What campaign of B92 Fund you would single out as the one for which the companies in Serbia were most interested in?
“Battle for the Babies” is certainly the most attractive. The results were excellent, and I believe that its effect was also significant: death rate reduction, better conditions for the babies that are most vulnerable, as well as for their parents… We see nowadays that population policy is among top issues with both politicians and the citizens. However, it is clear that we lack a long-term strategy. Convincing. Powerful. Determined, without expecting results in the first mandate.“
What drives companies to give funds for CSR campaigns? Public attention? Altruism? Commitment? Generally, CSR is one of the segments of sustainable business within companies, apart from protecting environment and taking care of the employees, so this could be perceived differently.
However, if we review last 15 years, for example, it is noticeable that humanitarian work of the companies had gone through diverse stages.
Veran Matic, Chairman of B92 Fund Board of Directors and Chairman of the CSR Council of Serbian Chamber of Commerce, confirms this fact, stating that prior to big world economic crisis, business climate was much more positive, but with the crisis and economic decrease, advertising and PR costs were cut short first, along with CSR activities, being often part of this sector.
“We had experienced the next boom in 2011, through our campaign Battle for the Babies, in which we managed to gather funds for purchasing necessary incubators for prematurely born babies in all maternity wards for just three month time, primarily thanks to the enthusiasm of donors, mostly companies, we followed up with Battle for Maternity Wards”, Matic stated, adding that for the last couple of years we mark kind of aloofness again, decrease of the activities or redirection of those budgets into other kind of activities.
What do you regard as the biggest problem when it comes to this kind of donations?
Big problem stands in the fact that there is no way to see official data on donations for the common good. In majority of states, those data can be transparently seen pertaining to the amount of funds donated, issues for which those funds are meant, list of recipient, etc., and it is all available through the records of tax administration that get those data through tax relief applications. In Serbia, under the Law on Corporate Income Tax, tax reliefs are approved in a way that tax reliefs are granted after giving for the purpose envisaged by law are registered as expense in the amount of maximum 5% from the total income. As given amounts are perceived as expense, while legal entities submit to the Tax Administration a profit and loss statement, not tax statement, judging by the forms currently available at Tax Administration, it is impossible to get data on donations of legal entities for this purpose.
Philanthropists
“Moreover, this convenience that exists for the companies, i.e. ’Recognition of expenditures in the amount of 5 percent of total income for enterprises’, does not exist for individual donors philanthropists, which represents incomprehensible discrimination and contributes largely to the fact that we don’t have a developed, noticeable activity of the benefactors, as in the golden times in our history, that were marked by benefactors such as Kolarac, Spasic and others“, Matic concluded.
What are the consequences?
All of this leads to a negative outcome. According to the data by Trag and Catalyst foundations that follow current philanthropic developments with their methodology, in 2016, we experience stagnation in donations for common good, as well as less attention that is devoted to this issue. In the same year, we had recorded decrease in donations on the part of business sector, and significant decrease when it comes to the individual giving. The fact that there is no possibility of being exempted of value added tax on donations represents new disincentive space. Mechanism that would guarantee prevention of any abuse can be easily established. However, under current circumstances, we had managed to construct seven Safe houses for the victims of domestic violence, while we could have constructed two more, if we were exempted of paying VAT as if we were construction contractors, selling those houses on the market, while we actually donate them to the state social system.
Does this interfere with other segments of humanitarian work?
Yes. We have disincentive framework for volunteering. Giving our time is one of the more significant benchmark of developing philanthropy in one country, while current legal framework makes it more difficult and discourages citizens to contribute to general causes with their time and expertise. Employees within the companies could give great contribution through volunteering, but this is impossible, for the time being. This is one of the reasons due to which on the list of World Giving Index, created by Charities Aid Foundation, Serbia occupies poor position (in 2016, Serbia was ranked 135 out of 150 countries). It turns out that we are among less humane nations, and this is not so.
To what extent companies make use of this relief?
Insufficiently, as there are no special regulations, by-laws, or separate opinions of the Ministry of Finance as to how to apply mechanism from the Article 15 of the Law on Implementation. Researc of Trag foundation and Catalyst foundation from 2016, presents that almost 40 percent of tested legal entities (22.2 % of companies, and 16.7 MSP) does not use this mechanism. Those tested state the following as the main reasons for poor use of this legal mechanism: misunderstanding of how to apply existing tax deductions; lack of clear and precise interpretation of the competent authorities on which costs are recognized and included in tax deductions, as well as inadequate support and unclear and uneven interpretation of legal provisions by tax authorities.
Does that awareness of the companies when it comes to humanitarian work change?
I believe that companies are much more aware, but are still rather confused, especially whether CSR is part of marketing or a separate field that has several dimensions: relationship towards its own employees and relationship towards community, without conditioning regarding income increase or similar, compared to giving.
It is positive that companies start to focus on their own campaigns. It is negative that very often management makes decisions that they believe would be supported and desirable on the part of ruling establishment, both on the local and national level.
“CSR trends“
Do the companies in Serbia make good choices when they select the fields to invest in or for which specific situation they want to donate?
We can’t talk about general trends. But it is general impression that much more focus is being put on the imposed issues, on extinguishing fire, on resolving problems that needs to be basic commitment of state institutions, larger focus on ad hoc needs, less towards developmental and systemic needs. In the first place, focus is on health, then assistance to marginal groups (social policy), focus on reducing poverty, and focus on education. More than 70 percent of donated funds are being directed towards state institutions. And this is exactly one of the reasons to make more stimulating framework for giving in general, for the benefactors, and responsible companies.
You are heading one of the most recognizable humanitarian organizations in Serbia. How it looks like working on the market of Serbia from your perspective? Do you face with certain problems in your work?
There are lots of problems, starting with existential, everyday issues, to the systemic ones, which I had already mentioned. Still, the most difficult thing is that the climate created through legal and political framework is such that one-time benefits are more present than systematic benefits. Solidarity is shown more when it comes to resolving some ad hoc situation (i.e. for individual medical treatment or assistance to some jeopardized family), while it is rarely shown when it comes to the projects that systematically influence the improvement of the overall situations (devices for treatment or education, launch of startups of economic initiatives that contribute to employment).
To what extent companies in Serbia have their own ideas or plan of CSR activities?
We have international corporations that mainly on the global level had resolved planning of CSR activities, with certain specific corrections given the traits of the country they operate in. It goes the same for our country. This is all about very clearly defined standards. We also have international companies that are not into standards, and their attitude towards employees is rather problematic, and when it comes to giving for the community, they are more oriented towards creating positions within powerful centers for which they presume could help them preserve status quo. Among local companies, we also have champions, creative, bighearted, yet very responsible.
In any case, it is very important that on the national level we bring much more serious and more thorough strategies when it comes to CSR and philanthropy, as I am convinced that what is being donated today presents only smaller part of the overall potentials, if this field is being regulated in such a way that it includes incentives, recognitions and the status of the companies and individuals as in the U.S. Of course, this cannot be done overnight and immediately, but U.S. top health institutions, educational institutions, research centers live from donations and have provided financing for several years in advance, in many cases, for the next several decades. This is incredibly favorable position for the development of the society. In the same time, we can be very evil when someone manipulates with us, we can be generous when we see that it is something that is being respected, that presents desirable model of behavior. This is an uninitiated space to be true mainly towards ourselves, and then towards others, contributing in such a way to the progress of the society on the whole, to the best of our potentials.
To what extent the media can be of help with this regard?
On one hand, it happens that in some companies CSR is being part of Marketing and PR sector, and then counter-effect is being made in which media say that it is necessary to pay for the promotion of those activities, as they are part of the promotion, not solely socially responsible activities. So, this is such a huge space, important for the prosperity in this field, almost closed when it comes to media.
For the last couple of years, we mark certain kind of aloofness, reduction of activities or redirection of budget from CSR to some other activities.
It is very important to reach far more serious and more thorough strategy when it comes to CSR and philanthropy.
The fact that there is no way to be presented with the exact official data on the giving for common good represents a huge problem.
It often happens that companies integrate CSR into Marketing and PR department, and then we have the following counter-effect: the media request payment for the promotion of such activities.
And what about B92 Fund?
There is a saying: “No good will pass, without being properly punished”. We were very often the target of discrediting, media tabloid lies, and generally speaking, NGO sector is being completely demonized, so we can ask ourselves how is it possible that such organizations that help refugees still exist, along with those which assist socially endangered, helpless, people with disabilities, etc.
This challenge in a way presents a kind of test of being authentically devoted to the goals that we want to accomplish. And as we can see, those most smeared achieved the best results.
Other similar organizations?
What is important to say is that we have good NGOs and foundations that we gathered within the CSR Council of the Serbian Chamber of Commerce. This team had launched some joint campaigns, in order to change what can be changed, to be partner to the Government and to make a breakthrough. Why we couldn’t make a leap in the field of charity from 132nd position to the 30th, as was the case with the ranking on Doing Business list? It is completely clear that the state would benefit a lot from this, as currently the biggest part of donated amount goes actually to state institutions, and when they are given to some NGOs, for example, as in the case of NURDOR association, this is donation for treating children suffering from cancer. Other similar organizations are: Trag foundation, Serbian Chamber of Commerce, Ana and Vlade Divac Foundation, Forum for Responsible Business, Serbian Philanthropic Forum, Catalyst Foundation, Smart kolektiv, B92 Fund, that launch concrete initiatives, offering serious partnership to all those willing to participate in the development of such significant field. For the common cause.
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