Endowment Funds in Russia: Current Status and Prospects for Regulation

Abstract

This article examines the current status of Russian non-profit organizations (NPOs) that hold endowed capital, including endowment funds, from the viewpoint of accounting and regulation. The study employed an algorithm for identifying endowment funds and NPOs holding endowments based on public financial reporting. This method selected for NPOs according to their OKOPF and OKVED codes (standardized categories of corporate legal status and operational scope) along with certain balance sheet line items (1320, 1260, 1550), ranked them by amount of capital, and analyzed how they align with international endowment regulations in the US, UK, Germany, and France. Data from 2018 to 2022 turned up 209 endowment funds and over a thousand NPOs holding endowments, of which over 70% manage their capital via trusts. The vast majority of endowment funds initially have over three million rubles, an amount which makes state subsidies to "top up" capital to the required minimum questionable. A review of studies on endowments held by NPOs shows that transparency and donations are positively correlated; funds that disclose the most information attract approximately 40% more donations. Comparing foreign and Russian approaches confirms that conservative investment strategies, mandatory single-company management, and minimum capital requirements limit the sector’s growth and receipts of income. The authors therefore propose abolishing the fixed threshold for endowment capital, expanding investment instruments, and enhancing transparency regarding capital and income by adding supplementary lines to standardized NPO reporting. This paper also establishes a methodological foundation for subsequent quantitative assessments of endowment fund performance and regulatory improvements.