Among private donors, this is attributable primarily to a smaller average donation from mass philanthropists, while among commercial organizations it reflects cuts in spending on certain areas. One NGO employee who was interviewed said the commercial sector is increasingly cutting support for foundations due to lower budgets for charity giving and marketing. “We heard this throughout almost the entire second half of 2024 and the beginning of 2025, and I believe this trend will continue,” she said.
At the same time, many nonprofits are facing rising costs. According to Rosstat, prices for goods and services for nonprofits increased 16% over the last year, while the nominal payroll at surveyed NGOs rose almost a quarter. One anonymous NGO representative described the situation: “to stay where you are, you have to run, but to move from where you are, you have to run like hell.”
Opportunities to receive support from abroad are shrinking owing to internal and external factors. Above all, this reflects a tightening of the “foreign agent” legislation, along with wider enforcement of it. The report cites sentiment in the nonprofit space: “[the designation of the foundation Help Needed as a ‘foreign agent’ in 2024] has hit everyone... For us, the question is: ‘who’s next?’”
Out of fear of the consequences in the opposite case, many charities are cutting ties with external and domestic partners (the latter when they are added to the Justice Ministry’s “foreign agent” list). Meanwhile, the study does not provide data on the impact of the growing list of “undesirable organizations.” According to OVD-Info, more than 200 organizations have been labeled as such since 2022. “Undesirable” organizations – which are fully banned in Russia – include NGOs and foundations involved in environmental protection and assistance to vulnerable groups.
Sanctions imposed after the full-scale invasion of Ukraine have also dealt a major blow to the nonprofit space. Russia was cut off from global financial systems, while according to the report, 70% of NGO charities in Russia are now in need of imported equipment and medicines – collateral damage from the war. Under parallel import schemes, waiting times can reach six months.
Frank RG and SberPrivate Banking note the Russian government’s active efforts to get around these restrictions, as well as measures “to increase transparency, simplify processes and support the activities of nonprofits.” The report highlights support measures for socially focused organizations, as well as the role of the Circle of Kindness Foundation, established in 2021 by presidential decree to support children with serious illnesses.
In an environment of increasing domestic economic instability and diminishing foreign support, NGOs and charity foundations are becoming more reliant on large donors and the state and are seeking to reduce costs by engaging volunteers and digitalizing. While AI can help cut costs in operations, fundraising and analytics, its use is circumscribed by ethical considerations and Russia’s ban on the transfer of personal data.
Another way nonprofits are stabilizing their financial situation is by establishing endowments. A large majority (71%) of Russian organizations that do that are in the education, science and culture fields. The Potanin Foundation plays a major role in this area. For smaller foundations, however, establishing an endowment is hard, as it requires having large donors or receiving a grant.
Thus, despite expanding public engagement in charity and philanthropy, the space is entering a hard period and finds itself increasingly dependent on wealthy individuals and the state. Large donations (above RUB 300,000) already account for about a third of total receipts by NGOs in the benchmark sample. With the exit of foreign companies and donors and with costs rising due to inflation, sanctions and import restrictions, NGOs are forced constantly to come up with new ways to raise money and keep going.