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. Last Updated: 07/27/2016

Saying No to Corporate Gifts

Courtesy Of Caf Russia
Irina Kibina used to associate the New Year's holiday with the smell of mandarins, but now the holiday brings less fruit and more calendars, pens, and other corporate gifts.

"We all love giving gifts, but our company just started to hate the gift-giving industry that developed around the holiday," said Kibina, vice president of corporate affairs and investor relations at Evraz Group.

Gor Nakhapetyan, executive director of Troika Dialog, echoed Kibina's frustration: "I once sent a nice pen as a gift to one of my partners. My business card was tucked inside the box. A couple of years later, I got this same pen as a holiday gift, and my card was still inside the box."

This year, Evraz and Troika Dialog are two of nine companies collaborating with Charities Aid Foundation Russia in an initiative called Charity Instead of Souvenirs. The companies are forgoing giving corporate gifts and putting their holiday gift budgets toward charity donations.

PricewaterhouseCoopers, Renova Company Group, Troika Dialog, Comcon, Sequoia Credit Consolidation, Evraz, Interfax, and Independent Media Sanoma Magazines -- the parent company of The Moscow Times -- are all participating in the initiative. This year, instead of the usual corporate gifts, partners of these companies can expect a charity donation to be made in their name.

The initiative started in 2005 when PricewaterhouseCoopers decided to spend its $100,000 holiday gift budget on a New Year's party for 400 children from 11 different orphanages in the Moscow region. Lyudmila Mamet, deputy general director and partner of PricewaterhouseCoopers, said that in 2005 the desire for this initiative was palpable.


COURTESY OF PRICEWATERHOUSECOOPERS
Pop stars amid orphans at a New Year's party held by PricewaterhouseCoopers using the funds from its holiday gift budget.
"This idea of Charity Instead of Souvenirs was just hanging in the air," Mamet said. "Everyone in the company came to it all at once. I remember my birthday that year when an American colleague of mine said she wanted to donate the money for my birthday gift to a charity of my choice. At first I thought this was strange but then I realized it's a great idea."

Substituting gifts with charity donations is common practice for many Western companies. The Russian companies participating in "Charity Instead of Souvenirs" see this initiative as a step toward better corporate culture in Russia.

"The culture of corporate charity is well developed in the West, but in Russia, the psychology has been different," said Yelena Koneva, general director of market research firm Comcon. "Many of our Western partners refuse holiday gifts. Five years ago this was seen as an impediment to communication, but now we are beginning to understand this practice."

Koneva estimates the total gift budget of businesses operating in Moscow to be roughly $350 million. The results are based on extrapolations from a limited survey conducted by Comcon in 2006. Koneva plans to conduct a more comprehensive survey this year; she believes that a more accurate estimate will be closer to $400 million or $450 million.

"There is a tremendous amount of money in holiday gift budgets, and we propose that this money be spent purposefully," said Maria Chertok, director of Charities Aid Foundation Russia, or CAF. "People think that these donations will not be enough for sustainable aid, but this isn't true. It costs 2,500 rubles [$100] a month to pay for regular doctor visits and food delivery to an elderly person. An expensive bottle of alcohol could pay for a year of this service."

Inna Valkova, director of the charitable organization Linia Zhizni, said companies should not consider any sum of money too small to donate. Linia Zhizni is an organization that funds heart surgery for children.

"Even relatively small donations can make a huge difference. First of all, because operations range in price, and second, because when several contributions are combined we can afford the more expensive operations," Valkova said.

Some of the companies participating in Charity Instead of Souvenirs have long-standing relationships with the organizations they support. CAF, however, is glad to help companies select a charity. Organizations for ailing children, orphans, and the elderly are the primary beneficiaries of corporate donations made through CAF.

The companies taking part in the initiative are driven by a desire to give to the truly needy, but they are also relieved to avoid the logistical nightmare of distributing corporate gifts.

"We had a huge team work on buying the gifts and addressing them to the right people," said Nakhapetyan. "For months before and after there were boxes of gifts lining every hallway, and of course some of them would get stolen. No one ever remembered who sent which gift."

Koneva said that while top executives are ready to support the initiative, it is often difficult to convince client managers to give up the tradition of gift giving.

"What makes this initiative hard to implement is that everyone in the company needs to be on board. Managers often feel that giving clients gifts is necessary to stay competitive," Koneva said. For companies that don't want to go without gifts altogether, CFA suggests the option of buying "alternative gifts" such as crafts made by charity organizations.

Not all companies, however, are in favor of replacing the tradition of holiday souvenirs; some prefer to keep funds for charity donations separate from their holiday gifts budget.

Yekaterina Kryukova, public relations representative for Michelin Russia and CIS, said there was no need for the Charity Instead of Souvenirs initiative at Michelin because the company already allocated funds toward annual charity donations.


COURTESY OF CAF RUSSIA
One of the beneficiaries of corporate donations via CAF.
Svetlana Sergeyenkova, of RP-Com restaurant management company, echoed this statement.

"We have entirely different budgets for charity and holiday gifts," Sergeyenkova said. "We feel that holiday souvenirs have an entirely different concept: it's mutual gift giving, we give to you and you give to us, whereas charity is just done because we want to."

Sergeyenkova said that while it was possible that the company would consider such options in the future, this year it planned to distribute corporate gifts.

Oleg Alexeyev, director of corporate projects for Renova, dismissed the criticism that the initiative was less about charity and more about public relations. He sees this initiative as an opportunity for Russian business to illustrate the social benefits of private enterprise.

"I don't see what's wrong with bringing attention to business getting involved in charity," Alexeyev said. "Russian business is only 15 years old and not everyone in this country is convinced that private business has been a positive thing for Russia. I think it's extremely important for business to declare itself as a positive force in society and the Charity Instead of Souvenirs initiative is a great way to do this."

Businesses wishing to participate in the initiative should contact CAF Russia, 24/2 Tverskaya Ul., bldg. 1, entry 3, floor 5, 792-5929, www2.cafonline.org/cafrussia.