Transcript Слайд 1 - Georgia

Russian Endowment Law:
How It Works
Natalya Kaminarskaya
Tbilisi, July 2, 2008
About Donors Forum
DF Basics
• Professional association
• 44 participants in 2008 / 15 participants in
2002
• Cumulative budget - 160 mln US $ a year
• Networking and services to participants
and philanthropic society in general
• Partners in different sectors
DF Mission
The Donors Forum is a coalition of private and
public Russian and Foreign grantmaking
organizations that actively implement the
Forum’s mission through their cooperation
The DF mission is to enhance the development
and effectiveness of organized grantmaking that
is aimed at supporting the development of a
democratic, civil society in Russia
What We Do
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Meeting space
Annual conference
Regular research
Competitions to promote philanthropy
Representation
Strategic partnership with different stakeholders
State of Philanthropy in Russia
Main Characteristics of NGO Sector
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Number of NGOs – 228 000
About 5% of all legal entities in the country
Contributing about 1% to GDP
55% of population never heard of them
20% of NGOs – charitable by name, but only 5%
charitable by fact
• Number of donors – less than 0,1% of NGOs
– 100 private and corporate foundations, 30 community,
20 endowments
Russia’s «Specific» Way
• Philanthropy quite developed
• Market share – 1.5 bln US $ with
companies 2-11% net income contribution
• State and business – major players
• Citizens – rather passive and low profile
• State involvement – controversial
State: Latest Contribution
• 2001 – closed list of “approved” foreign
donors
• 2005 – changes to NGO law on
registration and reporting
• 2006 – Endowment law
• 2008 – Concept paper on philanthropy and
volunteering
• 2008 – draft law on tax deductions for
individuals
Endowment: Backgroung
Brief History
• First mentioned – beginning of 90s
• First attempt – draft foundation law 1998
• NPO leaders meeting with president Putin –
December 2005
Endowment “Race”
• March 2006 - president Putin meeting
with business leaders
• March 2006 – Annual meeting of Russian
industrialist union
• April 2006 – Philanthropic forum with
Medvedev as guest speaker
• June 2006 – Draft law
• October 2006 – Draft law in the parliament
• December 30, 2006 – Law signed by
president
Unique Features
• Timing – extremely quick
• Process – experience analysis and
stakeholders involvement
• New mechanism for Russian philanthropy
• Complex regulation: new law and changes
in tax code
Endowment Law: Details
Endowment *
Part of assets belonging to an NGO, that
is established at the expense of donations,
given by a donor (donors) to an NGO, and
transferred by the NGO into trust
management by a managing company in
order to receive income used for financial
chartered activities of this NGO or other
NGOs according to provisions of the law
*) From the Federal Law 275, December 30, 2006
Endowment Basic
• Who: individuals or legal entities
• How: donation or bequest
• What: cash
Themes to Support
• Education
• Science and scholarship
• Healthcare
• Culture
• Physical culture and sports (not professional)
• Arts
• Archiving
• Social assistance (support)
Two Approaches
• NGO – endowment owner and the only
benefactor
• Specialised organisation for endowment
management (foundation) – endowment
owner; the only purpose of establishment
– creating endowment, disposal and
distribution of income generated by it in
favor of other benefactors
Approach 1:
NGO*) – endowment owner
Donor
NGO – endowment owner
Endowment
Endowment income
Managing company
*) N/a for a certain types of NGOs
Approach 2: Specialised
Organisation (Foundation)
Donor
NGOs –
benefactors
Specialised organisation - foundation
Endowment
Endowment income
Managing company
Limitations
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Themes – 8 specific only
Amount: not less than 3 mln roubles (125,000 US $)
Period: not more than 1 year
Type of funds: cash only
Required Body: Endowment board (i.e. Council for
endowment disposal)
Managing company - trust management of funds
Investment mechanisms
Types of income generating activities for NGO-owner
Only type of activities for specialised NGO
Logic
Decision on setting up
endowment
Approach selection
NGOowner
Foundation
Documents and Board of Trustees
Changes to the Charter
Registration
Endowment Board
Fundrasing
3 mln roubles +, 1 year
Raised!
Haven’t raised 
Managing company
selection
RETURNING FUNDS
ENDOWMENT
CREATED!
Things to Consider
• What do you need endowment for?
– 5-10-15 year strategy
• What management structure to use?
– Who’s going to manage?
– Control system
– Responsibilities
• Fundraising
– Who and how is going to do it?
• Administrative funds?
• Board members?
To Be or Not to Be?
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Expensive
Long way
Complicated
Limitations
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Long term
Sustainable
Innovative
Tax breaks
perspectives
• New donors
Endowment Law:
First Results and Lessons Learned
First Results
• 20 endowments in 2 years:
– 3 foundations and 17 NGO-owners
– 6 regional and 14 Moscow based
– 16 education, 3 culture, 1 healthcare
• 10 more planned till the end of 2008
Lessons Learned
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Simple
Integrated in legislation
Significant tax deductions included
Info campaign
Training and methodical support
Challenge grants and/or awards
Thank you!
Questions?
Natalya Kaminarskaya
[email protected]
+7 499 978 5993