"Private Philanthropy in Service of the Public Interest,” Remarks by Jonathan Fanton as part of the Spaso House Discussion Series
February 14, 2008 | Speech | Higher Education in Russia & Africa

Thank you, Ambassador Burns for that generous introduction and for the invitation to join you here today. As all of us know, the relationship between Russia and the United States is critical to both nations and has passed through many transformative moments. We are fortunate at this critical time to have you as a bridge of understanding between our two countries. Your deep appreciation and respect for Russian history and culture remind us that our two countries have long-term common interests that must be nurtured. Our collective hopes for a just and peaceful world depend on a constructive relationship between Russia and the United States.

When Ambassador Burns asked me to talk about the future of philanthropy I accepted his invitation with enthusiasm. I believe that private philanthropy and the emergence of non-profit organizations – civil society – are essential building blocks for healthy, stable, democratic societies – not just in Russia, but the world over.

We know that Russia is in a period of transition to a more open society where private markets and non-governmental organizations are playing a more important role.
I am an historian by training and history tells us that transitions are uneven and take time. Early moments of high expectation for change inevitably give way to a reality that sees some gains and some setbacks. But I remain hopeful about the future of Russia and that is why The MacArthur Foundation has made a long-term commitment to working here.

I want to talk with you this evening about MacArthur here and around the world and to comment on the growth of philanthropy in Russia.

Let me start with MacArthur. The MacArthur Foundation is a private philanthropic institution, established in 1978 on the death of its founder, American businessmen, John D. MacArthur. All of the Foundation’s assets derive from his estate; we raise no funds, accept no contributions. We are governed by an independent board of trustees; the Foundation has no connection to the U.S. government, or to any for-profit activity.

As one of the largest private foundations in the U.S., MacArthur has assets of nearly 6-1/2 billion dollars and makes grants each year of 260 million dollars – in the U.S. and 60 countries around the world. We have offices in Moscow, New Delhi, Abuja, Mexico City and soon, Beijing.

In the United States we work on improving opportunity for low income families, preserving affordable housing, improving public education, and reforming the juvenile justice system.

Our work outside the U.S. focuses on biodiversity conservation, international peace and security, population and reproductive health, human rights and international justice, and global migration and mobility of people.

MacArthur’s largest financial commitment outside the United States is here in Russia, where we have had an office since 1992. We come to Russia in the spirit of partnership and respect for its people and its prominent role on the global stage. Our early work supported cooperative research between Russian and American scientists and policy experts on disarmament.

This work contributed to the development of cooperative threat reduction programs that have done so much to make the world more secure and maintain positive momentum in U.S.-Russian relations over the years. MacArthur’s first decade in Russia also featured a research and writing grants competition that supported more than a thousand scholars. And early grantmaking in the conservation field helped strengthen Russia’s network of protected areas and encouraged the growth of sustainable forestry.

But the centerpiece of our work here is a 20-year, 100 million dollar commitment to strengthening higher education and scholarly infrastructure. MacArthur provides support to 24 state universities – from St. Petersburg State University to Tomsk State University to Far Eastern State University (in Vladivostok) – 3 private universities: the New Economic School, the Moscow School of Social and Economic Sciences, and the European University at St. Petersburg – as well as 11 independent policy institutes, 3 journals, and 5 scholarly networks.

Much of our work is carried out in partnership with the Ministry of Education and Science. At the center of this activity is the program on Basic Research and Higher Education in Russia, or BRHE, which supports twenty Research and Education Centers at universities across Russia. Funds donated by the MacArthur and Carnegie Foundations are matched by federal and local government sources.

The program has helped reinvigorate the research mission of Russian universities, integrating research into university teaching and giving Russian faculty access to the most advanced scientific equipment. The BRHE centers are actively addressing brain drain and the ageing of the Russian professoriate. The centers have provided nearly 500 post-doctoral positions to help keep talented, young scientists in the country and engaged in both research and teaching.

The centers are already yielding results useful to Russia’s economy: for example, a new device to produce nano-structured ceramic materials for aerospace machinery invented at Tomsk State University, pliable “shape-memory” alloys ideal for durable coronary stents created by metallurgists at Urals State University, and more disease-resistant crops are under development at St. Petersburg State University. In the past three years, the 20 Research and Education Centers have received nearly 130 patents on new technologies.

We have made a similar investment in the social sciences, to build objective research in sociology, political science and economics, disciplines that had been highly politicized during the Soviet period. We support nine research Centers of Advanced Study and Education, working on topics like development challenges in Siberia, tolerance and national identity, and Russia’s integration into the world economy.

We also work with independent think tanks like the Center for Social Policy and Gender Studies and the Center for Anthropological Research, which are tackling challenging social issues like gender discrimination and the effect of globalization on rural communities.

Our investment in universities and scholarly life reflects our belief that a robust and independent intellectual community goes hand-in-hand with democracy. Can you think of any democratic country without academic freedom? Or the reverse, an authoritarian regime that tolerates strong, independent universities?

MacArthur also supports organizations in Russia working in the field of human rights and the rule of law. During the past 12 years, we have supported more than 80 civil society groups working on these topics – in Moscow but also in the regions, from Rostov to Perm to Tatarstan.

We focus our efforts on police reform, strengthening the ombuds offices throughout the country, and supporting those who take human rights cases to the European court of Human Rights when appeals within Russia have been exhausted.

Let me give you some examples. Organizations like the Moscow Helsinki Group issue annual reports on the state of human rights in Russia. Others, like the Glasnost Defense Foundation, monitor media freedoms. MacArthur has given support to groups such as Strategiya in St Petersburg, JURIX in Moscow and the Association of Ombudsmen, based in the Moscow region, that work to strengthen Russia’s regional ombudsmen. This institution continues to grow rapidly, up from 28 regions in 2005 to 43 in 2008. And we have supported groups like the Center for the Promotion of International Defense in Moscow, Sutiazhnik in Ekaterinburg and the Black Earth Media Center in Voronezh that take cases to the European Court.

One issue is of special concern: the reform of the police. The police are the area of government with which citizens most frequently come in contact.

Trust and respect for law enforcement are essential in a democracy and depend on proper behavior – by the police. We know that police in every society often overstep their authority and abuse people. MacArthur supports the INDEM Foundation, for example, which has been looking at how police and citizens interact in specific settings, such as on the roads or when they need to get internal passports or residence registration. INDEM then works with government and the police to improve how they treat citizens.

The issue of rule of law is a central theme of MacArthur’s work in the U.S. and in all the countries where we have offices. Everywhere we work we believe that higher education and the rule of law are pillars of an open society where citizens are free to develop their individual potential, and they contribute to economic growth and prosperity.

When we started in Russia there were not many Russian charities or foundations. That has changed. There are about 30 private foundations in Russia, 20 corporate foundations and 25 community foundations – all told about 75 with more in the process of formation. In fact, when Russian corporate donations are taken into account, the cumulative giving of Russian philanthropy far exceeds that of western donors in Russia.

MacArthur has been pleased to support the formation of the Russian Donors’ Forum which has 17 full members, including Russian donors like the Vladimir Potanin Foundation, the Dynasty Foundation, and the Victoria Foundation. U.S. members include MacArthur, the Ford Foundation and the Charles Stewart Mott Foundation. The Forum provides a venue where we can talk about the craft of philanthropy and explore opportunities for working together.

I am pleased that MacArthur has partnered with the Potanin Foundation, which provided funding for the BRHE program, and that major Russian corporations, such as Alfa Bank and RUSAL have joined MacArthur and other Western donors in support of the New Economic School.

The rise in philanthropy has coincided with an expansion of Russian civil society. Civil society groups have grown exponentially in recent years to a half-million by one count – though perhaps only a tenth of these are considered active. The burgeoning Russian-language Internet – which is extremely free and open by global standards – has provided a powerful new platform for civil society groups, attracting a younger generation and new ideas.

As I think about the emergence of philanthropy and civil society here, I am reminded of a Russian proverb: “These are just the flowers; the berries will come.” Given continued economic prosperity and favorable regulations – such as the new law allowing organizations to establish endowments and other proposed measures that could promote more giving – I think philanthropy and civil society in Russia are likely to develop into a more prominent force in this country and around the world.

As Russian philanthropy takes shape, I want to offer some observations about what values and characteristics animate the MacArthur Foundation. While I acknowledge that our traditions are different, and that all foundations do not have to approach philanthropy in the same way, I hope there may be some useful insights here.

MacArthur believes that sound public policy depends on high quality, objective research – research that gets the questions right and the facts straight. We are realistic about the present but optimistic about the future. We reject the notion that poverty, ignorance, and strife are inevitable parts of the human condition. Each of them is the accumulated product of choices made by men and women in many countries over time. We believe strongly that when people have the power to choose, they have the power to change.

In trying to spark that change, the MacArthur Foundation does not embrace any ideology other than a commitment to free expression and a passion for truth. We seek fresh ideas and new approaches.

Promoting pluralism of thought, action, and innovation is a central contribution that foundations make to society. We believe foundations are at their best when they take the long view and experiment with models for change. They work better through others, not directly, by giving creative individuals the freedom to pursue their own ideas and by building the institutions which allow concerned citizens to come together. In the U.S., Russia and elsewhere we try to give good, smart people the chance to exercise their talents and apply their knowledge and ideals to the benefit of society. We play no role in politics.

We believe that our reputation is as important as the money we have to donate. Let me mention a few elements of a foundation’s reputational assets.

Integrity is important. A foundation must operate in the public interest and earn the public trust. This means honest accounting, appropriate compensation practices for Board and staff, a clear and respected conflict of interest policy, fair and transparent procedures for choosing areas of work, making individual grant decisions, and evaluating the foundation’s performance.

All of our activities in Russia are fully transparent, published in an annual report which lists all our grants.

Good judgment in selecting people and institutions to support is a key element in building reputational assets. And this means due diligence on the front end when a selection is made and thoughtful tracking of outcomes against promised deliverables.

Objectivity is essential. While thoughtful people disagree, I think the large public trust foundations like MacArthur should place a premium on evidence-based action, not ideology. We do not like to be defined on a right to left political spectrum. Words like objective, fair, evidence-based are what we believe most accurately characterize MacArthur. I was happy to hear during my last trip to Russia that no grantees thought there was any “taint” to accepting MacArthur funds. When a research finding comes from a MacArthur-supported project, we hope the association with MacArthur adds to its credibility. When our grantees produce high quality, objective analyses that contribute to public policy, the beneficiary is Russian society, rather than any partisan agenda.

The final element I want to talk about here is impact. Our reputation depends on being able to demonstrate that our support – financial and other – makes a difference. So we set very specific, measurable goals for each field – a reduction in maternal mortality in Mexico, less police abuse in Nigeria, acres of land conserved in Bhutan, numbers of affordable housing units preserved across America– and we monitor them. And we often document an initiative so we know why it works or how it fails.

Regardless of the results, the important thing is to be transparent. The level of public trust in MacArthur and our reputation is high because we disclose how we are doing with both successes and failures. No one believes any person or institution always succeeds.

By building a reputation as an honest, fair, open-minded broker, a foundation can bring people with opposing views together to talk about contentious issues. This is what we call the convening power, the capacity to create a safe haven for real conversation. As MacArthur has secured its reputation it is called upon to do more than just give away money. Some examples include the prosecutor of the ICC asking me to convene humanitarian NGOs, worried that the Court’s indictments in Northern Uganda would derail the peace process. Both the prosecutor and the NGOs learned from the conversation.

Just last week I was in Louisiana where MacArthur works on juvenile justice reform bringing together police, prosecutors and judges to work with civil society groups to build a system that offers alternatives to incarceration to young people who have committed non-violent crimes. The judges told us about how important MacArthur’s name was in getting people who might not trust each other but trust us to come to the table and talk.

As Russian philanthropy matures, I expect it will move beyond supporting scholarships, hospitals and social services to more engagement with public policy issues. And as it develops the reputation of being objective, non-ideological, nonpolitical, and transparent – then it too may have a role to play beyond giving money.

As I said at the outset, MacArthur has a long-term commitment to Russia and to helping build Russian philanthropy. As a foundation, we welcome the growth of private philanthropy in Russia’s. We look forward to partnerships with Russian philanthropy in strengthening Russian Universities and the rule of law in Russia. We have followed with interest the new role of the Public Chamber in supporting NGOs. And we are encouraged by the work of that Chamber's Charity Commission, which is dedicated to improving the overall legal framework for educational, cultural, and other non-profit institutions.

Foundations in Russia are already beginning to serve as a bridge spanning three sectors – state, market, and society – bringing money and sustained attention to ideas and institutions that will add even greater vitality and resiliency to this young democracy.

You can count on us to help.

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