Since Russia invaded Ukraine in late February, the United States, the European Union, and Britain have imposed sanctions on Russian billionaires close to the Kremlin, putting a spotlight on their ties to charitable causes. It is just the most recent round — after the Sacklers and Jeffrey Epstein — of big-dollar donors causing complications for the groups they support and is one more reason for nonprofits to vet their donors.
One count from the Anti-Corruption Data Collective estimates that just seven Russian billionaires have given away as much as $435 million to 200 institutions in the United States over 20 years. Russian billionaire Roman Abramovich — best known as the owner of the Chelsea Football Club in London and who was recently sanctioned by Britain — received an award from the Federation of Jewish Communities of Russia in 2018 for giving half a billion dollars to Jewish causes around the world.
“It’s philanthropy for reputation laundering,” says Jodi Vittori, a Georgetown University professor and expert on corruption. She says that oligarchs are seeking the same benefits from philanthropy as other wealthy people looking to enhance their social standing. “Doing big, splashy charity work for any sort of organization — universities, medical research, documentaries, or anything like that — makes them look particularly good in the public eye,” she says. “It also gives them some social capital.”
Such philanthropy can also help Russian billionaires develop relationships and powerful allies in countries like the United States or Britain, where many of them have moved a lot of their assets and spend a fair amount of time.
“If the political winds change and questions start swirling about the provenance of their money, they can point to good things that they’ve done with the money to help the societies that they’re living in,” says David Szakonyi, an assistant professor of political science at George Washington University and co-founder of the Anti-Corruption Data Collective, which published a report on oligarch philanthropy.
It’s philanthropy for reputation laundering.
Much is unknown about their giving, since in many cases it cannot be independently uncovered or confirmed, Szakonyi says. These men, like most philanthropists, give to causes they care about, he says, as well as those that help them build social capital, including major cultural institutions, Jewish causes, and universities.
Even with the best intentions, organizations can face challenges vetting donors like these who give through opaque overseas foundations, says Audrey Kintzi, executive director of the master’s program in philanthropy and development at Saint Mary’s University of Minnesota and a member of the ethics committee of the Association of Fundraising Professionals. And given the oligarchs’ long-standing interest in U.S. nonprofits, it is important for organizations to better understand who these people are and why they give, experts say.
Resistance to Due Diligence
Many of the oligarchs on government sanctions lists and other Russian billionaires who have not been sanctioned are Jewish and have made significant contributions to Jewish causes in Eastern Europe, Russia, Israel, and the United States. Two days after the start of the war in Ukraine, Yad Vashem, the Israeli Holocaust museum, announced a multimillion-dollar donation from Abramovich to pay for a building and a book inscribed with the names of millions of Holocaust victims. This was two weeks after the museum sent a letter to the U.S. ambassador to Israel arguing that sanctioning Abramovich would cause harm to the Jewish organizations that rely on him for funding, according to multiple media reports. After Abramovich was sanctioned on March 10, the museum suspended the partnership.
Two oligarchs who are being sanctioned by the European Union and one who is not co-founded Genesis Philanthropy Group, a major donor to Jewish causes. The group has helped fund the memorial to murdered Jews at Babyn Yar, which was bombed by the Russian military. German Khan, the co-founder who has not been sanctioned, sits on the Babyn Yar Holocaust Memorial Center’s board along with former U.S. Senator Joe Lieberman. Genesis has also pledged $10 million for humanitarian aid for Ukrainian Jews. It funds the annual $1 million Genesis prize, also known as the Jewish Nobel Prize, and has sponsored educational exhibits at the Holocaust Museum LA and the 92nd Street Y, among other places in the United States. This month Genesis removed the leadership section of its web page, which included photographs and names of its three founders.
The CEO of Genesis did not respond to a request for an interview.
Many of these philanthropists are following a similar path as wealthy American Jews, says Lila Corwin Berman, a history professor at Temple University and author of The American Jewish Philanthropic Complex: The History of a Multibillion-Dollar Institution. As they gained greater acceptance in America, they gave not only to Jewish causes but to a broader range of issues.
While it’s clear that these men want to help fellow Jews, their giving also presents a way of promoting the changes in Russia — a place that Jews were fleeing only a few decades ago, Berman says. Now they are the ones supporting Jewish causes around the world. “It is valuable for Putin to have these guys giving in these ways and being able to point to that,” she says. They become prominent examples of Jews who are thriving in Russia and bankrolling Jewish causes around the world.
This is not the first time Jewish charities — like many others — have had to contend with problematic donors. The Bernie Madoff Ponzi scheme was a wakeup call for Jewish organizations about the importance of knowing who is giving them money, Berman says. Jewish organizations, foundations, and individual investors lost billions of dollars. The financial scandal spurred what Berman says is a low level of basic due diligence about donors. Other controversial donors like Jeffrey Epstein have revived those conversations — but only to a certain extent.
“There’s a lot of resistance to asking questions about where the money came from and what it means to take the money. That’s sort of a survival strategy,” she says. “Often the sense is that money is made in all sorts of ways, and we can’t control how it was made or how it came to us. But once it comes to us, we can control the things it does.” She says that attitude is not limited to Jewish philanthropy, and that approach can lead an organization being tied to problematic donors, particularly if it gives them an award or names something after them.
There’s a lot of resistance to asking questions about where the money came from and what it means to take the money.
The Chronicle contacted many leaders of Jewish nonprofit organizations — some that received funds from oligarchs and some that did not — as well as some in Jewish philanthropy, and they either did not respond or declined to be interviewed.
Long Shelf Life
Most nonprofits assume that their donors have good intentions, and the organizations want to ensure they won’t run into problems with a donor later on, says Kintzi. But when it comes to funding from oligarchs and others like them, that can be much harder. Foundations outside the United States, for example, are not required to disclose their investments, grantees, or in some cases even their endowments. It can also be hard to get accurate information about individuals.
Most nonprofits have policies that say they won’t take funds from someone who has been found guilty of a crime. “You cannot work with criminals; it’s that simple,” Kintzi says.
But other cases can be more complex. She says organizations should examine their own values and use them as a guide to help them determine whether a donor is a good fit.
Many large charities have staff fundraisers who are experts on the ins and outs of digging into the backgrounds of potential large donors. They are represented by Apra, formerly known as the Association of Professional Researchers for Advancement, which has about 2,000 members. Prospect researchers consider how donors made their money, check court documents, and look at previous contributions to other organizations to help nonprofits make informed decisions about potential donors.
“No gift, no matter the size, is worth risking an organization’s reputation,” says Robin Rone, Apra’s executive director.
Sometimes even small gifts have a long shelf life. In 2003, Alfa Bank sponsored an exhibit at the Guggenheim. The bank has been sanctioned by the United States, and until this month, it was run by Petr Aven, who is sanctioned by the European Union. Alfa Bank has continued to mention that one sponsorship as a way to bolster its cultural credibility. The bank is a supporter of a Moscow art show, and on its website, Alfa Bank’s Guggenheim exhibit from nearly two decades ago is mentioned along with other cultural causes it has supported.
The Guggenheim did not respond to a request for an interview.
Nonprofits and even donors are increasingly aware that circumstances change over time and an organization’s or donor’s reputation can become tarnished in unexpected ways, Kintzi says. To protect both parties, groups and donors can consider limiting the length of time either party can publicize the association and agree to revisit that part of the agreement, if both parties want to.
To protect both parties, nonprofits and donors can consider limiting the length of time either party can publicize the association.
Several institutions have recently made headlines over their past association with oligarchs.
Vladimir Potanin, who made his money in banking and natural resources and has not been sanctioned, has been a longtime supporter of the Guggenheim Museum and a board member. He stepped down from the board on March 2. Aven, a co-founder of Genesis, resigned as a trustee at the Royal Academy of Arts in London. The Museum of Modern Art told the Chronicle it had received a one-time grant for a panel discussion and publication from Renova Group, which is run by Viktor Vekselberg who was sanctioned by the United States in 2018. Once the company was sanctioned, the museum removed the group from its list of potential sponsors, the spokeswoman said. The Chronicle reached out to several other major cultural institutions that received funding from oligarchs, but none responded.
In 2019, 55 policy experts sent a letter to the Council on Foreign Relations asking the group to turn down a $12 million gift from Ukrainian-born billionaire Len Blavatnik, whose Access Industries own Warner Music Group and who has not been sanctioned. The letter alleges that he has close ties to Putin and business ties to sanctioned oligarchs and that the Russian government overpaid him billions of dollars for the sale of an oil company. It alleges that the donation was just another way he was laundering his image.
“They were warned by anticorruption specialists that this is a highly problematic donation,” says Vittori, who signed the letter.
The funds were used for an internship program. A spokeswoman for the council says that Blavatnik has not been accused of having any role in supporting the invasion of Ukraine. She says that donations undergo a rigorous review process to ensure that the gift does not pose a risk to the group’s reputation or integrity and that this gift met those criteria.
According to a statement from Access Industries, Blavatnik has no involvement in Russian politics and has been an American citizen for 40 years. The statement also says that less than 1 percent of the company’s investments are Russian-related and the company complies with all U.S., U.K. and E.U. laws and regulations.
Openness Over Erasure
When donors engage in questionable — or even illegal behavior — transparency on the part of the charity is important. Rather than trying to erase the relationship by just removing a name from a building, for example, Kintzi says an organization would be better served to acknowledge its mistake.
The Massachusetts Institute of Technology took a different approach. In 2010, it worked with the Skolkovo Foundation, which was run by Vekselberg, the oligarch whose company made a grant to the Museum of Modern Art, to create a new university outside of Moscow. MIT received $300 million for collaborating on the project, called Skoltech. In an opinion article written by an assistant special agent, the FBI singled out the Skolkovo Foundation as plagued by corruption and warned against collaborating with it.
MIT named Vekselberg to its board of trustees in 2013. He was also a member of the William Barton Rogers Society, a donor group at the university. After he was put on the sanctions list in 2018, he was removed from the board. But today there is no indication on the website of the MIT Corporation, the university’s governing body, which lists current and many former trustees, that he was ever associated with MIT.
“It is a compounding of mistakes to cover it up and erase names,” Kintzi says.
It is a compounding of mistakes to cover it up and erase names.
A spokeswoman for MIT said that the university suspended Vekselberg from the board when he was added to the sanctions list in 2018. She said that the university’s outside counsel advised it to remove his name from the corporation website for at least as long as he is being sanctioned. He has not donated to MIT since 2017. On February 25, a day after Russia invaded Ukraine, the university terminated its MIT Skoltech Program. In 2019, the university announced an enhanced process for collaboration efforts in several countries — including Russia — that includes examining risks to national security, intellectual property, and compliance with federal laws among other criteria.
It’s impossible to know what a donor may do in the future or exactly how that person will be viewed. (In this case, though, some experts point out that the oligarchs’ ties to Putin have been known for decades and that the Kremlin has been involved in a string of controversial actions like jailing opponents, journalists, and political leaders and invading Crimea.) Having clear policies and being transparent can help groups not only avoid these kinds of scandals but also handle them better when they do happen, Szakonyi says.
“That’s as much as anyone can ask for,” he says.
Of course, donor scandals are not going away. “We’re just talking about Russia right now because they invaded a country,” Szakonyi says. But wealthy Russians aren’t the only international magnates donating to American charities. “You could ask these same questions about five or 10 other countries in the world.”
