Have You Received Charitable Donations From Russian Oligarchs?

By Laurence A. Pagnoni, MPA

Over the past two decades, hundreds of U.S. nonprofits have received massive philanthropic support from Russia’s superwealthy, often celebrated with named scholarships and buildings. Yet within the nonprofit sector, there is little conversation about this.

In light of the horrific war that has been unleashed on Ukraine, do you wish to continue to steward and receive their support?

Today we ask, “What are your policies and procedures for receiving Russian megagifts — and megagifts overall?”

I hope that this blog, and the research we’re sharing, will foster a discussion within your nonprofit that will help you scrutinize donations from abroad and guide your decisions about what your donor acceptance policies will be. Later on, we’ll share a guide for creating or refining your donor acceptance policies.

Context: Anti-Corruption Data Collective

David Szakonyi, Assistant Professor of Political Science at George Washington University, co-founded the Anti-Corruption Data Collective to reveal transnational corruption flows and push for policy. He’s researched how money laundering flows through the West through charitable giving. Two years ago, as part of the collective, Szakonyi and Casey Michel, an investigative journalist, pieced together a database of charitable giving by Russian oligarchs to more than 200 of the most prestigious nonprofits in the United States.

David addresses the implications of that support in the wake of the Russian invasion of Ukraine.

To be clear, an oligarch is a wealthy individual who usually controls government processes. Oligarchs use their money as influence to reach their political goals.

The comedian Stephen Colbert says “oligarch” is Russian for “rich guy, don’t ask where his money came from.” Russian oligarchs are all business associates of Vladimir Putin. There are no women oligarchs as far as we know, and all the oligarchs contribute to politics, an even less transparent arena.

The anti-corruption database is not online for security reasons and because oligarchs are very litigious. However, you can request access to the database by contacting David Szakonyi if you’d like to use it as part of your donor due-diligence process.

$400 Million Given Over the Last 15 Years to Nearly 400 Nonprofits

The investigation started with a list of the 150 wealthiest Russians. The data was supplemented by scanning news reports.

The research team started with the United States because there is better access to U.S.-based giving data through NOZA, Donor Search, and similar megadonor databases.

Information on the oligarchs’ giving was sitting in plain sight. Yet there were more than 200 legal entities that surfaced connected to the 150 wealthy Russians, so they also had to be researched.

Of those, nine oligarchs surfaced. Of those nine, Europe was more the locus of giving than the United States because that’s where the oligarchs’ mansions and yachts are, and where their children attend school.

The nine identified oligarchs gave around $400 million to U.S. charities over the last 15 years. Two of those individuals have been especially active.

Upwards of 400 U.S. nonprofits benefited from their giving, all easily recognizable institutions, spanning the entire field of nonprofit service, from higher education to cultural institutions.

In fact, the Anti-Corruption Data Collective did an extensive investigation of the giving to cultural institutions titled, “America’s Cultural Institutions Are Quietly Fueled by Russian Corruption,” which you can read here.

Of note, the donors gave multiple times over a span of as many as eight years. It’s presumed that the nonprofits cultivated those donors as one would with any major donor. The oligarchs are extremely conservative yet have donated to progressive organizations like BAM—The Brooklyn Academy of Music.

In fact, The New York Times has covered the charitable giving of oligarchs as far back as October of 2019. Because of their previous record of giving, long before Ukraine’s invasion, many oligarchs have justified their relationships with the nonprofits: “You accepted us then, how dare you reject us now!” Related to this dynamic, smaller and midsize nonprofit fundraisers and prospect researchers often say that they are just following the anchor charitable institutions, so it must be OK.

In the online news portal HyperAllergic, Valentina Di Liscia summed it up: “The database illustrates how oligarchs used philanthropy to transform themselves ‘from malign actors to anodyne businesspeople,’ [reporter Casey] Michel writes for New York Magazine, not unlike members of the Sackler Family, who concealed the lethal source of their fortune behind endowments and named spaces.”

Many of the nonprofits who received gifts are listed there, along with the size of those gifts. About a dozen of those nonprofits agreed to talk to the researchers at the Anti-Corruption Data Collective, but most did so with a sigh of reluctance. If your nonprofit has received donations from Russian oligarchs, David Szakonyi suggests that you address the history of the gift, as well as show support culturally to Ukraine and consider having your nonprofit donate to the humanitarian aid efforts.

Reputation Laundering

Reputation laundering is a key strategy that oligarchs use to convert money into access and influence in the Western world. Putin’s inner circle uses philanthropy in the West to launder their reputations and gain access to American and European high society. Here’s a CNN report on this issue. If you don’t do your donor due diligence well, donors could be using your nonprofit as a pawn to cultivate influence as part of their wider strategy abroad.

In fact, the U.S. Department of the Treasury and the U.S. Department of State sanctioned more than two dozen individual Russians recently, piling the financial pressure on the elites who have influence with Russian President Vladimir Putin in the wake of Russia’s invasion of Ukraine. You can see the list of those who were sanctioned at this link.

Maybe Receiving the Gift Is Not So Bad?

It’s difficult to have a fixed rule about which oligarch’s giving is acceptable or not. In fact, once the sanctions hit, some of the oligarchs came out against the Ukrainian invasion. The point is that you have to be diligent and help your nonprofit think through its gift acceptance policies related to this dilemma and others similar to it. The National Council of Nonprofits offers this prescient guidance about how to establish or refine your gift acceptance policies.

Knowing what your donor is trying to achieve in making the gift is fundamental to each party. We’ll be discussing this and other advanced prospect-research issues on our next webinar, on June 15; register today.

A big thank-you to Jay Frost and Donor Search for sourcing this material through their recent webinar with David Szakonyi on the same topic. I am indebted to them for their terrific work.

Have you ever had to address megawealthy donor access within your fundraising work? Please share with us below, and please forward this post to a colleague who may appreciate it.

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