Entrepreneurial NPOs in Russia: Rationalizing the Mission
Voluntas
https://doi.org/10.1007/s11266-018-0016-9
ORIGINAL PAPER
Entrepreneurial NPOs in Russia: Rationalizing the Mission
Zhanna Kravchenko1
•
Anastasiya Moskvina2
The Author(s) 2018
Abstract Nonprofit organizations in Russia are introducing for-profit activities as a means of gaining autonomy
from external donors, and as instruments of strategic
planning and sustainable development. This study focuses
on organizations that work with welfare provision and
explores how they reconcile entrepreneurial activities with
their social mission. More specifically, we interrogate how
two institutional logics, business and nonprofit, are defined
and reconciled in organizational identities, structures and
hierarchies. Socially oriented nonprofits define their mission through service to beneficiaries, through personal and
professional dedication to beneficiaries’ well-being, and
through making an impact on public policies and the
society at large. They mimic a business approach in
strategic planning and meticulous reporting, but subordinate profit-seeking to social mission by integrating entrepreneurial activities into already existing organizational
structures, or by separating them into independent entities.
Keywords Social entreprenuership Institutional logic
Nonprofit welfare provision Russia
& Zhanna Kravchenko
Anastasiya Moskvina
1
Södertörn Universty, Aldred Nobles Allé 7, 14189 Huddinge,
Sweden
2
NGO Development Center, Ligovskiy prospekt 87,
191040 St Petersburg, Russia
Introduction
Since the collapse of the Soviet Union, one of the key
characteristics of nonprofit organizations (NPOs) in Russia
has been their dependence on external resources (Jakobson
and Sanovich 2010). The emergence of NPOs in the early
stages of the liberalization was associated with international donors (Henderson 2002). Gradually, close cooperation with state representatives on national, regional and
local levels, as well as fundraising from private donations
or business corporations, was also established (Javeline and
Lindemann-Komarova 2010; Krasnopolskaya 2012). As a
result, nonprofits often find themselves in a precarious
situation: they are under the ideological control and economic scrutiny of donor agencies, face competition for
often limited funding, and become detached from their
social base. This trend is one of the factors contributing to
undermining direct democratic participation and true
autonomy of civil society vis-à-vis the state and the market
(Henderson 2002).
As a result, Russian NPOs are increasingly engaging in
profit generation as a means to accumulate resources and
strengthen organizational autonomy from external donors.
All nonprofits have a legal right to engage in for-profit
activities as long as those activities do not contradict
statutory goals, and the revenues are used to achieve those
goals. Such activities may include provision of fee-based
services or commercial goods to broader public, either
within the scope of statutory activities or independent from
services and goods provided to target groups on nonprofit
123
Voluntas
basis. Participation in public contracting1 and procurement
programs2 is another increasingly important mechanism for
profit generation, especially for the so-called socially oriented NPOs, SONPOs,3 a special category of nonprofits
legally recognized in 2010. These organizations have traditionally engaged in social provision and advocacy
(Henderson 2011), but previously never had to do it under
market conditions.
Market pressures promote the adoption of ‘‘businesslike’’ approaches in nonprofit sector (Maier et al. 2016)
that are in contrast with the norms and practices traditionally associated with SONPOs. Today, SONPOs across
the country are offered various forms of capacity-building
activities, including off- and online courses, consulting
services, and conferences that attempt to bring them into
the realm of business practices. Alongside small and
medium-size social businesses, they are targeted by state
centers for social sphere innovations which, since 2012,
have spent 1.5 billion RUB on entrepreneurial social
initiatives
(Nikolaeva
2017).
Because
social
entrepreneurship still lacks a clear legal definition (Moskovskaya et al. 2017; Moskovskaya and Soboleva 2016),
nonprofits often need to identify with or distinguish
themselves from the practice of social entrepreneurship
(Chuprova 2014), and bear the associated costs and risks.
In this article, we attempt to answer following questions:
How do Russian SONPOs balance market demands with
statutory goals when introducing for-profit activities?
What tensions emerge between their nonprofit mission
and for-profit activities? What kind of organizational
responses do these tensions encourage?
To answer these questions, we examine organizations
that established various types of commercial practices in
St Petersburg, Russia, and conceptualize strains that
these organizations experience. This enables us to
demonstrate how SONPOs interrogate their environment
and identities. Before doing so, we first give an overview
of the development of patterns of resource accumulation
for SONPOs in Russia in order to set the research in
context. We then explore institutional theory and
resource dependence theory to offer a converged account
of complex organizational responses to external constraints. The findings demonstrate that tensions between
values and practices associated with the nonprofit
1
Federal Law No. 442-FZ ‘‘On the basics of social services for
citizens of the Russian Federation,’’ 28 December 2013.
2
Federal Law No. 44-FZ ‘‘On contracting system of the federal and
municipal procurement of goods, works and services’’, 5 April 2013.
3
Federal Law No. 40-FZ ‘‘On amendments to specific legal acts of
the Russian Federation on support for socially oriented noncommercial organizations,’’ 5 April 2010.
123
institutional logic and consequences of for-profit
engagement can be reconciled by rearranging old or
creating new structures and processes through blending
and compartmentalization that reflect the primacy of
nonprofit goals (social impact) over profit goals (revenues). We conclude by discussing what implications our
findings have for understanding the development of civil
society in Russia in general.
Transformation of Institutional Arrangements
and Resource Accumulation in Russian Civil
Society
The transformation of normative foundation and resources
for civil society over the recent decades is the starting
point for our discussion about the importance of SONPOs’ for-profit activities in Russia today. In the context of
a nationalized economy during the Soviet period, nonprofit associations provided welfare by channeling state
resources into services and benefits (Tarasenko 2015). For
instance, trade unions provided housing and childcare and
arranged holiday trips and health rehabilitation treatments.
Liberalization reforms of the 1990s removed job guarantees, cut provis (...truncated)
