Giving money away is always a risky business. People think, well nothing more secure than writing a check to the United Way. Then what happens? Lets face it. Some of our most mainstream "charities" are every bit as bureaucratic and corrupt as the old Soviet Union or the new HMOs. So let's put this in its proper context.
The thing about Russia though, especially once you get outside of Moscow, you feel like you're back in the Wild West. There is a definite lack of decorum when it comes to financial matters.
So a standard wire transfer might not be the wisest course to take?
(laughter)
Not if you value your money.
You mean the bank rips it off?
Somebody rips it off. The government can be a big problem. You have to go through an huge amount of paper work, then they start taxing the money destined for salaries. To the order of 50 some percent!
So what do you do?
The groups I work with in Russia, even though they all have bank accounts, asked me to look for alternative and intermediary sources. I use U.S.-based NGOs with programs in Russia. We make the grant to them and ask them to support their colleagues in Russia using their regular procedures . Which of course means any way allowed by the law.
Of course. There are other ways of getting money into the country I suppose.
Well, there is always the underwear method. We've done that on occasion, all perfectly legal, you know, small amounts, a few hundred here or there, maybe as much as a thousand or two. Works for petty cash or when they have to buy something like a fax machine.
Some donors and U.S.-based NGOs I know have experimented with doing things like VISA withdrawals at banks. In the Russia's far east, for example, there are several banks that give cash advances to a VISA cardholder.
The downside to that is you get the official or the bank's exchange rate. You could probably do better on the street.
Yes, but the upside is you don't have to go around the country lugging wads of $100 bills in your underwear.
What about using ATMs? You set up an account in the U.S., send the card abroad. Do they have ATMs in Russia?
I've heard stories about such things, but I don't have any personal knowledge of it. I suppose you could do that. Same as the VISA. Why not?
Who should donors consult with if they want to get small amounts of philanthropic funds to projects in Russia?
I think donors should contact one of the big foundations working in Russia who face this problem on a daily basis. Actually, I heard that the reason the Russians were so heavy into taxing philanthropic capital was because a lot of it is pouring into the country.
So the Russians are into the old Willie Sutton trip -- rob the bank because that's where the money is.
The Russian kleptocracy is inventing new ways every day. It's either the banks, the government, the mob or the new capitalists. And no one can tell the difference.
Which is why the Communists have been making a comeback.
Which is why it is a very dangerous time for Russia, and will continue to be in the near future.
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