Interviews and articles
The Observer's "Persons of the Year" 2006
Ukrainians should be rightly understood as a generous lot. Walk around Kyiv, for example, and watch the people taking care of stray animals outside their flats, or dropping their pocket change into the cups of street singers and the old, whose pensions sit firmly on the poverty line. However, organized charities are often seen as foreign entities, and the best-known do come from abroad. But that perception is changing, and charitable foundations created by members of Ukraine's industrial elite are gaining the limelight.
Foundations created by Victor Pinchuk and Rinat Akhmetov have been particularly active, and are setting the pace for what observers hope will be even more work for the public good from Ukraine's top businessmen. And this pace is picking up. The Viktor Pinchuk Foundation and the Foundation for the Development of Ukraine, funded by Akhmetov's SCM Corporation, are engaged in an increasing number of projects in fields as diverse as legal aid, fighting tuberculosis and HIV/AIDS, and post-secondary education.
Giving Wisely
Both foundations aim to do more than just throw cash at a problem. Thomas Eymond-Laritaz, Director of the Victor Pinchuk Foundation, points out that the organization has "to focus on what has the highest impact in order to modernize society." In education, for example, "We believe that it is by focusing on university education, and also on young leaders in their 30s and 40s (via the Aspen Ukraine Initiative) that we can make the biggest impact."
The Foundation for the Development of Ukraine follows a similar line of thought. On its web site, the foundation is equally candid about being "determined to eliminate the roots of social problems through in-depth activities and shift from a number of separate charitable and sponsorship activities to a comprehensive social responsibility strategy of SCM Group and its shareholders."
The two organizations evolved from the social involvement of their founders, and contributions still come from outside the foundations. For instance, Rinat Akhmetov still gives significant amounts via commercial entities such as his football team FC Shakhtar Donetsk. A donation of $ 300,000 was given to support the families of the 170 victims of the Russian Pulkovo Airlines crash in Donetsk oblast in August 2006. From treats for Donetsk oblast's schoolchildren for Valentine's Day and Christmas to $ 500,000 in aid to the citizens of Alchevsk, the eastern-Ukrainian city that experienced a catastrophic communal heat failure in the dead of last winter, FC Shakhtar's range of public involvement is quite high.
However, the creation of the Foundation for the Development of Ukraine in July 2005, from funding by Systems Capital Management, which is 90% owned by Rinat Akhmetov, set a new tone for social assistance from his holdings. Also, while the foundation commits itself to longer-term projects, it is more concentrated in scope, and works on public health, post-secondary education and Ukraine's cultural heritage.
Anatoly Zabolotny, Director of the Foundation for the Development of Ukraine, notes that, "The reason why we have chosen to work in these three areas lies in their close connection with the development and success of the country. If we look at the future of the country we would like to have a healthy and well-educated nation closely connected with its history and culture. We are very well aware that these three areas, both in Ukraine and in other countries of the former Soviet Union, lack reforms and require the implementation of better practices, and more striking examples and projects, which might be replicated and further become everyday reality. This is the mission and strategy of the Foundation: to create star projects."
Likewise, the Victor Pinchuk Foundation was created in order to bring together various projects that Interpipe Corporation and Pinchuk personally were already involved in. This includes work on legal clinics for Ukrainians who cannot afford their own lawyers under the Legal Assistance Fund, which according to the International Renaissance Foundation extends back to 2001, as well Pinchuk's well-known patronage of the arts.
Eymond-Laritaz said that, "the Viktor Pinchuk Foundation develops and supports projects that contribute to the modernization of Ukraine and to the emergence of a new generation of Ukrainian leaders. Its six fields of activity and current projects have been carefully selected to contribute to those goals.
These include:
• Health (Neonatal Centers, fight against HIV/AIDS)
• Education (Stipends Program, Kyiv School of Economics, Aspen Ukraine Initiative)
• Culture (Contemporary Art Center, Film with Steven Spielberg, Chamber Orchestra)
• Human Rights (Legal Clinic/Legal Aid with the Soros Foundation)
• Ukraine in the World (Yalta European Strategy, Amicus Europae Foundation, Brookings Institution, Peterson Institute of International Economics, International Crisis Group, Davos)
• Local Communities (Dnipropetrovsk, Jewish Communities)
Leadership, finance and participation
Both organizations make a point of actively participating in the fields that they have chosen. For example, Viktor Pinchuk's work regarding human rights has been on-going and thorough. The International Renaissance Foundation in Kyiv says that the creation of the Legal Assistance Fund in 2004 was the result of a joint effort between George Soros and Viktor Pinchuk. The project has grown from 24 clinics in 17 oblasts in 2004 to 35 clinics in 21 oblasts currently. Future expansion should cover all of Ukraine's oblasts in 2007.
At the same time, the Legal Assistance Fund's two founding organizations have cooperated on improving the quality of their work. Together, they have worked for the "establishment of a wide-ranging and effective system for the provision of legal assistance that meets European standards," as IRF notes. "The concept of how to implement it was developed with the Ministry of Justice, the Attorney's Union of Ukraine and other NGOs, and sanctioned by Presidential decree."
The Foundation for the Development of Ukraine is embarking on a long-term project that will raise the level of care in Ukraine, through its most ambitious project is in health care. FDU Director Zabolotny emphasizes that the Foundation's fight against drug-resistant tuberculosis is important for the Ukrainian medical establishment. "Although the project on drug resistant tuberculosis (DRT) is less than one year old we have managed to discuss and approve the DRT treatment protocol at the level of Oblast authorities and this is a breakthrough for Ukraine because there weren't any DRT treatment systems in Ukraine whatsoever. Next month the training program for doctors and technical personnel will be launched."
The DOTS+ treatment program that will be launched is being implemented by the World Health Organization under the aegis of the Ministry of Health of Ukraine and with cooperation of the Ministry at the Donetsk Oblast level. FDU is providing more than just the money to fund the project, however, in that public awareness and media exposure is also part of the organization's remit. Also, the foundation has provided the framework for the project, including the desire to ensure a successful exit strategy.
Zabolotny remarked, "from the very beginning we have been saying that in four years, upon the completion of the project, the authorities should be ready to bear total responsibility for the DRT treatment system. And this is one more strategic approach of the Foundation: we are not only implementing the projects, we are also changing the attitude of stakeholders to the problem when it's necessary."
Charity begins at home
While it might come as no surprise to an observer that FDU's DOTS+ project is being implemented in Donetsk Oblast, the inclination to work close to home shouldn't be denigrated. After all, the only privately funded chamber orchestra in Eastern Europe is in Dnipropetrovsk, and is backed by the Victor Pinchuk Foundation.
Both organizations are engaged in projects that, while centered in Kyiv, are considered as being of national importance. FDU is a partner in the refurbishing of the Metropolitan's House at the Sofia Kyivska National Reserve. The project, located at the very heart of Ukrainian culture, is also an example of how the foundation wants itself to be understood. FDU initiated the creation of an Advisory Council to oversee the project and ensure its progress. Zabolotny sees the project as important, "not only in view of reconstruction of the building but also because of creation of system of public participation in life of National Reserve Sofia Kyivska, creation of development strategy as contrasted to survival strategy. For us it was important not only to provide support for this facility which is considerably important from the culture's point of view, but also to teach the management to apply state-of-the-art approaches and management mechanisms."
The Victor Pinchuk Contemporary Art Center is another example of a Kyiv-based project that aims to work for the edification of others on several levels. While the art center has garnered a lot of attraction for the works displayed, its role as a benchmark for others in Eastern Europe's industrial elite to gauge their own patronage has been commented upon in the English language press. The role that politics played in the location of the center should not be forgotten as well. Eymond-Laritaz remarked that, "The fact that Victor Pinchuk is no longer involved in politics helps a lot: it makes things easier!"
Still a long way to go
Being involved in charity projects of the magnitude that the Foundation for the Development of Ukraine and the Victor Pinchuk Foundation are requires contact with the government whether the principals are engaged in politics or not. Government ministries and state financial organs are factors in determining not only how effective a project will be, but also in the amount of bureaucracy attached.
While Zabolotny said that the legislation regarding charities in Ukraine is the best in the former Soviet Union, both directors point out that there is a long way to go for the country's legislation to become philanthropic-friendly. Bureaucracy, taxation and incoherent legislation, sometimes inappropriately derived from laws for commercial entities, are all issues. Still, both point out that the most pressing problem isn't a legislative matter, but an issue of mind-set. Donor organizations exist in Ukraine, and charitable activity is increasing, but the need for a step-change is required. Both organizations see that they are at the forefront of this change, and as Eymond-Laritaz claims, "We believe that the best way to develop modern philanthropy in Ukraine is to set an example. And this is what we are trying to do."
