Keeping 90% for oneself and giving the rest to those in need? What's wrong with charity in Kazakhstan?

Scandals involving charitable foundations and organizations caught misappropriating and misusing funds are appearing in Kazakhstani media with alarming frequency. In the spring, the financial monitoring agency published data indicating that scammers, under the pretext of raising funds for "treatment" and "assistance to the underprivileged," defrauded 660,000 citizens of Kazakhstan. 

The money was spent on purchasing property, daily expenses, bets in bookmakers, and renting expensive apartments abroad. 

In May, an incident occurred involving charitable organizations from the "Zhibek Zholy" association. A total of 26 institutions working with children were shut down. A number of accusations were brought against the organizers, including violations of children's rights and religious extremism. 

In the fall, it became known that the Ministry of Culture and Information was developing amendments related to charity, which propose a ban on collecting money for personal accounts. This proposal outraged civic activists. 

Against the backdrop of these amendments, a scandal erupted involving the Biz Birgemiz Qazaqstan 2030 fund, led by Perizat Kairat. It was revealed that the head of the fund did not always carry out charitable projects with the collected money and sometimes used it to fund her own luxurious pleasures. Among the founders were notable figures from the ruling party. 

Economist Marat Abdurahmanov noted that in our country, there are only charitable funds with fewer than 20 co-founders. For instance, Biz Birgemiz Qazaqstan 2030 had 16, while in other funds, there are sometimes only two or three co-founders. 

“In Kazakhstan, there are no funds operating on a horizontal principle, where there could be up to two thousand co-founders. Although the Kazakh tradition of 'asar,' for example, involves participation from 100 to 1000 people. Why the state does not want to promote these traditions is personally unclear to me. Conditions need to be created for the formation of such horizontally managed funds. This requires political reforms so that people can both earn and raise money to help those in need,”  the economist believes.

It's often heard that the global tradition of laundering illegally obtained income through charity exists. However, according to Marat Abdurahmanov, in Kazakhstan, large sums cannot be "cleaned" this way. 

“In our country, the tax credit for charity is a mere fraction. The old Tax Code had a provision that expenses for charity, amounting to up to 2% of taxable income, are exempt from taxation. This percentage has not increased in the new Tax Code,”  noted Marat Abdurahmanov.

But while laundering income is not feasible, Kazakh oligarchs have achieved great success in using charity to whitewash their image. As the expert emphasized, “the 'owners of factories, newspapers, and steamships' are very active in image-based charitable projects, presenting themselves to the public as worthy individuals who help those in need.

When asked how it happened that charitable activities in Kazakhstan turned into schemes for fraud and personal gain, Marat Abdurahmanov provided a simple and honest answer:

“This became possible due to negative selection of personnel in public service, which automatically attracted related structures, including charitable funds. They also experience negative selection. For example, if the inventor of virtual databases from Pavlodar had remained in Kazakhstan instead of working for Google in Texas, he could have become the Minister of Digitalization, and we might have seen different results. But such gifted and boldly thinking individuals from Kazakhstan somehow benefit other countries; we lack a mechanism for these people to manage processes here. This is what negative selection of personnel is.”

According to him, changes for the better should be expected when key decisions in Kazakhstan are made not by officials behind closed doors, but by our entire society, which requires political and legal literacy and a wide range of tools. 

Revealed the True Face

Scandals involving charitable funds are just part of a larger shadow layer that needs to be uncovered, while not devaluing the titanic effort, believes the chief economist of the TALAP Applied Research Center, Rahim Oshakbaev.

“These people have created a business model associated with charity. They, as we see from their Instagram accounts, live well and profit from this. The Kazakh people, all ethnic groups living in Kazakhstan, we all help each other and take pride in this; it is our common tradition. But those who have professionalized this and profit from charity deal a powerful reputational blow to this entire institution. People will now doubt whether to help or not. On the other hand, all these scandals are a good thing; I hope they continue to happen, revealing schemes of profit, as this should signal the need for increased transparency in charitable activities,”  noted Rahim Oshakbaev.

At the same time, according to the economist, organizations that assist people in difficult situations should be treated with due respect, without devaluing their work. It is essential not to undermine the noble impulse when people donate money and items, and when entrepreneurs strive to be socially responsible. Excessive government regulation of the charity sector can be detrimental.

“The desire of officials to regulate everything is quite natural and understandable. But I am confident that this will only create additional obstacles that unscrupulous players will learn to circumvent. First of all, when we talk about transfers to personal accounts, we have repeatedly encountered the need for prompt response. When people find themselves in a difficult situation, they publish their account details, and money is instantly transferred to them,”  explained Rahim Oshakbaev.

He cited the example of serviceman Erbay Mukhatar, who suffered severe injuries in a military unit, and within a few days, Kazakhstani citizens raised funds for his rehabilitation abroad. 

While people mobilize and come to the aid of those in need, unfortunately, "gray" schemes are also growing, and new individuals are emerging who attempt to profit from the misfortune of others. Newly formed funds create a beautiful picture of tragedy, presenting themselves as saviors, as a chance for everyone to do a great noble deed. But later, they provide no accountability for the funds collected, do not disclose whether even part of the aid reached the victims, and often simply disappear. 

“In ideal conditions, there should be complete transparent reporting, not just in PDF format, but using modern technologies related to transparency. Perhaps experienced charitable organizations will create some resource and service that informs about their transparency, intentions, and reputation. This sector of civic activity is very large in our country, encompassing a significant portion of the adult population of Kazakhstan, and it is precisely through this that we can judge the current state of our social capital, the level of trust, and the moral climate in society. These examples give me reason for cautious optimism that people here are empathetic and responsive,”  believes Rahim Oshakbaev.

The economist's viewpoint was supported by Mazhilis deputy Azat Peruashyev. He pointed out that charity in Kazakhstan is indeed a powerful force uniting people in their desire to help those who have experienced tragedy and support them in difficult times. 

“Charitable organizations receive funds from numerous citizens who want to help in treating sick children or restoring homes affected by disasters. Such initiatives must be transparent so that everyone can see that their assistance reaches the intended recipients and is directed toward the stated goals. When there are abuses and misappropriations of funds, law enforcement agencies should do their job. The activities of philanthropists should be monitored not so much by the state as by society through transparency and public accountability,”  Azat Peruashyev noted.

Neck Under the Yoke, Shoulders Under the Whip

The Orda.kz correspondent contacted the founders of well-known charitable funds to inquire how billions in donations are spent and how the organizers of aid collections view the threat of total government regulation. 

The founder of the "Daulet" fund, a former well-known blogger and now a Mazhilis deputy, Daulet Mukayev, spoke about the daily operations of his organization. According to him, since 2020, the fund has received over 1.6 billion tenge. The amount of assistance provided during this time exceeds 1.4 billion tenge.

“Since the fund's opening, I have said that I am actually not the founder; I merely established and opened this fund. I do not receive any salary here; on the contrary, I donate my own money and ask