship with the local (regional) governments

varies from very close, where the community foundation is under the government‟s control

to a great extent to distanced, where local government is aware of the community foundation

and provides occasional moral support or small amounts of money.

Most community foundations have government representatives on their Board. However,

there is no consensus on the role of the Mayor or Governor. Some community foundations

consider it important or even crucial to have the Mayor or Governor as a Chairman of the

Board, while others strongly disagree. It's important to note that the Mayors and Governors

themselves have sometimes refused to take that position.

Another related issue is receiving money from the state budget. Most community

foundations agree that it is acceptable to administer municipal grants programs. There also is

general agreement among Russian community foundations that state money should not

constitute the major part of their budget.

Community Foundation structures look a bit confusing, especially to non-Russian audiences,

as the names of the Boards and Councils are not in line with the western tradition. But the

structures reflect current Russian legislation. The key contradiction is not related to the

naming but is about the power. Formally – according to the Charter – the Council of


79

founders has the supreme power in organization. Informally in many community

foundations the key governing body is the Board of Trustees. This contradiction will not

likely cause any particular problems unless a group of unhappy founders appears.

The leaders (executive directors) of the community foundations play a very important role.

Ideally they have the following combination of qualities: good knowledge of the city;

numerous connections in the city, good networking and communication skills (presentation

skills in particular); contacts with local administration, understanding of how the government

works; management skills; contacts with businesses, ability to deal with businesses and to

find the right mode and language for that; ability to work under strong pressure; problem-

solving skills, creativity; high energy, ability to work long hours.

Backgrounds that help develop the above-mentioned qualities:

- experience of work for the government;

- management experience (in any sector of the economy);

- work that helped establish numerous contacts and developed personal networks:

journalism, civic activism, youth organizations, Communist Party of the Soviet Union or

Comsomol (youth communist organization);

- experience in business.

In most cases Russian community foundation leaders are selected/hired based on local

visibility, on how well known they are in the city. There are only a few cases when the

founders chose to hire professionals from outside the city or new to the city.


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Chapter 4. Discussion of Findings, Conclusions and Recommendations

What Is ‘Community Foundation’ in Russia?

Russian community foundations present themselves as having certain characteristics.

All community foundations, in common, speak of themselves as being an organization tied to a

geographic community. For some this means a municipality, for others a larger region. The link

with a geographic entity is spoken of with pride. Staff, donors, and grant recipients alike all

speak of their love and hope for their community, their recognition of issues and challenges their

community faces, often related to poverty, youth disengagement, and human rights, and their

wish for the foundation to partake in the makings of a better and stronger community. It is not

unusual to hear the foundation described as a vehicle for addressing socially significant issues in

the community. So, connection with physical, geographic community was universally

acknowledged, as was an emphasis on addressing critical issues in the community.

Also common to all with whom we spoke is the emphasis on the foundation as a fund, and in a

few instances, a fund that will be available forever. For all of them that means access to

financial resources, usually from two main sources: local businesses and governments. Being a

fund doesn‟t necessarily mean that the foundation holds the funds within its own institution,

though some do. It means more generally that the foundation can access funds, which in turn are

dispersed as grants to community organizations.

Businesses, often under the influence of their leaders, are the primary source of local or regional

funds for all community foundations. Quite frequently community foundation staff speaks of its

role in encouraging and assisting businesses to grow new funds or add to current ones.

Governments, mostly local, are the next most important sources of funds, usually by inviting

community foundations to be their partners in certain areas in which they disperse money, such

as culture and recreation. Several foundations also speak of the early funds they had received

from CAF-Russia and other donors such as USAID or Eurasia Foundation, noting that these


81

funds had played a role in leveraging local funds, but more importantly had helped the

foundations get started operationally.

Many, but not all foundations, note their intention to build permanent funds. They see this as

being an important long-term goal, but stressed how challenging this is in an environment where

the concept of giving is underdeveloped, the notion of endowment is unfamiliar, and there is

little by way of tax incentive in place to encourage it. Some endowments are in place, and in at

least one instance, we were told that the permanent fund is in real estate – making it a permanent

asset, but not producing income for granting. Others with whom we spoke do not see building

permanent funds as being a focus in the near future, and indeed we occasionally heard that this

concept requires more study and consideration. However, whether for a permanent fund or for

immediate granting, it is not unusual to hear foundations speak of their role in developing the

culture of giving.

Granting, a third characteristic mentioned by all foundations, is at the heart of their work. The

scope of granting varies from foundation to foundation, as does the amount available. In general

we observed that well implemented granting processes, drawing on the advice of expert

committees, are a source of pride for the foundations. In conjunction with training, many people

with whom we spoke mentioned the support they provide to grantee applicants, either through

workshops or advising. Many foundations also reported that they hold ceremonies, often

inviting the public, on the occasion of distributing the grant funds.

Foundations describe themselves as working in partnership with businesses and/or governments,

either locally or regionally. The most obvious expressions of this were through named funds set

up by businesses and the handling of grant processes for governments. However, other kinds of

partnership were mentioned. Among them are working with businesses on special events,

sharing costs (including salaries in a few instances) and locating programs, such as NGO training

in the foundation, or even launching programs that will move away from the foundation in time.


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Often we often heard that community foundations are able to bridge relationships between

government, business and civil society.

All foundations describe themselves as being governed by a Board of Trustees and a Board of

Directors. In general they have all adopted a layered structure that is composed of local/regional

government and business leaders. In some cases NGO leaders, especially from beneficiary

organizations, also serve on the Board, and we learned that occasionally members of a founding

organization, such as another NGO, also have a foundation board position.

Characteristic of all foundations is staffing. In most cases staff is paid; occasionally they are

volunteer. In some cases specialist staff (in granting or PR for instance) is in place, alongside the

executive director, but in no case does the Board of Trustees actually run the foundation. We

heard consistently that staffing is the key to success, most often personified through the

leadership qualities of the executive director. Indeed, during more than one visit, skilled staff,

connected to key stakeholders and knowledgeable about the community, was described as the

greatest asset of the foundation.

Community foundations are proud of their efforts toward gaining visibility in their community,

but recognize the distance they have to go before becoming really well known. Some referred to

newspaper or radio stories, others to brochures and reports and others to events and

presentations. Some have specialized staff to work in this area and many count on the

participation of community leaders and their willingness to talk about their support of the

foundation as a way to gain credibility, as well as profile and visibility.

Finally, three community foundations have active YouthBank programs under way, with at least

two others giving consideration to this program. YouthBank, which exists throughout the global

community foundation network, though under a different name in North America, is an

organized program to engage youth in community participation. Through the program, whereby

funds made available from the local foundation are granted to community initiatives that


83

somehow focus on youth, participants learn about their community, the needs and issues it faces

and how volunteering and participation can help address those issues. Youth participants also

learn leadership skills and develop their own sense of commitment and confidence. The Russian

YouthBank program shares much in common with similar European programs, though seems to

draw most of its inspiration and learning from the USA, through resources made available by the

Mott Foundation.

In summary, community foundations in Russia describe themselves as geographically located

funds guided by a Board of Trustees comprised of business and government leaders, and led by

skilled staff, whose purpose is to receive funds for distribution through grants to a range of

community organizations. Each of these characteristics will be elaborated upon in the next

sections of the chapter. Before that, we offer the following charts, made available to us by the

Partnership following the 2005 meeting of network members and associates. The first lists

characteristics full members of the Partnership are expected to demonstrate and associate

members strive toward (Table 2). The second shows some statistics in various functional areas

that describe community foundations (Table 3).


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Table 2. Characteristics full members of the Partnership are expected to demonstrate (Partnership of Russian Community Foundations, 2003)

Formal status Formal status of a Russian charitable organization.

Name The organization‟s name includes the words "Community Foundation".

Activities Raises funds and gives grants.

Endowment Has an endowment, the minimum size of which is determined by the Partnership Council once a year.

Services Supports charitable activities and community projects mainly in its respective geographic area through giving

grants, consultations and other services. Grants should be given on a competitive basis and grant competitions

should be organized regularly.

Needs assessment Conducts ongoing monitoring of needs and requests of citizens in its respective area and considers those needs

and requests in its activities.

Innovation Is a community leader and develops philanthropy and grant policies through innovative approaches.

Independence Is completely independent from other organizations and is able to provide support to local community on the

basis of independent assessment.

Boards composition Its Board, Grant Committee and Advisory Board should include people representing all three sectors of the

economy. Those people in turn should involve other citizens in foundation activities.

Annual reports Publishes annual reports on its activities.

Management and operations Has clear and transparent management principles, is open and provides equal opportunities.

Goals, strategy, systems, tools Has clear goals, a strategy to achieve them, plans, systems, tools and methods to evaluate the results.


85

Table 3. Expenses of Russian CFs in various functional areas in 2004

Expenses ($)

Togli

atti

Obnin

sk

Rubts

ovsk

Tiu

men

Niz

hni

Novgoro

d

Zhig

ule

vsk

Pen

za

Kal

inin

gra

d

Okty

abrs

k

Chai

kovsk

y

Per

voura

lsk

Sar

atov

Tota

l

Grant

programs 2,380,000 318,100 362,030 808,359 920,000 50,000 380,000 85,200 90,000 392,846 6,659,502 1,001,000 13,536,695

Other

program

activities 5,205,000 0 627,930 9,053,286 0 1,520,000 320,000 0 24,297 133,549 674,518 0 17,569,787

Admin

expenses 3,187,000 8,400 337,846 2,249,119 1,016,000 380,000 210,000 84,754 214,747 429,418 270,756 195,638 8,586,485

Endowment 6,356,000 0 0 201, 265 0 0 0 0 0 90,000 1,100,000 0 11,057,265

Total 17,128,000 318,100 1,327,806 12,312,029 1,936,000 1,950,000 910,000 169,954 329,044 1,055,813 12,004,776 1,196,638 50,750,232


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The Core Functions of Russian Community Foundations

This section covers the core functions of a community foundation, and in particular how they are

addressed in Russia.

Developing Funds

We begin with giving. The financial resources available to a community foundation are the

single most important means to an end. By that we mean that without funds to give away as

grants, community foundations could not carry out their mission of improving the quality of life

in their community. So, Russian community foundations, as foundations elsewhere, place a high

value on their relations with donors – with those who give in order for grants to be made. And

they are doing that in a country where only a relatively small group in the population is in a

position to make charitable gifts.

As noted above, the culture of giving is not well developed in the new Russia. Historically, in

pre-communist times, giving was encouraged by the church and also occurred within and

amongst family. While some of the church-raised charitable funds found their way to „doing

good‟ in the community, and family support was important to individual success and wellbeing,

there was not a general sense of the community being responsible for distributing its resources

for the benefit of those less fortunate. This phenomenon is in no way unique to Russia; the

history of charitable giving is the same in many parts of the world. What then altered this history

in Russia, as described earlier in the report, was the effect of the communist system. Now, in the

post-communist era, the culture of giving is only in the early days of revival, and it is not likely

to manifest itself in the manner in which it appeared in the past.

Russian community foundations understand this reality. Wisely, they have begun their efforts to

encourage giving by reaching out to local, regional or national businesses. According to the

2004 annual report issued by the Partnership (Partnership of Russian Community Foundations,


87

2005), 90% of funds came from business, though it is not clear if the Partnership included funds

for granting made available through municipal budgets (and hence, perhaps, not gifts or funds) in

their calculation. Nevertheless, this is a striking statistic when considering Russian community

foundations in relation to other countries‟ sources of funds.

For their part, businesses have several clear reasons for wanting to be donors to community

foundations. Many, perhaps most, are inundated with requests for help by individuals and

organizations. While some are frustrated by what they see as begging and a nuisance, others are

unable to respond to the sheer volume of requests, and still others are seeking ways to be good

employers and good citizens. For many, all of these factors have combined to motivate them to

become associated with a community foundation. So, largely as a result of knowing the leader

of the community foundation or peers associated with it, and wanting to address the realities

noted above, they have become donors.

Businesses tend to give by setting up what is known as a named fund, or what community

foundations in other countries might call a donor advised fund. The fund carries the name of the

business and is likely to be designated for a particular cause or group, or in some cases for a

particular organization, such as a cultural or education centre. The funds, for the most part, are

not endowed – that is, they are not permanent – and so each year they are renewed and it is

hoped, made larger. In general it appears that business is open to a portion of the fund

contributing to the foundation‟s administrative expenses. In some instances senior managers

from the business will engage in the granting process by reading applications, advising the

foundation or consulting with colleagues in the work place.

Why the community foundation? One simple answer is that there are no other vehicles through

which businesses can do their giving, though of course they could give directly to organizations.

Many are reluctant to do that, for reasons described earlier – too many requests and little


88

capacity to make good decisions. So there are more significant reasons for their choice. First,

many community foundation staff leaders are well known to business people and have, or are

able to easily gain, trust and confidence. Second, there is no doubt some peer pressure –

competitiveness – exists among business leaders. Third, community foundations have positioned

themselves as being able to help ensure accountability and transparency on the part of the grant

recipients, as will be described below. Businesses recognize and appreciate that foundations

have expertise in this area. A fourth factor is that community foundations tend to be close to

local government, and for some businesses, though certainly not all, their being associated with

the community foundation may give them stature with government. And last but not least,

business leaders see that they have a role in addressing some of the pressing issues all around

them and legitimately believe that community foundations are a resource – in fact, a partner – in

doing so.

For their part, community foundations clearly see business as their key ally in addressing their

goals. They are careful to maintain relationships in various ways – mostly through personal

relationships and contacts. They see themselves in partnership with business and have as a goal

encouraging more businesses to become donors, sometimes by asking business leaders to

approach their peers. While these personal connections are important, there are some reports of

resistance from those not in company leadership roles and some hint that business giving is more

in the spirit of individual giving – which is to say the decisions about how much and for what are

made by the company‟s head or at least senior management and are in fact that person‟s way of

making donations.

This heavy reliance on business giving, appropriate as it is in current circumstances, raises a few

issues. One is related to the issue of developing a culture of giving. Many businesses reported

that they had been doing charitable giving independently for a few years, but that they now feel


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better about their giving through the foundation. But are they giving more than in the past? Or

is it the same amount of money that they would have given before, only given in a different way

now? The answer perhaps lies somewhere in the middle, but it behooves community

foundations to keep in mind that their role is to encourage new giving – that is, bigger amounts

and from new donors – as part of their overall work.

A second issue is linked to individual giving. While there is no incentive through the tax system

for charitable giving, and indeed some individual giving is reported, much of the local wealth

lies with business leaders. Yet very few reported that they give as individuals, believing,

perhaps rightly, that their contribution to the community‟s health is, at least in part, through

providing employment – which in fact means greater investment in their company. Nonetheless,

if the giving spirit is to develop, some leaders will need to step forward and make the act of

giving a public one – they are the best-placed citizens to do so.

Foundation growth, in the view of some with whom we met, will be limited until the culture and

environment for giving and volunteering changes. Business leaders are among those who can

influence this by separating personal giving from business giving, without in any way reducing

the importance of business giving.

Individual giving (and, in some ways, increased business giving) is hampered by the absence of

tax incentives. While this was raised several times during our research, and indeed is being

addressed at all levels of government, though somewhat slowly, there is no evidence anywhere

in the world that generosity is influenced solely by tax incentives. Tax incentives play a role in

stimulating very large gifts, but do not in general affect small gifts from most people. While the

financial capacity for significant giving may still be low in Russia, community foundations may

want to think about ways they can balance their important focus on business with a focus in ways

to stimulate giving from citizens: the culture of giving. There are numerous examples around the


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world of the power of small gifts from many citizens - Russian community foundations may

wish to draw on them.

Giving to Russian community foundations is not only financial. Time and time again we heard

about generous gifts in kind. Sometimes this was office space, sometimes free TV spots or

advertising, sometimes even salaries being covered – and often local government was the donor.

It is easy to underestimate both the financial and the motivational aspects of these gifts, for they

serve to encourage and send a signal of recognition about the importance of community

foundation work, as well as offer tangible support. Not for a moment should these gifts be

downplayed, but a wise community foundation will think of the long term and what will happen

after they are no longer so readily available.

In some ways, community foundations do indeed think about the long term. Many of them are

working toward establishing permanent funds, known also as endowments. But the growth is

slow for several reasons. The concept of endowment is not well known or understood and may

even be received with cynicism and doubt. Today‟s needs are so urgent that it is impossible for

many to think about putting money away for the future. And if businesses in Russia are like

others elsewhere in the world, then they want to be seen as being effective today, as making

good communities for their employees and investors. Finally, there is no legal or tax framework

for endowments: as one person said to us, the legal framework for foundations encourages giving

money away, not saving it.

Yet, endowments are beginning to grow. The Partnership reported that as of December 31, 2004

a total of 33,380,000 rubles (just over $1.1 million USD) were endowed, and that amount is

growing. However, it must be noted that those endowments exist in but 4 community

foundations, while the others have not yet begun that work. A few of the donors were

businesses, even fewer individuals, and some funds were from external sources. In addition to


91

the expected form of endowments, two other examples are worth noting. One is a community

foundation who has received funds to buy a building and sees this as their permanent asset.

While one could argue that this permanent fund reduces the amount available for granting, the

idea is that the site will be available to nonprofit groups for use in various ways, and therefore a

support to them and their sustainability. Another unusual way of building an endowment, not

fully clear at this stage, is to acquire shares in a business, with a dividend being paid out for

granting.

Like everywhere else in the world, special events are part of the giving pattern and are often

considered programs of the foundation. We were told of charity balls and other community

events, all of which raise the awareness level of the community and, in particular, current and

potential donors. The funds raised often help with foundation operating costs, but equally as

often are for a special focus. Foundation staff was heavily involved in these events, but

volunteers seemed to take considerable responsibility as well, recognizing that special events are

demanding and time consuming, often pulling staff away from ongoing work, and that they don‟t

often bring a significant return. In the case of Russian foundations they could be an important

vehicle for raising visibility as well as funds.

For the most part, staff leads fund development. We noted above the important role of personal

connections in reaching donors, especially those of the executive director. Indeed, we observed

funds tend to grow more steadily in a foundation where there is a well-known and connected

executive director. In a very few foundations specialist staff are in place. And in some, board

members are active, either through a committee or as a member of the Founders Board or one

other level of governance.

While there is impressive forward movement in fund development, challenges remain. Several

have been identified above; another is the universal one of explaining why a donor should give


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to the foundation rather than give directly to an organization. There are many answers to this

question, but chief among them is the foundation‟s ability to be a good grant maker. It is to this

topic we will now turn.

Making Grants

Foundations in Russia have developed strong granting processes. The main sources of their

funds to grant are the named funds described above and government. In 2004 the combined

members of the Partnership held 43 grant competitions and gave away 11,377,137 rubles (about

$379,000 USD) to 513 projects (see Table 4). The funds to grant were matched in some cases by

the grantees themselves, bringing the total value of funded projects to 20,730,368 rubles or

almost $700,000 USD.


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Table 4. Russian CFs Grants Programs41

41 All amounts are shown in rubles.

Togli

atti

Obnin

sk

Rubts

ovsk

Tiu

men

Niz

hni

Novgoro

d

Zhig

ule

vsk

Pen

za

Kal

inin

gra

d

Okty

abrs

k

Chai

kovsk

y

Per

voura

lsk

Sar

atov

Tota

l

# of grant competitions 8 4 8 3 2 1 3 1 2 3 6 1 43

Funds distributed, s 6 329 831 298 903 362 030 1 019 102 920 000 50 000 234 700 85 200 110 452 392 846 6 220 734 1 870 000 11 377 137

Grantees contribution (match) 5 148 476 1 190 205 - 2 402 464 1 225 000 380 000 272 535 100 000 78 773 - 2 347 500 1 930 000 8 736 272

Total budget of projects supported 11 478 307 1 489 108 - 3 421 566 2 145 000 430 000 507 235 180 000 189 225 - 8 568 234 3 800 000 20 730 368

Total number of applications 330 42 111 78 122 14 61 30 5 82 137 131 1 158

# of projects supported 182 33 46 29 23 6 18 4 6 36 95 30 513

Average size of grant 34 780 10 200 6 000 35 141 40 000 7 150 13 038 20 000 20 000 - 65 481 62 333 -

# of seminars conducted 14 8 3 10 5 6 8 4 3 0 8 5 80

# of seminars for applicants 7 4 3 6 3 3 6 3 2 0 4 4 49

# of seminars for grantees 7 4 0 4 2 3 2 1 1 0 4 1 31


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Community foundations received 1,158 applications for grants and were able to fund almost one

half of them, even though it is likely that not all applications were funded at the level requested.

Foundations partner with local government in various ways, such as working together to

establish – or at least share information with each other on community needs. But chief among

them is granting. It is not unusual for the foundation to take on the responsibility of allocating

the government‟s resources to those organizations who qualify for such municipal support. This

is true mostly in sports and recreation, youth-related organizations and cultural organizations.

Various processes for the foundations to do so, such as receiving and reviewing grant

applications, are in place. In essence this is a service to government, insofar as it brings the

foundation‟s expertise into play (we heard in one instance grantees suggest that if the foundation

could take over all municipal funding, then efficiency would rise significantly). Such granting

further raises the profile and credibility of the foundation, and positions both government and the

foundation as understanding the importance of working in partnership. In this case, that means

working toward a common goal with each partner bringing its particular strength and assets to

the arrangement.

This is an attractive element of granting, but it is not without its cautions. One is the flexibility

the foundation has in who actually gets the grants. The list of prospective grantees is proscribed,

meaning there is no space for other organizations who might offer similar programs, though they

can come to the foundation through other competitions. Another is how the granting process is

tied to the overall relationship with government described elsewhere in this report, and the

influence of that relationship. Yet another is that this could be costly for foundations and the

extent to which government is prepared to contract this service for a fee remains unclear. And

the final caution about heavy reliance on government as a source of granting funds is that

governments and priorities change, and we were told on several occasions that there is no


95

guarantee that the same arrangements will continue. Nevertheless, working with government in

granting is an area with continuing potential.

Business donors are often involved with grant making processes too. Their named fund is

usually directed to a cause or issue (sometimes influenced by the community foundation) based

on community needs and priorities. Their degree of involvement varies from as much as

reviewing applications and identifying potentially successful organizations or being part of the

foundation review committee to as little as receiving a report from the community foundation.

In many instances a business leader whose business is a major donor (often a bank or a large

local employer) is on the board of the foundation and so has a chance to shape the direction of

granting through that participation.

Grantees, overall, have high regard for the community foundations‟ processes. While we did not

speak with any organization that had applied and never received a grant, we did meet with some

who had occasionally been turned down. They described their disappointment, but quickly noted

the fairness of the process meant that they would not always be successful.

Fairness was often mentioned. Donors and grant seekers alike commented that the foundations‟

process was transparent and responsible. That process usually includes publicly announcing the

grant competition, assisting grantees with applications, drawing on an expert panel to review and

recommend successful applicants to the Board, and writing reports at various stages during the

implementation. A few foundations have sustained contact with grantees throughout the grant

period.

In most cases staff has responsibility for granting, though it is the Board who approves grants

and to whom the volunteer panels of experts report. Those volunteers reported a high degree of

satisfaction themselves, and without question the processes used by most foundations give great

comfort and confidence to donors.


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It is not clear, though, to what extent the NGO sector in various communities knows about the

foundation and feels it could respond to the request for grant proposals. Without generalizing

unfairly, we often observed that grants were made repeatedly to the same organizations, and

several grantees told us that they had applied because they knew someone in the foundation,

usually the executive director. The pattern of repeated grants to the same group is not

necessarily bad, but it does beg the question of how far a foundation‟s reach really extends. In

some ways this is a matter of time, but foundations might want to think now about how to extend

their processes to organizations not yet part of their sphere.

And we encourage them to also think about the impact of their granting – indeed, at least one

person with whom we met raised a concern about impact. Within the community foundation

world often there are at least two ways to think about impact. Can small grants have impact?

And will the issue or cause contribute to a healthier community? Most community foundations

in Russia, for clear reasons, make small grants. Small grants to many organizations raise the

profile of the foundation, because there are many recipients. Small grants can go a long way,

especially if they are the funds that provide something no other funder will offer. And grants

have to be relative to size: in reality there is a limited amount of money to distribute at this stage.

On the other hand, community foundations, ever mindful of their mission to build stronger

communities, should always ask themselves how any particular grant contributes to a stronger

community. Native costumes, fountains and statues, and support for choirs may have great

impact by connecting people with their past, building their identity, and fostering a sense of

community pride, but how do they compare with issues of human rights and poverty? No

community foundation should ever abandon the important work of fostering pride in heritage and

community, but each community foundation should ask itself if this is how their granting can be

most effective.


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Community foundations are also encouraged to explore the scope of their granting. We were

impressed by the commitment of community foundations to give grants to a broad range of

causes and issues. Though we were surprised, on a few occasions, to learn of grants being made

for infrastructure support – community supports that in most circumstances are paid for by the

municipality. Without question some communities have more resources than others. Those with

poor economies and high poverty may be unable to cover all that is expected. Perhaps in those

communities it is appropriate to pay for roads and street lights, and especially if a non-

government donor so requests. Community foundations make the case that ensuring the streets

are safe and allow people to connect physically with each other is important to building

community capacity. That is surely true, but the question is whose role is it to make sure that

happens and how are the foundation‟s resources best used?

The question of how a community foundation uses its resources is linked to the question of who

makes the choices about a community‟s priorities and needs. One possibility is that a

community foundation relies on data, research or assessments collected by governments,

community organizations, or through independent polling/surveys.

Another possibility is that a community foundation on its own examines issues and priorities.

Some experienced community foundation practitioners suggest that a community foundation,

almost by definition, is deeply knowledgeable about its community and has its finger on the

pulse of issues, needs and priorities. They suggest that community foundations have this

knowledge because of their broad networks and their ability to gather information and undertake

research. This approach speaks to the need for community foundation capacity – it is not easy to

stay well informed and deeply knowledgeable about the whole community.

Still another possibility is that a community foundation regularly conducts a formal community

wide needs assessment (though some frame these as mapping exercises that focus on assets and


98

potential rather than needs), while yet another source of information is donors themselves. This

latter possibility raises an interesting question: do people of wealth and leaders in business

determine a community‟s issues by directing funds in certain directions, and if so how do

foundations ensure that the best interests of the community, not just the donor, are being served.

This is not a uniquely Russian community foundation issue – it is being discussed around the

world.

Two points are critical to this discussion. The first is that there is growing agreement

everywhere that no one sector – government, business, or the not for profit, philanthropic sector

can address community issues independently of the others. So the question is not really who

does what. The question is how do we determine and address the community‟s priorities

together? What skills and resources do we each bring to the task? Each local situation will vary,

depending on its economic and social situation, and it is communication among the various

sectors that will help answer that question.

The second point is that wise community foundations are likely to combine collaborative work

with community leaders and donors (as suggested above) with their own independent

relationships, knowledge, influence and reputation to develop and implement rigorous processes

to determine how their grants – that is, funds entrusted to them by donors – will have the greatest

impact in their community. Making good decisions as a result of thoughtful analysis and

collaborative processes is about accountability – to the community and to donors.

Community foundations often offer resources to their community other than through grants. The

next section looks at the services they provide

Providing Program and Services

Community foundations around the world often describe themselves as having assets other than

financial ones to offer to their community. They have knowledge about community issues, good


99

connections and links throughout the community, skills and credibility. And is it is not

uncommon for community foundations to build on these assets and provide a range of services

that may be non-financial in nature. That is true in Russia as well. Nearly all foundations

provide training and support to grantees or applicants – 45 seminars in 2004. Some work with

successful applicants as they implement their projects. These kinds of programs are entirely in

keeping with a community foundations‟ mandate and indeed may help achieve fund

development and granting goals.

On the other hand, a few foundations offer workshops to NGOs, sometimes in partnership with

others. In 2004, 80 workshops of a general nature were offered to NGOs. Occasionally a

foundation has convened others in the community to look at common issues, though this is

strikingly less frequent in Russia than in CEE. One foundation has a formal program to provide

services, training and consulting to the nonprofit sector. Several foundations commented that

their community needs analysis was helpful to government and, as has already been mentioned,

many foundations see themselves as providing services to businesses and government by helping

them understand the importance of giving and granting. One community foundation is actually

hosting a start up of a child-focused program that will become independent over time.

While offering direct services to the community, mostly to NGOs (but excluding grant applicants

and grantees as well as donors), may add value to the foundation‟s offerings, there are some

potential drawbacks. It has been the experience of small community foundations in Canada and

elsewhere that such undertakings can be a distraction from the core work of the foundation

(developing funds and engaging in good granting). There is also a possibility that the identity of

a community foundation is unclear in the community – what do they really do? - is the question

that is asked. And there are financial costs to providing some services to the community.

Finally, community foundations exist to build the capacity of others to serve the community;


100

their special role is in granting so that others can develop the skills to be resources and trainers

and supports within their sector. We stress, though, that the convening role of community

foundations, especially among grantees and grantseekers, as well as donors is an important one,

and is seen to be part of the core work of a community foundation.

As in all that is characteristic of community foundations, there is great variation in what is

appropriate and what is possible. Providing services and programs beyond granting and fund

development, and the convening of grantees, may be appropriate in some circumstances. But we

urge community foundations, especially in their early days, to think with care about how much

they take on and why they are doing so.

One program of Russian community foundations, of a slightly different order, stands out. That is

YouthBank. Modelled after similar programs in Europe and North America, this initiative draws

young people into the life of their community by inviting them to join YouthBank and become

volunteers and young grant makers. YouthBank welcomes a new generation as participants in

community life, offers then the chance to develop leadership skills and to be a bridge to others.

A small amount of money is given to participants by the foundation for which they then research

and determine how the funds will best be allocated. At present three community foundations in

Russia host YouthBanks and a few others are thinking about beginning one. YouthBanks around

the world are closely linked, though the Russian groups have been most inspired by Europe and

the USA through exchanges and visits as well as website interaction.

All the work of a community foundation has the potential to bring it visibility. Like everywhere

else in the world, community foundations are not well known („the best kept secret‟); like

everywhere else in the world, Russian community foundations are making efforts to become

better known.


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Raising Visibility

The first question to be asked is “who needs to know about the community foundation?” For

some the answer is that donors and grant seekers need to know. Others would answer by saying

that to be owned by the whole community means to be known by the whole community. No

matter what the answer is or who the audience is, it is hard nearly everywhere to make the

foundation known, and especially when its resources and, to some extent, its impact are modest.

This is likewise the case for Russian foundations, and yet we were struck by the serious and

thoughtful efforts being made by community foundations to raise their visibility. One example,

though an inadvertent way to raise visibility, is simply by making the grant competitions known

through the newspaper. Another is through the grant giving ceremonies often covered by local

media and attended by community members. Still others are through TV ads or newspaper

stories, and of course special events gave opportunities to raise the foundations‟ profiles as well.

Only one or two foundations have dedicated staff for this function, but all put some resources

and efforts into this work. There is a long way to go, but as foundations grow and think about

how they wish to present themselves and to whom, their visibility will surely grow.

Sustainability and Strategies of the Russian Community Foundations

It has been said that community foundations are entrepreneurial and innovative mechanisms for

addressing long-term community sustainability. They have earned this label because they meet

several classic characteristics of social entrepreneurship: someone in the community, often a

leader from government, business or the NGO sector, sees a need and brings passion and skill to

creating an answer to that need. A plan is organized, financial and human resources are

mobilized, and the idea begins to take shape and spread.

In many ways it is fair to identify all community foundations as such, but we suggest it is most

appropriate in countries like Russia and others where the community foundation concept is

emerging, and less true in North America, for instance, where huge funds have been accumulated


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and in some ways are barriers to nimbleness, flexibility and risk taking – also hallmarks of

entrepreneurial undertakings.

Nearly all Russian community foundations have come into being as the result of the passionate

interest of a local leader, one who is known to other community leaders and has deep roots in the

community. These leaders have been able to mobilize resources and participation, and have

brought new thinking and new ideas to their community. And not only have they been able to

develop their idea in the local community, but they have been able to encourage similar activities

elsewhere. CAF-Russia and The Partnership for Community Foundations have both served as

the locus for collecting and sharing skills and ideas and information; they have been able to

foster this entrepreneurship, though they themselves have not been actors at the local level.

Yet, while community foundation development in Russia can be called entrepreneurial, it may

lack one characteristic of such undertakings. It is not yet clear to what extent sustainability of

foundations themselves will be an issue, but all solid entrepreneurships take the matter of

sustainability very seriously, right from the beginning.

We understand sustainability to have several components, of which financial security is only

one. But it is a good place to begin. Community foundations in Russia, like everywhere, tend to

charge a fee on each of the funds they receive. The fees vary in size. They help the foundation

cover their expenses, and over time can contribute significantly to operational expenses. As

well, as already noted, most community foundations receive some in-kind support, sometimes

quite generous in nature. Some hold special events to raise operating money. And some may

have „angels‟ (CAF-Russia could be in this category) who understand the need for operations

and start-up funds and so help get the foundation known so it can attract more funds and build a

profile in the community. All of this is essential, but may be short lived.


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In-kind support rarely lasts over the long term: start-up money is just that – early money; special

events seldom bring in significant amounts given the effort to hold them; and fees on funds

seldom cover all operating costs, even though there is a myth that they can in time.

The issue of financial sustainability is global, and the whole community foundation field needs

to think very strategically about a response to this. For now, we caution Russian community

foundations about expanding too quickly by taking on activities not directly related to their core

mission that will drain their resources and by offering more services to donors than they can

afford. We see opportunities for foundations to offer their expertise to other granting bodies,

such as local authorities, and suggest they may be able to contract to deliver those services

efficiently and effectively. We suggest that they develop very clear messages for donors about

the cost of working on their behalf and urge them not to shy away from speaking about the cost

of running their foundation.

But sustainability is about more than money – in fact, paying attention to the other aspects of

sustainability can help with the financial challenges. Even thinking about long-term

sustainability can be helpful, as it forces the foundations to plan accordingly. Planning for the

long-term, with an emphasis on strategic thinking, is critical to the long-term success of any

foundation. We noted that long term planning is rare in community foundations, for acceptable

reasons, but urge that this become a priority for boards and staff over the next few years.

In the course of thoughtful long-term planning, several important issues, in addition to financial

ones, will no doubt come up. One has to do with leadership. While some foundations with

whom we met have terms for board members, it is not clear how rigorously they are adhered to

and how well formal mechanisms have been established to recruit new board members in a

manner that is inclusive and broad. It is possible that (as is the case in many places around the


104

world) recruitment methods will just perpetuate an inner circle of who you know – in the case of

Russia, business people – to become new board members. Board members are the face of the

community foundation; they are the public leaders. Having strong, well-supported and well-

respected board members who can speak with clarity and conviction about the community

foundation and who reflect the community‟s makeup is one of the keys to sustainability. Board

members have an opportunity to set an example of leadership that will send a positive signal to

the community, encourage more donations and position the community foundation as an

important and worthwhile community resource.

Leadership emanates from staff as well as board members. Without question several of the

community foundations in Russia enjoy strong staff leadership. In fact, it was not unusual to

hear donors, grantees, and board members alike quickly indicate that the staff and especially the

executive director were the greatest assets of the foundation. This is encouraging and critical to

success. The challenge now will be to ensure there is continuity in such leadership, for staff

leadership will inevitably change over time. We urge community foundations to include

discussion about succession planning within staff as part of their long-term, strategic thinking

and planning.

The Partnership for Community Foundations has a role to play in sustainability. Two major

factors led to the creation of the Partnership in 2003: the initiative of the Togliatti Community

Foundation and a grant from the Ford Foundation. We have enough evidence to say that without

those two factors the Partnership would not have emerged and would not exist in its current

form. Back in 2003, most Russian Community Foundations leaders were not ready to spend

time and energy on developing something outside their respective cities. Many of them

questioned the very idea of the Partnership, and they did not see any way of using their limited

resources to support the Partnership. “Our donors would never support me in spending resources

outside our city”, said one of our informants.


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Today the situation is different. The Partnership has developed as a way for peers and

colleagues to meet and exchange information and ideas, statistics and data, and to learn new

skills. Through its regular meetings it serves to motivate and inspire continued commitment, and

to offer a venue for being exposed to speakers and leaders from other areas of life not ordinarily

available to individual community foundations. A network such as this one has other potential

as well. It can promote the concept of community foundations to a larger audience than any

single foundation can, and turn that attention into resources for collective community foundation

efforts such as a website or even new funds, and it can serve to encourage good practice in all

foundation activities.

The role of the Partnership can be described as strengthening the performance of local

foundations as well as building the capacity and visibility of the movement as a whole. But this

role should be discussed, examined and developed into a clear Partnership strategy that reflects

the needs and interests of all the partners. Many leaders of the Russian community foundations

expressed the need for developing the Partnership‟s long-term strategy and clarifying its mission.

We hope that the Partnership will examine some of its own practices through a process of

strategic planning. Ongoing leadership that comes from various foundations and includes a

balance between newly established and more established foundations, and a good mix of gender

and age will be important to its ongoing capacity. Other areas we hope a planning and thinking

process could focus: A willingness to accept that even in Russia one community foundation can

and will differ from another; an effort to provide support and resources to members at varying

stages of development including the start-up stage; and a willingness to be inclusive about

membership.

We suggest that the Partnership carefully consider if it‟s time to formally register the

Partnership. An informal self-directed network can be effective enough in satisfying its


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members‟ needs, and requires fewer resources to sustain than a formally registered entity. One

of the key indicators of readiness for formalization to be considered by the Partnership could be

willingness of the network members to pay membership fees or at least cover some expenses

related to the network functioning.

Working collaboratively with CAF-Russia is something to be admired and continued, but we

also urge stronger links between the Partnership and peer groups outside Russia, including active

participation in WINGS-CF. Language is an issue for Russian participation globally, but there

are English speakers in many community foundations, especially young ones who are the very

future of foundations and could benefit themselves, their own foundation‟s future and the

movement within Russia by broader participation.

The Partnership for Community Foundations has significant potential for adding to the

sustainability of the concept in Russia and we strongly encourage its support and development.

Recommendations

As community foundations individually and collectively plan for their future – a future that holds

promise as well as challenge - we offer several recommendations that we believe can be helpful.

We recognize that each community foundation not only finds itself at a different stage of

development but also exists in its own unique context. So we encourage each foundation to

spend some time first reflecting on these recommendations in their own context, and then

addressing them in ways that continue to honour the history and special nature of their local

community.

As they do that, we urge them to keep in mind that each community foundation is part of a larger

growing movement that has the potential for heightened profile and visibility for the concept of

community foundations and for foundations individually. That means there will be some

common features among all community foundations, a fact that the Partnership has embraced


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and is attempting to strengthen. We hope that the Partnership will continue to grow in its role of

mutual support and we add recommendations to them as well to individual foundations.

1) Community foundations build on current efforts to stimulate the culture of giving by

encouraging new donors, including businesses and especially individuals, and increasing

funding levels from existing donors;

2) Community foundations reach out to organizations to whom they have not previously made

grants so that their granting can have a wider and deeper impact and they can become a

greater resource for addressing community issues;

3) The leadership of community foundations, including the Boards and executive directors,

develop long-term plans that will ensure their ongoing success and the continuity of

leadership at all levels;

4) The Partnership for Community Foundations be supported and strengthened so it can become

a more inclusive resource for emerging and established foundations, and become a more

active participant in global networks, including WINGS;

5) Community foundations, perhaps through the Partnership, continue their efforts to gather and

maintain statistics and data that will tell the individual and collective story of community

foundation development to various audiences, including donors, the media, governments and

other funders.


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