Elite Giving in Ukraine: State Relations and Legitimacy

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Elite Giving in Ukraine: State Relations and Legitimacy

Hanna Sцderbaum

Since the late 1990's, wealthy businessmen-politicians in Ukraine have been initiating private philanthropy foundations. This article explores the purposes these giving organizations serve. The empirical basis of the study consists of forty-six original interviews, of which most were with the donors, directors, and project managers of ten selected foundations. Additional interviews with experts and other businessmen-donors and giving organizations provide important viewpoints as well as details on the institutional framework within which the giving organizations exist. The article shows how the institutionalization of elite giving in Ukraine can be interpreted as a mix of compensating for state failure in order to benefit society, a legitimization strategy of the wealthy elite, and an instrument for state actors to influence business.

Keywords: elite giving, foundations, economic and political elites, transition, legitimacy

Ганна Седербаум

Благочинність економічної еліти в Україні: державні відносини та леґітимність

charitable economic elite

За допомогою аналізу десяти благодійних організацій, які заснували або очолювали політично активні члени української багатої еліти, ця стаття шукає відповіді на два широкі запитання: у який спосіб можна інтерпретувати інституціоналізацію благодійности як стратегію легітимації, а також якою є проголошена функція цих благодійних фондів у державі? Стаття розкриває інституціоналізацію благодійних пожертв з боку українських еліт як комбінацію трьох чинників: компенсація прогалин держави в підтримці суспільства, стратегія леґітимації олігархів та інструмент державних акторів для впливу на бізнес.

Ключові слова: благочинність, благодійні організації, економічні й політичні еліти, стратегії легітимації, інтерв'ю

Introduction

Private philanthropy foundations have been initiated by wealthy businessmen-politicians in Ukraine since the late 1990s. The transition from the Soviet economy entailed radical changes in the ownership of business operations, as well as the provision of welfare services. Ukraine experienced a rise of extremely wealthy businessmen in a system of intertwined relations between business and politics. The author is thankful for constructive feedback from Orsi Husz, Li Bennich-Bjorkman, Mychai- lo Wynnyckyj, colleagues at the Economic History Department at Uppsala University, the editors and anonymous reviewers. The generous support of the Swedish Institute and Olle Engkvist Byg- gmastare Foundation is gratefully acknowledged. See Eva Bellin, “Contingent Democrats: Industrialists, Labor, and Democratization in Late-De-veloping Countries,” World Politics 52, no. 2 (2000): 175-205, Rosaria Puglisi, “The rise of the Ukrainian oligarchs,” Democratization 10, no. 3 (2003): 99-123, and Inna Melnykovska, “Big Business and Politics in Ukraine: The Evolution of State-Business Relations,” Emecon: Employ-ment and Economy in Central and Eastern Europe 1 (2015), http://www.emecon.eu/fileadmin/ articles/ 1_2015/1%202015%20MelnykovskaN.pdf. The rise of one extremely wealthy business-woman (Yulia Tymoshenko) is perhaps an exception that proves the rule here that the use of the term “businessmen” is not a disparaging instance of sexism. The extant Soviet political elite in the country stayed rather intact, due to the persistence of network politics or patronal politics. Henry Hale, Patronal Politics (New York: Cambridge University Press, 2015). Consequently, the legacy of the Soviet Union maintained a strong hold over the bureaucracy in newly independent Ukraine. Meanwhile, large segments of the public perceived the redistribution of property that took place from the state to certain individuals as illegitimate; this, in turn, increased the likelihood of nationalization and reprivatization. See Sergei Guriev, and Andrei Rachinsky. “The Role of Oligarchs in Russian Capitalism”, Jour-nal of Economic Perspectives 19, no. 1 (2005): 131-150.; Olga Kesarchuk, “The Attitudes and Adaptation Strategies of Oligarchs to Ukraine's Democratization” (Conference paper) Canadi-an Political Science Association Vancouver, BC. June 4-6, 2008, 15; Slawomir Matuszak, “The oligarchic democracy: The influence of business groups on Ukrainian politics,” Osrodek studio wschodnich (Centre for Eastern studies) no. 42 (September 2012), Warsaw. Accessed January 31, 2018. Retrieved from https://www.osw.waw.pl/sites/default/files/prace_42_en.pdf, Chrystia Freeland, Sale of the Century: Russia's Wild Ride from Communism to Capitalism (New York: Crown Business, 2000). It seems reasonable to understand these giving initiatives as possible attempts to legitimize the wealthy elite's extraordinary position in society, whether as individuals or as a group.

Philanthropy is beneficial for both donors and recipients, Thomas Adam, Philanthropy, Patronage, and Civil Society: Experiences from Germany, Great Brit-ain, and North America (Bloomington: Indiana University Press, 2004). and philanthropic power has never been entirely disconnected from political control, even when the philanthropist has officially abstained from political power. Thomas Adam, Buying Respectability: Philanthropy and Urban Society in Transnational Perspec-tive, 1840s to 1930s (Bloomington: Indiana University Press, 2009), 95. However, theories on the motives behind elite giving are only rarely investigated in an empirically way; For valuable contributions to theories on motives, see, for example: Nicola Guilhot, “Reform-ing the world: George Soros, Global capitalism and the philanthropic management of the social sciences,” Critical Sociology 33 (2007): 447-464, Marcel Mauss, The gift: forms and functions of exchange in archaic societies (London: Routledge & Kegan Paul, 1970), James Andreoni, “Im-pure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving,” The Economic Journal 100, no. 401 (June 1990): 464-477, Jerome B. Schneewind, ed., Giving: Western Ideas of Philanthropy (Bloomington: Indiana University Press, 1996), Francie Ostrower, Why the wealthy give: The culture of elite philanthropy (Princeton: Princeton University Press, 1995), Teresa Oden-dahl, Charity begins at home: Generosity and self-interest among the philanthropic elite (New York: Basic Books, 1990), Carol M. Sanchez, “Motives for Corporate Philanthropy in El Salvador: Altruism and Political Legitimacy,” Journal of Business Ethics 27, no. 4 (2000): 363-366), Bri-an Duncan, “A theory of impact philanthropy,” Journal of Public Economics 88, no. 9-10 (Au-gust 2004): 2159-2180, Alfred H. Y. Lin, “Warlord, Social Welfare and Philanthropy: The case of Gouangzhou under Chen Jitang. 1929-1936,” Modern China. 30, no. 2 (2004): 156, Thomas Adam, Buying Respectability: Philanthropy and Urban Society in Transnational Perspective, 1840s to 1930s (Bloomington: Indiana University Press, 2009), 95, Filip Wijkstrom, and Stefan Einars- son, Foundations in Sweden - Their scope, roles and visions (Stockholm School of Economics, The Economic Research Institute, 2004), 24-26). On the role in society, critics raise concerns that benevolence must give a voice and not just money to those who are silenced (Patricia Moon- ey-Nickel, and Angela Eikenberry, “A critique of the discourse of marketized philanthropy” American behavioural Scientist 52, no. 7 (2009): 986). moreover, most existing studies are conducted in the context of stable democracies. While it is impossible to disentangle any one-dimensional motives in order to explain philanthropy, it is interesting to investigate the nature of specific philanthropic initiatives; this especially concerns foundations that are set up by the political and economic elite in a transforming society. In stable democracies, elites are constrained by institutions; on the other hand, in societies undergoing reform and transformation, where institutions are in flux, elites consequently have broader degrees of choice and action. John Higley, Gyorgy Lengyel eds., Elites after state socialism: Theories and analysis (Lanham, MD: Rowman & Littlefield Publishers, Inc., 2000), 1-2. This gives them more room to use giving organizations for political motives.

This paper explores the specific purpose of legitimization behind elite giving. The strategy of legitimization is here understood as image creation through content and exposure. Content is the giving itself as a social responsibility; and exposure makes the socially responsible behaviour visible in public.

The objective is not only to increase our understanding of these initiatives in relation to the founders/donors, but also in relation the state. Since the collapse of the Soviet Union, the provision of social welfare in Ukraine has suffered severely from enormous gaps in the state budget. What is the role of these foundations in relation to the state? Are they compensating for the state's failure or, rather, maintaining its failure? Do they want to compete with the state and ultimately replace it because it is malfunctioned or because of individual power ambitions? Do they aim to change, compensate, or perhaps compete with the state? To change the state would mean to create platforms that nourish democratic thinking and “open the minds” of the Ukrainian public. Education, empowerment of human rights, and contemporary art could fit into this agenda. However, the organizations behind such initiatives should be independent. Compensation also includes activities that support and complement the welfare state. Competing implies a distrust of the authorities and attempts to create alternative models for welfare programs.

By studying ten important cases of elite giving organizations in one empirical framework and scrutinizing their giving behaviour, we can enhance our understanding of the public and private roles of these private giving organizations. The main source material used is interviews with representatives of giving organizations that were founded or headed at some point in time by politically active figures among Ukraine's wealthy elite. The majority of the interviews were conducted between 2011 and 2013.

Analytical tool

The analyzed data include the character and public exposure of the gifts, as well as the structure of the organizations and the attitudes of foundation representatives and donors/founders toward the state. Four main aspects - welfare, empowerment, visibility, and structure, with sub-categories - will map the organizations and direct us through the material (see Figure 1 on p. 166).

Character of Gifts: Welfare and Empowerment

We will start with the character of the gift, something that is disentangled into welfare provision and empowerment. First, providing welfare is about targeting immediate needs rather than long-term visions of change. Social welfare entails a sort of de facto empowerment, however, there is a difference between having the ambition to empower citizens on a structural level and bring about change and providing welfare for other reasons. If an initiative seeks to meet immediate needs exclusively, systemic failures are not targeted and thus it is not necessarily a force for change.Examples of welfare provision can be covering surgery costs, organizing summer camps for children, or giving financial support to the elderly or underprivileged families. This phenomenon can be interpreted as a legacy of the Soviet enterprise, which is observed not only as an economic institution but also as the primary unit of Soviet society and the ultimate base of social and political power. Gudeman Stephen Gudeman, Economy's tension: The dialectics of market and economy (New York and Ox-

ford: Berghahn Books, 2008). advances a theory in which commercial and social values are inseparable and institutions exist in a grey zone of “mutuality.” This mutuality can be interpreted as clientelism - a system of asymmetrical interdependency between an authoritative, wealthy patron with high social status and an underprivileged client in a dependency situation, who is willing to become loyal to a patron if the patron somehow supports him. Social welfare, or charity, is not necessarily clientelism but it can be. Welfare provision is here understood as both a reply to instant social requests (“social assistance”) or ad-hoc help to people in need - which is often characterized by selective, non-transparent processes - and support to social policy infrastructure, for example, health-care reform programs. For the state, this is most often a form of compensating. As recipients become dependent on a donor, the strategy can also be interpreted as competing with the state, especially when it is combined with visibility.

Second, giving with empowering motives is understood as support for culture and education, human rights advocacy, grassroots civil society, and projects aimed at democratization. Empowerment is the ... capacity of individuals, groups, and/or communities to take control of their circumstances, exercise power and achieve their own goals, and the process by which, individually and collectively, they are able to help themselves and others to maximize the quality of their lives. Robert Adams, Empowerment, Participation and Social Work (Basingstoke, Hampshire: Palgrave Macmillan. Fourth Edition, 2008). Juan J. Linz, and Alfred Stepan, Problems of Democratic Consolidation (Baltimore: John Hopkins University Press, 1996), 9.

Linz and Stepan contend that “at all stages of the democratization process... a lively and independent civil society is invaluable”.¹¹ Empowering projects can change the state, modernize and democratize it. In her study of “art girls” in Russia, Milam Jennifer Milam, “Art Girls”: Philanthropy, Corporate Sponsorship, and Private Art Museums in Post-Communist Russia. Curator: The Museum Journal, 56, no. 4 (2013): 395. discusses the contemporary art scene upheld by oligarchs' money, but with a sincere interest by the women leading the art foundations to have a positive effect on society by changing attitudes toward postmodern art (through normalizing the experience, for example). Aiming at system change reflects whether the foundation's representative emphasized any wish for this; within this indicator I distinguish between social change through the existing system, implying a belief in the current political system, and change through future generations, which may indicate mistrust toward the current political system. Support to grassroots movements implies that support to groups of people (informally or formally organized) with a shared interest is also essential in order to be perceived as an “alternative” foundation (see below), although not to the same extent as aiming for social change. Finally, support of culture and/or education can be implemented as support to art museums, scholarships for higher education within Ukraine or abroad, or even renovation of playgrounds and school sports facilities. Of these, foundation support to art museums carries high visibility; thus, such projects can additionally be categorized as a legitimization strategy.

Public Exposure of Gifts: Visibility

Next, let us examine how we can analyze the motivational aspect of exposure or visibility. In the eighteenth and nineteenth centuries, philanthropy in the United States and Germany was never anonymous; on the contrary, donors were clearly identified and exposed. In the case of art museums, for example, admiration for the objects also entailed admiration for their donors, and subsequently, such philanthropy was part of a larger goal of legitimizing and enforcing the hegemony of the elites. Thomas Adam, Buying Respectability: Philanthropy and Urban Society in Transnational Perspec-tive, 1840s to 1930s (Bloomington: Indiana University Press, 2009), 95, 99. Today, the extreme manifestation of such motives is through very visible grandiose hyperprojects, like building a concert hall or a stadium, or an ornate fountain or a zoo. Legitimization attempts are always connected with an intended audience; therefore, the geographical focus, whether regional, national or international, reveals something about the intended audience, and we should also pay attention to the social class of the audience. Finally, whether the name of the founder is ascribed to the foundation's name is also an indicator of visibility. This strategy is associated with social legitimization. While the expressed intention may ostensibly be to change the state, hyperprojects are more likely to compete with the state.

Structure of Giving Organizations: Supporting the Status Quo or Alternatives

Finally, examining the structure of giving organizations will help us analyse their role in relation to the state. Philanthropy foundations are sometimes classified as conservative, liberal, or alternative.¹⁴ Liberal and conservative organizations are at times lumped together, as they “frequently revolve around the best way to achieve an agreed-upon goal with the least disturbance to the status quo”.¹⁵ There are only a few “alternative” foundations that clearly seek to channel citizens' voices.¹⁶

To my knowledge, relations between government, civil society, and philanthropy in Ukraine have been studied only sparsely, and only with a broader civil society focus.¹⁷ Regarding elite giving in the United States and Israel, respectively, Ostrower¹⁸ and Shimoni¹⁹ found that elite donors expressed dissatisfaction with the government's poor performance in dealing with social welfare problems; additionally, they criticized the excessive bureaucracy and lack of professionalism. In the Ukrainian context, this criticism can also be due to the numerous mechanisms of pressure and influence that state actors have over business. For example, public officials can use tax audits and fines as a means of punishing any business leaders who challenge them.²⁰

Whether a giving organization is based on a single or several funding sources will reveal how flexible it can be, and how independent it is from its donors. A high degree of endowed capital increases the prospects of an organization to function as an alternative and independent force, with foundations under these conditions being less dependent on the donors and on the market. To what extent are Ukrainian giving organizations' activities independent from the state? What characterizes these relations, and what are their attitudes toward government authorities? If an organization shows high control, together with a reluctant attitude toward the Daniel R. Faber, & Debroah McCarthy, Foundations for Social Change: Critical Perspectives on Philanthropy and Popular Movements (Lanham, MD: Rawman & Littlefield Publishers, Inc, 2005). Robert F. Arnove, Philanthropy and cultural imperialism: The foundations at home and abroad (Boston: G K Hall, 1980), 432. Ibid., 433 Kohl-Arenas, Erica. The Self-Help Myth: How philanthropy Fails to Alleviate Poverty. Berkeley: University of California Press, 2016. NGOs and state relations in Ukraine are the research subjects in “Ukraine: The role of private sector in the public service of Ukraine: Social-political governance perspective” (2002) and “Civil Society Organizations in Ukraine: The State and Dynamics (2002-11)” Francie Ostrower, Why the wealthy give: The culture of elite philanthropy (Princeton: Princeton University Press, 1995). Baruch Shimoni, “Mega Donors' Perspectives on Philanthropy and Government Relations in Israel”, Society 54, no. 3 (2017): 263. Lucan A. Way, “Rapacious individualism and political competition in Ukraine, 1992-2004,” Com-munist and Post-Communist Studies 38 (2 SPEC. ISS.), (2005): 197. state, it is possible to see features of anarcho-capitalism and competition with the state: a high degree of operating control and structured programs suggests higher motivation for developing an independent agenda with directions for the foundation to follow, along with a generally clearer vision of its aim and activities.

Material

The empirical base of this study consists of forty-six original qualitative interviews, of which thirty-one are unique. Information retrieved from the organizations' archived and published documents and websites is also explored. The core interviews were conducted with donors, directors, project managers, and associates of the foundations. In order to provide a degree of anonymity, anyone who receives a salary from the foundation was called a representative. The survey respondents were representatives of the foundations, most of them holding high positions and influence over their organization, and in most cases having close contact with the donors behind the foundations. The interviews supplied information on these actors' attitudes and values. Although the interviews also provided data on the foundations' programs and how they are run, the focus was on the representatives' interpretations and attitudes. Thus, quotes should not be taken as emanating from the foundations themselves, as the respondents were not in the role of spokespersons for the organizations or for the donors behind them. (Nevertheless, in cases of more than one interview from the same foundation, similar views were in fact expressed.) Additionally, I conducted interviews with four other private giving organizations, other donor-businessmen with regional influence, experts in the field of Ukrainian giving, and a minor sample of NGO representatives. These provided important interpretations as well as the institutional framework within which the giving organizations exist.

Case Selection

Ukraine does not stand out as a country with a particularly developed philanthropic culture. Many citizens share suspicious attitudes toward philanthropy, similar to those in other post-Soviet states. In the Charities Aid Foundation's 2016 World Giving Index list, Ukraine was ranked 106th in the world. However, the field has developed in the time since Ukraine gained independence in 1991. In 2015, almost ten thousand charity organizations collectively contributed over 9 billion hryvnias (389 million USD) to charitable purposes. Anna Gulevska Chernysh, “Blagotvoritel'nost' v Ukraine: poslevkusiie 2016-ho,” Gazeta Zerkalo Nedeli. January 20, 2017. Accessed January 24, 2018, http://gazeta.zn.ua/SOCIUM/blagotvoritel- nost-v-ukraine-poslevkusie-2016-go-_.html. Comparing this figure with Ukraine's public budget expenditures of 103 billion hryvnias (4 billion USD) the same year, it was almost one-tenth the size of the public expenditures. It should be noted that there were special circumstances in 2015, when the war in Eastern Ukraine generated donations both to the army and to internally displaced people. However, private foundations had also been effective before the outbreak of the war in 2014.

Philanthropic organizations in Ukraine that have a public figure behind them are by far the smallest group - although according to a 2008 estimate they are the most influential. According to a report by the Ukrainian Philanthropists Forum, the impact of private foundations of one individual or family, as opposed to corporate or community foundations, is significant: “Regardless of all existing tax burdens, private foundations ... remain the most stable in their ac-tivities” (Anna Gulevska Chernysh, ed., Philanthropic Institutions of Ukraine: Current Status and Development Prospects, Ukrainian Philanthropists Forum, Kyiv, 2008, 88). They are the small-est in number, yet the richest group of all the charity foundations operating in Ukraine (Anna Gulevska Chernysh, ed., Philanthropic Institutions of Ukraine: Current Status and Development Prospects, Ukrainian Philanthropists Forum, Kyiv, 2008, 80). The share of total net worth spent on private philanthropic foundations in post-Soviet countries is relatively minor if compared to well- known giants like Bill Gates or Warren Buffet. Bill and Melinda Gates donated, via their foundation, 16 billion USD over fifteen years, while Rinat Akhmetov has donated the USD equivalent of around 13-16 million per year since 2007. Nevertheless, the relative influence of private foundations in relation to public finances can be compared. In 2015, Gates was described as the real secretary of education in an op-ed in the New York Times (Linsey McGoey, No such thing as a free gift: The Gates foundation and the price of philanthro-py (London: Verso, 2015), 117), and in the 1990s the Foundation for Promotion of the Arts in Ukraine used the self-identified nickname “Ministry of Culture” (March 19, 2012).

The study focuses on ten private domestic giving organizations that were initiated or headed by actors who, at some point, showed political ambitions. Aside from two, all of these were listed among the twelve largest private giving foundations in Ukraine in one or more of various press publications in 2010-12. “Kontrakty” 988-989, no. 17-18 (25 April 2011), “Correspondent” (16 Dec 2011). Serhiy Ar-buzov's Ukraine's Future Foundation was only launched in 2013, explaining its absence in these lists. Since the study is based on interviews with managers of the foundations, the foundations' willingness to take part in that study and meet me has been one criterion. The Firtash Founda-tion was contacted to no avail, and thus was left out of the analysis. All the others rather easily accessible and willing to meet.

The list of selected giving organizations, including their Ukrainian names, is as follows:

1. Rinat Akhmetov's Foundation for Development of Ukraine / Фонд Ріната Ахметова `Розвиток України'.

2. Victor Pinchuk Foundation / Фонд Віктора Шнчука.

3. Petro Poroshenko Foundation / Фонд Петра Порошенка - Фонд Порошента.

4. International Charitable Fund of Oleksandr Feldman /Міжнародний благодійний фонд `Фонд Олександра Фельдмана'.

5. Borys Kolesnikov Foundation / Фонд Бориса Колеснікова.

6. Klitschko Foundation / Фонд Братів Кличків.

7. Open Ukraine: Arseniy Yatsenyuk Foundation / Фонд Відкрий Україну.

8. International Charitable Fund `Ukraine 3000' / Міжнародний благодійний фонд `Україна 3000'.

9. Ukraine's Future Foundation / Фонд `Майбутнє України'.

10. Foundation for Promotion of the Arts / Фонд содействия развитию искусств.

Five of the ten founders of the organizations under study are among the top fifty wealthiest Ukrainians. These five merit the label “oligarch" to a greater or lesser degree, due to varying magnitudes of rent-seeking behaviour since the late 1990s; this includes buying property at discounted prices, receiving state subsidies, and developing and maintaining a monopoly position in the market, all within a patronalistic system permeated by corruption. The post-Soviet system of endemic corruption is described in Johan Engvall, The State as Invest-ment Market: Kyrgyzstan in Comparative Perspective (Pittsburgh: University of Pittsburgh Press, 2016), Alena V. Ledeneva, Russia's Economy of Favours: Blat, Networking and Informal Exchange (Cambridge: Cambridge Universty Press, 1998), Alena Ledeneva, Can Russia Modernize? Siste- ma, Power Networks and Informal Governance (Cambridge: Cambridge University Press. 2013), Sarah Chayes, Thieves of State - Why Corruption Threatens Global Security (New York: Norton & Company, 2015), and Henry Hale, Patronal Politics (New York: Cambridge University Press, 2015). The political scientist Jeffrey Winters defines oligarchs more generally; to him, they are powerful specifically because of their material wealth, and unlike other elites, oligarchs are unusually resistant to dispersing it. Jeffrey A. Winters, Oligarchy (Cambridge: Cambridge University Press, 2011), 4-5. I argue that differences within oligarchies, between oligarchs, need to be taken into account in order to grasp the phenomenon fully. This study of ten crucial cases is not statistically generalizable; however, analytical generalizations can be made that go beyond their specific setting. Mario L. Small, “How many cases do I need? On science and the logic of case selection in field- based research,” Ethnography, Vol 10, no. 1 (2009): 5-38. Robert K. Yin, Case Study Research and Applications: Design and Methods, Sixth Edition (SAGE Publications, 2018).

While we focus on these ten, a wider sample of giving organizations is included for the general findings: responses are analyzed from representatives and donors of four additional giving organizations, They are the Renaissance Foundation, Bohdan Hawrylyshyn Charitable Foundation, AntiAIDS Foundation, and K. Kondakov Foundation. and from four donor-businessmen based in Lviv, Kyiv, and Kharkiv. They have no political affiliations, neither currently nor previously.

Three Approaches to Giving

The giving strategies of the ten elite giving organizations under study are mapped out in Table 1. These findings suggest that they are associated with the founders' involvement in politics and to the budget size of the foundation. Business magnates who have refrained from official politics and typically distance themselves from the term “oligarch" - although they are seen by many as typical oligarchs due to their funding of political parties, economic wealth, and mass media holdings - tend to have considerable yearly expenditures by their foundations (13-16 million USD as of 2012); we refer to them as post-politician oligarchs (PPO). Business magnates who themselves are appointed or elected office-holders are termed oligarch-politicians (OP), since they actively and officially combine economic and political roles; annually they donate about 1-4 million USD. The third type of foundation, initiated by a politician (P) without significant wealth, has a smaller budget.

The “PPO” giving organizations are Rinat Akhmetov's Foundation for Development of Ukraine (DoU) and the Victor Pinchuk Foundation (VPF). Akhmetov left the Ukrainian parliament in 2012, so technically he was also a politician during the study period. However, he is included in this category since he is the archetypal oligarch and influences politics more unofficially than officially. His image has since 2012 been presented as a post-politician. See Hanna Soderbaum, “The Business-Superman: Oligarchs Justifying Giving in Post-Soviet Ukraine”, Economic History Yearbook (forthcoming). Oligarchs may indeed move in and out of politics Jeffrey A. Winters, Oligarchy (Cambridge: Cambridge University Press, 2011); thus, their grouping may be somewhat arbitrary, but the different giving strategies of the groups identified above are clearly defined. The DoU and VPF describe themselves with values of transparency, international best practices, effectiveness, and professionalism, and appear somewhat similar from an outside perspective. While both foundations run programs aimed at empowerment, they also engage in hyperprojects and social assistance. Their projects are mostly nationwide; the foundations have a high degree of management and control their programs by partnering, when needed, with NGOs, allowing them to implement parts of the programs but giving them limited decision making authority. A counter example is Swedish donor Sigrid Rausing, according to Anna Breman, Forskning om filantropi: Varfor skanker vi bort pengar? (Stockholm: Ekonomiska Forkningsinstitutet (EFI), 2008).

The “OP” group consists of the Borys Kolesnikov Foundation, the Oleksan- dr Feldman Foundation, and the Petro Poroshenko Foundation. Similarly to the two foundations in the first group, their programming includes hyperprojects, but these three are also involved in the delivery of welfare. Their origins were regional, developing nationwide following the path of the founders' political careers but keeping the strongest foothold at the regional level. If the donor's audience is mostly regional or local, and if the donor runs a business in that region or is likewise running for local political positions, he usually engages in targeted aid. This implicitly does not require a fast-moving organization, and patron-client relationships are close.

The “P” category of foundation, on the other hand, fundraises for its smaller budget and provides a variety of support, in some instances aiming at social development. Opposition politicians tend to be weaker financially and base their organizations on fundraising; they target groups at a national level, either fishing for votes or “collecting money,” or hoping to influence change. Giving organizations such as Arseniy Yatsenyuk's Open Ukraine Foundation, former President Yushchenko's wife's `Ukraine 3000', Serhiy Arbuzov's Ukraine's Future Foundation Serhiy Arbuzov initiated a new giving organization in 2015 called “Put' Dobra” (lit. The Good Path) focused on welfare provision projects in Odesa. It is however not under scrutiny in this study., Anatoliy Tol- stoukhov's Promotion of the Arts Fund and the Klitschko [Brothers] Foundation are all characterized by smaller budgets and projects in the fields of culture, international relations, youth, and sports. On its website Yatsenyuk's Open Ukraine (open v.) lists its main tasks as “improving international reputation of Ukraine and increasing its promotion abroad” and “promoting international cooperation with Ukraine and public diplomacy.” Initially, the foundation received large amounts of funding from Victor Pinchuk. When this was severely reduced after the 2008 financial crisis, the foundation struggled (Representative 1, Open Ukraine, October 31, 2011), and this explains why it has turned to international organizations for funding. The latest list of the Open Ukraine Foundation's sponsors includes the NATO Information and Documentation Centre and Germany's Friedrich Ebert Foundation, among others. These “P” organizations are not engaged in hyperprojects, and within this group, most are not actually named after their founder, often including “Ukraine” instead. One exception is the Klitschko Foundation. It was founded in the late 1990s by the world-class boxing brothers Vitali and Wladimir (Volodymyr) Klitschko, and has since been focused on projects aiming at improving the life and lifestyle of young Ukrainians. Vitali Klitschko was not a politician at the time of the study, and was not obliged to prove that this was not an organization aiming to promote him among the electorate. He obviously had political ambitions, though, since he has serves as Mayor of Kyiv since June 2014.

The Gift: Welfare & Empowerment

To compensate for state failure seems an important point of departure for the studied organizations. The prevailing attitude is “What would it look like without us?” An Anti-AIDS foundation representative (March 20, 2012) says, “We support state hospitals with vocational training and equipment... the state is failing... but people need help now” The Klitschko brothers' foundation complements the state in what they call public-charitable partnership (PCP), as they cooperate with local authorities to establish school playgrounds; within all such projects they negotiate with city councils to share the costs (October 23, 2013). The Kondakov Foundation representative contends that the private foundations compensate for the state: “Some things are provided for by the state, some things by rich persons” (November 11, 2013). Open Ukraine expresses the same view: “Business and private sources support contemporary art, while the state supports traditional art” (Representative 1, October 31, 2011).

The Kolesnikov Foundation representative also gives this complementarian view, remarking on the importance of national pride among international audiences (October 16, 2013) along with a reference to hosting the 2012 UEFA European Championship. “It is not only about filling the holes, but also inspiring youth,” the respondent said. An associate of Akhmetov's Development of Ukraine, culture program, opines on the helplessness of the state, believing it “important to cooperate with state institutions - they need support” (October 28, 2011). Anna Gulevska Chernysh, director of the umbrella organization Ukrainian Philanthropists' Forum, emphasizes the ignorance of the state: “The way to get public support is to turn to wealthy individuals. The state just does not provide. [The private giving organizations are] not really complementing, the state ignores.”

How are the studied organizations engaged in welfare provision? The Klitschko Foundation is mainly involved in building children's playgrounds throughout Ukraine. As of spring 2014, they celebrated 140 playgrounds, and 181 playgrounds by spring 2018, in 135 villages and cities. The Klitschko Brothers on the Foundation, http://www.klitschkofoundation.org/en/projects/ sport/call-your-friends-lets-play-together/ They emphasise the need to provide playgrounds for “normal” children - in other words, those without disabilities, since charities tend to focus on those groups:

It is important for us to create a new generation of good Ukrainians, educated Ukrainians, who believe in themselves... To my knowledge, there are a lot of other foundations that work with disabled children, a lot of companies that invest money in orphanages (October 23, 2013).

Helping a new generation of Ukrainians believe in themselves associates with empowerment; however, I interpret it mostly as welfare, since it alludes to apolitical health. The Borys Kolesnikov Foundation responds to requests from persons in need; however, the interviewee claimed, “We have helped up to ten persons this year” (October 16, 2013). This is far less, by comparison, than the figure mentioned (around 2,000) at the Oleksandr Feldman Foundation (November 13, 2013). To work with targeted assistance is usually the equivalent of working in an ad-hoc manner, replying to needs and projects that they like to support: “He [Feldman] always helps out when people ask for money, especially when it concerns children, pensioners, families... we do not refuse anyone.”

Both PPOs have welfare programs: DoU runs programs to fight tuberculosis and cancer, Rinat Akhmetov Foundation, http://fund.fdu.org.ua/. Date accessed: January 31, 2018. and back in 2006 VPF launched the “Cradles of Hope” program, which builds a network of neonatal centres at existing state hospitals throughout Ukraine. Victor Pinchuk Foundation, https://pinchukfund.org/en/projects/10/. Date accessed: January 31, 2018. These welfare programs can be interpreted as compensating the state.

However, the effect of these initiatives is disputed. Open Ukraine adds to this view, but with criticism directed toward the capacity of the private sector: “People are expecting help from the state [but it does not provide], while businesses support only those who are already successful” (Representative 2, October 31, 2011). A previous employee at VPF, Dmytro Ostroushko, believes that VPF contributed to the modernization and improved image of Ukraine abroad (September 21, 2017), while Evhen Bystrytsky, director of the George Soros-funded Renaissance Foundation, is critical toward these initiatives, since long-term solutions are lacking: “The state has no culture politics. The initiatives by Pinchuk and Akhmetov etcetera are good, but they don't solve the problems - the problems are accumulating” (November 11, 2011). The general attitude is that these initiatives function as compensation for state failures, and the wish to support the creation of a functioning state, able to provide social welfare, is rather widespread. The interviewees also express distrust about the capability of the private sector to substitute for the welfare state.

Proclamations of empowering the future generation are made frequently by representatives of the PPO foundations, as well as by Politicians, while the OP foundations do not stress it. “Empowering a new generation” is here interpreted as supporting education, art, and NGOs; these are efforts that could potentially play a crucial role in a future democratization process. This is a means to “change” the state. Through student scholarship, “inspiring lectures,” and a “mind-opening museum of contemporary art,” the VPF strives to “change people's minds” and create space for “future change” through the next generation:

In a country like Ukraine, the most effective approach is to invest in the next generation. If you provide them with great education, with the experience of international best practices, of how life abroad can be, of what international visionary thinkers say about the world of tomorrow, with the vision of contemporary artists which also depicts the world of today and tomorrow with its contradictions and possibilities, then these young people can grow up in a different way, form a new mind-set, form different sorts of skills, and when they get into positions of responsibility they can really change the country. And this is much more effective than trying to lessen the bad things happening now by investing in what's happening at the moment. So, investing in the next generation [is the priority] because then it brings a bigger return on your social investment (representative, Victor Pinchuk Foundation, October 14, 2013).

According to their website, the VPF has funded more than 2,000 monthly stipends across Ukraine over seven years; Zavtra.UA fund students with a monthly stipend of 942 hryvnias at seventy-nine universities of Ukraine. The fund totaled 18,110,000 hryvnias. Victor Pinchuk Foundation. in 2010-12, fifty-five students were accepted to study at the highest ranked universities in the world. International studies are funded up to 60 per cent of the total cost of study fees. In accepting the grant, there is a commitment to return to Ukraine and work for at least five years; the scholarship must be returned if this is not followed (Scholarship Holder, November 21, 2013). The foundation also started translating online education courses of Coursera, the leading online education platform: Victor Pinchuk Foundation, http://pinchukfund.org/en/news/10884/. Date accessed: January 31, 2018. “This is something we may develop because again, it can give a huge impact if all Ukrainian young people have access to the best education of the best institutions in the world” (VPF, October 14, 2013).

The reform agenda differs between the two “PPO” foundations. VPF stresses change through “future generations,” while DoU focuses on reforming the current state. DoU's Representative 2 believes that changing current state agencies is more effective than “change through future generations. We work with the state, it is really hard, not easy, but we have to if we want to deal with these problems.”

The Yatsenyuk's “Open Ukraine” and the Klitschko Foundation are humbler in their framing than DoU and VPF. They never offered big expectations on what they would do for social or political change - even though some of their projects, on a smaller scale than those of the business magnates, were aimed at “changing the state” via structural improvements or social change.

What about any links to grassroots civil society? Based on her work in the United States, the philanthropy researcher Francie Ostrower Francie Ostrower, Why the wealthy give: The culture of elite philanthropy (Princeton: Princeton University Press, 1995), 9. contends that contemporary elite philanthropy is organization-based, with donations going to non-profit institutions rather than directly to recipients. In Ukraine, however, civil society actors searching for funding for their causes do not find support from elite philanthropy. According to the civil society expert Svitlana Kuts (March 7, 2011), trust between NGOs and elite giving organizations is low.

One example that stands out is the initiative of the VPF called the philanthropic marketplace. It is an internet platform where the public can donate to specific NGO projects (the projects appear online after passing a transparency test). In an interview, the representative (October 14, 2013) said, “The idea is that this will help Ukraine make a jump forward and put philanthropic engagement into the DNA of the young generation.” In total, 17 million hryvnias were allocated to different aims (projects in health, education, cul-ture, sports, ecology, animals, etc.) as of June 2014. According to the Philanthropic Marketplace website, the goal is “to create, maintain, and develop an effective collaborative platform for donors, non-governmental organizations, and recipients of aid, thus strengthening the non-profit sector and philanthropy in Ukraine.” While the VPF focuses on developing infrastructure to increase trust in civil society and encourage citizens to give more, they do not themselves directly support NGOs. The DoU is more focused on running their projects, which reinforces the thesis that trust toward NGOs is low. Contrary to VPF, the DoU does not engage in any projects that could facilitate for NGOs.

None of the studied organizations gives grants directly to NGOs, while most give grants to individuals; this means, in fact, that they are not supporting a grassroots civil society. Hence, while some of their projects may create platforms for change, it is not a comprehensive strategy of these organizations.

The Gift: Visibility

Both OPs and PPOs engage in very visible projects. The Poroshenko Foundation and the Feldman Foundation are still attached to their native cities, although they have offices in Kyiv and work at the national level. Both also engage in grand projects aiming at instilling pride as well as attracting visitors to their home cities. One example is the spectacular light and music fountain built in Vinnytsia by the Poroshenko Foundation, which involved a complete reconstruction of the bay of the Pivdennyi Buh River:

It was a charitable gift to the city and had an impact on the number of tourists, with the people in Vinnytsia realizing that we are not worse than European countries... To some degree, the decision was prompted by an ecological problem, as the Old City was inundated during the flooding of the Pivdennyi Buh. The fountain is just amazing. It is 100 metres wide and its highest point is 63 metres, and all this with 20-25 minutes of music, like in Dubai (October 31, 2011).

The respondent implies that Vinnytsia is not a European city, despite its actual geographical location. Often when people in Ukraine say “Evropa," they mean the European Union or some general idea of Western civilization. The Poroshenko Foundation representative is proud that Ukrainians can do no worse - in fact, even better - with this project as an example. These same feelings of pride, and hints of an inferiority complex, are expressed by a DoU associate. While Akhmetov built a stadium in Donetsk, and the Pinchuk Art Center was inaugurated in Kyiv, on discussing the fountain in Vinnytsia the DoU associate claims that these projects were important for the local communities.

We have always felt a bit of an inferiority complex for being smaller than Russia. These kinds of projects bring pride to the city. [The stadium in Donetsk is] fantastic, very impressive and nice. Like a flying saucer. So kudos to them, it is fine that they engage in these big projects. Of course, I believe that their money would be better used if they built a hospital. But I try to see it from my heart's perspective (October 21, 2011).

The respondent expresses an inferiority complex with respect to Russia, reflecting the regional home turf of Rinat Akhmetov, mirrored in the work of the foundation focusing on Donetsk. I interpret this as a form of competing with the state, especially when it is combined with donor dependency and donor PR. In the case of Petro Poroshenko's foundation, the inferiority complex stands in relation to the EU (or “civilized Europe"), not Russia, suggesting that Poroshenko is more Western-oriented. In my interview, when I stated that many people believe this is a PR project, the foundation manager answered that they have nothing to hide: