Endowments in the History of Philanthropy in Russia in the 19th and Early 20th Century: Legislation, Classification, Financial Mechanisms

This article focuses on the issue of the history of legislation and the practice of use of endowments in Russia that remains relatively unexplored.The essay chronologically covered a long period from 1770s to 1914, characterized by the huge development of all philanthropic institutions.The article is based on various archival and published sources, primarily on the materials, including annual reports of many charity organizations such as hospitals, almshouses, orphanages, schools, as well as analytical reviews published by the Ministry of Finance, Ministry of Interior, Ministry of Public Education, Department of the Institutions of Empress Maria, the Imperial Philanthropic Society and others.Particular attention is given to the securities market and to the use of stocks and bonds in financial support of charitable activities.The analysis of the data led to the conclusions that, starting from the pre-reform period (before 1861), the use of securities (for example, Safe Treasury tickets) as a reliable source of storage of endowments with a stable income was widely practiced by charitable institutions.After the Great Reforms, during the period between 1861 and 1914, the Russian stock market grew rapidly, with both government-issued loan securities and bonds of railway companies, and sometimes shares of banks and industrial corporations.Donors preferred securities that provided an income of at least 5 %.However, if these were not available on the stock market, less profitable securities (3 % and 4 % income) were also used.Charitable institutions, as a rule, kept their securities in State Bank branches and in provincial and county treasuries.In only about 10 % of cases could the endowments be kept in bank deposits, but the interest received was lower.Regular reporting by philanthropic institutions at all levels was open to the public, and the financial data published annually contained information about the securities used.Such a financial mechanism for using inviolable funds, the interest of which only shall be expended for the support of charitable institutions of various types, beds in hospitals and almshouses, scholarships, and the provision of benefits to the poor, was optimal, which was confirmed by the successful practices of the Russian philanthropic sector.