Big business groups say that they will continue increasing the number of social programs and charities to which they donate
Ukraine’s largest business groups have been taking corporate philanthropy to new heights, donating tens of millions of dollars over the last several years to charitable causes and launching social programs in the country’s woefully under-funded healthcare, education and cultural spheres.
While the money that Ukrainian industrial giants have been donating to causes may be a drop in the ocean compared with the billions they reap in revenues every year, public relations gurus say that big business groups will be pouring even more cash into charities and social programs in the coming years, as doing so helps polish their sometimes sullied images as corporate sharks preying on Ukrainian society.
“Companies are demonstrating that they are not only making money off of society, but also give a part of it away,” said Lilia Zahrebelna, customs relations manager with Kyiv-based public relations agency Romyr & Associates.
Big business groups, for their part, say that they will continue increasing the number of social programs and charities to which they donate.
Donetsk-based System Capital Management (SCM), a leviathan industrial holding owned by Ukraine’s wealthiest tycoon, Rinat Akhmetov, has donated around $5 million to charitable causes through its Development of Ukraine Foundation since establishing it in July 2005, according to the foundation’s director Anatoliy Zabolotniy.
“SCM has always been involved in charity, but it was decided to systematize these activities in 2005,” Zabolotniy said.
Among the social programs that the foundation has created are Nation’s Health, Contemporary Education, and Cultural Property, Zabolotniy said. The foundation plans to donate around $10 million to these and its other programs in 2007, doubling the amount donated by the foundation since its creation in 2005, he added.
According to Zabolotniy, the Development of Ukraine Foundation will begin focusing more attention on the public healthcare sector, compared to other areas, starting this year.
He said the foundation plans to donate around $3 million to treat tuberculosis in Donetsk Region over the next four years.
In addition, the foundation is to donate a total of $12.8 million toward the construction of the Children’s Hospital of the Future, which will be located in Feofania, a suburb of Kyiv.
According to the website of the Children’s Hospital of the Future Charitable Fund, which in January of this year signed an agreement with the Development of Ukraine Foundation for the $12.8 million donation, the hospital will be built between 2007 and 2009.
The Children’s Hospital of the Future Charitable Fund was launched at the initiative of Ukraine 3000, an international charity fund headed by the wife of President Viktor Yushchenko, Kateryna.
Another Ukrainian tycoon, Viktor Pinchuk, the son-in-law of former President Leonid Kuchma, and the founder of Interpipe Group, a major industrial holding based in Dnipropetrovsk, says he has been developing philanthropic projects in Ukraine for the last 10 years.
But it was only last year that Pinchuk organized his charitable activities under one roof with the creation of the Viktor Pinchuk Foundation.
Since its creation, the foundation has launched five of its eight current projects in the areas of public health, education and culture.
Under the aegis of the foundation, the last six months have seen Pinchuk open the Pinchuk Art Centre in Kyiv, host the premiere of “Spell Your Name,” a documentary about the Holocaust in Ukraine co-produced with Steven Spielberg, and launch ZAVTRA.UA, a scholarship program for senior university students in Ukraine.
Nikita Poturaev, an advisor to the foundation, said the amount of money donated by the foundation starting in 2006 was significantly more than Pinchuk had donated compared with 2005, but he declined to name a specific amount or how much would be spent in 2007.
He did say, however, that the foundation spent around $1 million on “Spell Your Name” alone.
“You can’t even compare [contributions to social projects in 2006] with 2005. There’s a big difference,” Poturaev said.
“Perhaps that’s because in 2005 projects were only in the process of development, while in 2006 they were actually launched,” he added.
Poturaev said that the Viktor Pinchuk Foundation’s priority was education, with the main idea being the development of Ukraine’s future generation.
“Viktor has an idea of facilitating the coming of age of Ukraine’s new generation … Therefore, the main idea is educational, and everything is connected with education in one way or another,” he said.
The Industrial Union of Donbass (ISD), one of Ukraine’s largest industrial holdings, boasted financial contributions to eight charitable causes last year.
ISD is controlled by two Ukrainians: National Security and Defense Council Chief Vitaliy Hayduk and Serhiy Taruta, who serves as the group’s chairman.
One project funded by ISD is the creation of the Mystetskiy Arsenal (Art Arsenal) museum complex at the Soviet-era military plant Arsenal in Kyiv’s prestigious Pechersk district. Another is the erecting of a monument commemorating the Battle of Kruty, in which several hundred Ukrainian schoolboys were killed defending Kyiv from advancing Bolsheviks in 1918.
Both projects spurred by President Yushchenko. ISD’s press service also declined to put a monetary figure on the holding’s charity activities.
“The budgets for such projects have increased threefold” compared with 2005, said Romyr’s Zahrebelna.
The launch of social projects by corporations has only begun to take off in Ukraine, she added.
According to Zahrebelna, 50 percent of all projects that Romyr & Associates helped arrange for its clients last year were philanthropic in character.
Yaroslav Vedmid, the director of MTI Consulting, a Kyiv-based PR firm that works with the Viktor Pinchuk Foundation, puts the estimate for corporate charitable funding much higher.
“It is difficult to say regarding the whole segment, but it [financing] has grown 10-fold” compared with 2005, he said.
Vedmid said that corporate sponsors of charitable projects have been focusing more attention on helping children in terms of their education and health, as well as increasing the overall birthrate in the country.With respect to corporations donating more toward historical and architectural memorials, Vedmid said that much of the donating is done under the influence of the Ukrainian president.
