Most Charitable Russian Abramovich Leads Billionaires
Roman Abramovich, Russia’s eighth-richest person, is the country’s most charitable billionaire.
The 46-year-old owner of London’s Chelsea Football Club donated about $310 million of his $12.7 billion fortune to philanthropic causes from 2010 through 2012, more than any of Russia’s 15 richest citizens, according to data compiled by Bloomberg. About a third of Abramovich’s gifts went to social works projects in the Chukotka region near Alaska, where he was once governor.
Alisher Usmanov, Russia’s wealthiest man, gave $247 million to charity in the period, a Bloomberg survey of the country’s richest people shows. He controls a $19.4 billion fortune, according to the Bloomberg Billionaires Index.
“It’s just in the last few years that ultra-rich individuals in Russia have started to pay attention to what they can do to make this world a better place,” said Edward Mermelstein, a New York attorney who helped billionaire Viktor Vekselberg repatriate czarist-era bells from Harvard University at a cost of $10 million. “In the past, charitable giving was done more for vanity, but today we see some serious philanthropists.”
Of the 15 billionaires surveyed, 10 provided data on their philanthropic donations. Those who responded have a cumulative net worth of $127 billion, and gave a total of $1.3 billion from 2010 through 2012, about 1 percent of their combined fortunes.
That compares with the $6 billion spent in 2010 and 2011 by the Bill & Melinda Gates Foundation, which is funded by Gates, his wife and Warren Buffett. Gates and Buffett, the two richest people in the U.S., have a combined net worth of $124.8 billion, according to the Bloomberg ranking.
Abramovich amassed vast wealth acquiring some of Russia’s biggest enterprises at bargain-basement prices during Boris Yeltsin’s presidency after the collapse of communism. Since 1999, he has given or invested more than $2.5 billion to build schools, hospitals and infrastructure in Chukotka, averaging about $179 million a year, according to the survey.
President Vladimir Putin said during his campaign for a third term last year that he was considering a one-time tax on entrepreneurs who acquired state assets at “unfair” prices in the 1990s. The bulk of Abramovich’s wealth is derived from the sale of OAO Sibneft, the oil company he bought a controlling interest in for $100 million in 1996 and sold to state-run gas company OAO Gazprom (OGZD) for $13 billion a decade later.
Since buying Chelsea in 2003 for 142 million pounds ($217 million), Abramovich has spent more than $1 billion helping the club win three Premier League titles. Last year, it became the first London team to clinch Europe’s Champions League.
Abramovich has residences in London, in Cap D’Antibes on the French Riviera, on the Caribbean island of Saint-Barthelemy and in Aspen, Colorado. His 533-foot (162-meter) yacht, Eclipse, the second-longest in the world, was moored in New York for almost two months prior to the birth there of his seventh child on April 8, his second with partner Dasha Zhukova.
Eclipse, one of the three boats owned by Abramovich, was until recently the world’s largest privately owned yacht, and is equipped with two helipads, a mini-submarine and two swimming pools. The billionaire also owns a Boeing Co. 767.
Putin, in 2010, said Abramovich should “dip into his pocket” to help finance stadium construction for soccer’s 2018 World Cup, now projected to cost $20 billion. Russian billionaires are often called upon to help finance projects the Kremlin deems of national importance, such as preparations for the Winter Olympics and the World Cup.
Under Putin, Russia’s billionaires have also taken responsibility for maintaining a social safety net and spurring economic development in single-industry towns where their companies operate, a legacy of the Soviet system. Evraz Plc (EVR), the steelmaker partly owned by Abramovich, spent $164 million on social projects from 2010 through 2012, an amount that isn’t reflected in Abramovich’s total giving.
Usmanov, 59, through his OAO Metalloinvest Holding Co. (METIN), the country’s largest iron-ore producer, spent $260 million in the same period, subsidizing local services and social programs in regions where the company works. That’s in addition to the $247 million of his personal wealth that he gave to charitable causes, including gifts to universities and museums.
Vekselberg, who in March sold a 12.5 percent stake in BP Plc (BP/)’s Russian oil venture for about $7 billion, gave away $160 million, making him the country’s third most-charitable billionaire. Apart from repatriating cultural treasures such as the Danilov Monastery bells and Faberge eggs, the 56-year-old, along with Abramovich, helped fund a Jewish museum and tolerance center in Moscow.
Vladimir Potanin, the largest shareholder and chief executive officer of OAO GMK Norilsk Nickel (MNOD), the world’s biggest producer of the metal, was the fourth-largest giver among Russian billionaires. The 52-year-old donated $110 million, mainly to educational and cultural institutions.
Potanin in February became the first Russian to join Gates and Buffett’s Giving Pledge initiative, committing to give away at least half of his wealth to charitable organizations and philanthropic causes. He said then that he made the decision in part to protect his children from “the burden of the extreme wealth.”
The government needs to alter its approach to big businesses to spur philanthropy, said Maria Chertok, country head of U.K-based Charities Aid Foundation, which helps non-governmental organizations find sponsors. Russia, in 2011, made individual charitable contributions tax-deductible and plans a similar measure for companies.
“It’s about politics and attitude to wealth,” Chertok said in an interview in Moscow. “Businesses have to pay for certain projects. This is all quite different from the U.S. environment and it casts a shadow on the charitable sector.”
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