18 January 2018, Moscow – an open discussion on the current state and perspectives of endowments in Russia was held as part of the 9th Gaidar Forum, a major venue for annual meetings of thousands of economists, sociologists, managers, financial experts and businessmen.

The expert discussion The Endowment: Lessons of the Decade marked the 10^th anniversary of the Russian endowment market. Culture of contributions, best endowment practices, future of the market and reserves for endowment development were among the topics discussed at the roundtable.

According to Lyudmila Panteleeva, member of the Board of Trustees of the Specialized Endowment Fund of the Peterhof Museum Reserve and a market expert, 175 specialized endowments with total capital exceeding RUB 21 bln have been established and currently function in Russia. Endowments are organized in 40 Russian cities: Moscow (84 endowments), St. Petersburg (about 30), Tomsk, Samara, Omsk, Perm, Rostov, etc. At least half of them are university endowments, but this tool is also used by NGOs, arts and culture institutions.

‘Although endowments started to emerge in Russia at difficult times – during 2008 crisis and subsequent hard years – they have always had a positive growth dynamics,’ said Lyudmila Panteleeva. ‘The largest endowment in Russia is Skoltech, followed by the MGIMO University, European University at St Petersburg and St Petersburg State University. Endowments of the Russian Military Historical Society and the State Hermitage Museum are also quite substantial. We hope that this market develops and we see significant growth shortly.’

Participants of the discussion agreed that a relative stability of the market has a downside – endowment funds do not grow as fast as they could. Roza Voronina, Director of the Office for Non-Profit Organizations from Gazprombank – Assets Management PLC, told the audience that existing endowments are predominantly small and develop slowly. ‘The key task for the next decade is to raise funds and expand,’ she noted. ‘Unfortunately, decision-makers are practically unaware of this tool. It is critical to build awareness. We are extremely grateful to the Vladimir Potanin Foundation for its activities in this area, exceptional support and roll-out of endowments. To increase their number is not enough; we need to improve their quality.’

Oksana Oracheva, General Director of the Vladimir Potanin Foundation, outlined internal and external reasons behind the relatively slow development of endowments.

‘First of all, we still lack knowledge and skills to build endowments. Specific legislation exists, and, whether we like it or not, it requires expert knowledge. The second internal reason is a personal factor. It often happens that someone is eager to create an endowment, but then loses their interest and the endowment closes down. The third factor is the uncertainty of an endowment in the organizational structure. The fourth one is a lack of experience in a long-term planning: an endowment is designed for several generations and it is difficult to develop a long-term tool without understanding the status of our organizations in 50 year-time.’

Speaking about external reasons, slowing down the market development, Oksana Oracheva noted that specific legislation on endowments is not embedded into the general legal context, and, moreover, environment promoting development of endowments – such as governmental incentives or educational programs – is practically nonexistent. ‘To develop the tool we need skilled professionals. The Endowment Growth Strategy Program by the Vladimir Potanin Foundation inspires people, provides them with required competences and integrates them into professional community. Once they complete the program, they are ready to move on and develop. To my mind in the next decade we need to invest in two areas: further work on the legislation and awareness-building.’

Oksana Oracheva reminded that the Vladimir Potanin Foundation continues its efforts to create professional community: 6 April 2018 the Foundation and the Moscow School of Management SKOLKOVO are organizing the second Endowments-2018 Forum.

Graduates of the Endowment Growth Strategy Program gave a perspective of the best market practices. Marina Petrova, representative of the MGIMO University’s endowment, told about fundraising strategies and work with graduates. Ivan Kopytov presented the fastest growing endowment of the last year – the MISiS University’s Fund. ‘One of the secrets of a successful fundraising process is to get it based on identity, sense of belonging to a community of graduates. One has to remember this identity or build it.’

Alexey Timofeev, President of the National Association of Stock Market Traders, told the experts about Association’s efforts to change legislation on endowments: for example, recently they have sent a letter with suggestions about updating the chapters on endowment management of the Law on Endowments.