Two events this year have significantly influenced the understanding of charity’s role in Ukraine. The first was the Philanthropic Roundtable held by the Viktor Pinchuk Foundation at the World Economic Forum in Davos. It was the first philanthropy-related event to be hosted there by Ukraine and featured prominent speakers such as George Soros, Dr Tadataka Yamada, Global Health Program President at the Bill and Melinda Gates Foundation, Ukraine’s First Lady, Kateryna Yushchenko, Chair of the Ukraine 3000 Foundation, and Robert Harrison, the Clinton Global Initiative’s CEO. The second event was the conference ’Development of charity in Ukraine: from positive practices to favourable legislation’ held by the Ukrainian Philanthropists Forum (UPF). This brought together a record number (over 80) of CEOs of active private and corporate foundations in Ukraine. They engaged in a heated debate on various topics.

Two events this year have significantly influenced the understanding of charity’s role in Ukraine. The first was the Philanthropic Roundtable held by the Viktor Pinchuk Foundation at the World Economic Forum in Davos. It was the first philanthropy-related event to be hosted there by Ukraine and featured prominent speakers such as George Soros, Dr Tadataka Yamada, Global Health Program President at the Bill and Melinda Gates Foundation, Ukraine’s First Lady, Kateryna Yushchenko, Chair of the Ukraine 3000 Foundation, and Robert Harrison, the Clinton Global Initiative’s CEO. The second event was the conference ’Development of charity in Ukraine: from positive practices to favourable legislation’ held by the Ukrainian Philanthropists Forum (UPF). This brought together a record number (over 80) of CEOs of active private and corporate foundations in Ukraine. They engaged in a heated debate on various topics.

Welfare vs policy

 One common topic arose at both events. Participants not only discussed experiences and practices of charitable aid (in Davos they focused mainly on international experience). They also raised the question of two basic types of charity, abbreviated in Davos as ‘welfare’ and ‘policy’ philanthropy. This promises to be one of the key subjects in the development of charitable aid in transition countries, including Ukraine. Indeed, this dilemma of ‘welfare’ versus ‘policy’ philanthropy is a fundamental element of Ukraine’s philanthropic environment.

Indigenous foundations

There are two distinct categories of charitable organisation in Ukraine. The larger one consists of indigenous foundations formed by large-scale Ukrainian private capital. These focus almost entirely on supporting public health, education and cultural initiatives. Two foundations in this context are ‘Development of Ukraine’ and ‘Ukraine 3000’. The former was established by Rinat Akhmetov and this year alone has allocated US$40m to improving cancer treatment in various Ukrainian regions as well as supporting education and research initiatives. Ukraine 3000 is building an up-to-date clinic for seriously ill children that will be furnished with modern diagnostic equipment. Many private companies and individual businessmen in Ukraine allocate philanthropic funds this way for welfare purposes at local level.

These factors have influenced the approaches to philanthropy development by top-level state institutions and officials, including the Cabinet and President. Just after the ‘Orange Revolution’, a law was drafted on ‘maecenatism’ (welfare-oriented charitable aid in post- Soviet countries). It was no accident that responsibility for drafting it was delegated to the Ministry of Culture and not the high-profile Ministry of Justice. Business people and officials see charitable giving only as a means to support economically disadvantaged people in the fields of health, education and culture.

International funders

The second major group of charitable foundations and programmes comprises private international foundations and western governments’ official development programmes. They focus primarily on philanthropic support for the ‘policy’ area, ie they support development of civil society per se. Their funding has allowed many NGOs in Ukraine to strengthen and expand their advocacy activities in key areas such as citizens’ participation in decision-making, human rights, election monitoring, gender and environmental issues, and government transparency and accountability. Without this support, domestic and foreign experts recognise, Ukraine would not have reached its current level of democratisation. But only one Ukrainian foundation, the Viktor Pinchuk Foundation, funds both welfare and policy-related activities. In partnership with the International Renaissance Foundation and the Open Society Institute, the foundation contributes to the reforms in citizens’ advocacy, essential for continuing democratisation. Why such a big difference between the motivations of domestic philanthropists, who act mainly in the welfare area, and those of various western foundations and government development programmes, most of which support civic activism? The simplest answer is that high-ranking officials tend to react negatively to civic initiatives that challenge state institutions’ lack of transparency and accountability. Big business and policy-making, with rare exceptions, are closely connected in Ukraine. Ukrainian philanthropy operates in this context, and it explains domestic donors’ inclination to operate mainly in the welfare area. This situation also makes clear the main challenges we face.

What we must do

 European standards of donorship must be applied to Ukrainian philanthropists’ activities. It concerns many aspects of their daily work. The UPF pays special attention to transparency and accountability, and requires its members to observe its code of ethics, which strongly recommends publishing annual reports. But most philanthropic bodies in Ukraine are not yet ready to comply consistently with any requirements, even modest ones. Non-transparency is still the norm and charitable assistance in the welfare field is subject to serious anti-corruption monitoring. This unwillingness to behave transparently and accountably is directly connected to the absence of effective laws to regulate charitable assistance. This is why the UPF collectively lobbies (at Cabinet level) for legislation on philanthropic activities shaped by European standards in the field, including the Model Statute for Public Benefit Foundations developed by EFC. The UPF also promotes proper donorship as charitable support in the form of grants to NGOs for socially beneficial projects (as well as pushing for greater transparency in ad hoc giving). Such donorship involves project proposals reviewed by experts and well-prepared budgets followed by public reports on how grant money is spent. Following these practices automatically ensures greater transparency and accountability. To achieve such a form of charitable giving, there must be more policy-oriented philanthropy, otherwise the system of charitable assistance is unlikely to evolve effectively.  

By Yevhen Bystrytsky, International Renaissance Foundation

Published in Effect magazine, Europеan Foundation Сenter, AISBL, Belgium
www.efc.be/effect

			Khrystyna Basiliya, Public Relations Manager tel: +380 (44) 461 97 09 | fax: +380 (44) 486 76 29 email: basiliya@irf.kiev.ua office: Kyiv, Artema Street, 46, Head Office