Ruben Vardanyan: The Russian-Armenian Businessman Focusing on Giving Wealth Away

“We believe philanthropy will move very fast in the next five years, but people have no culture to think about it,” he says. “This will be critical for Russia. Who can they learn from? Your company needs to be run, management can steal from you, the legal system is inefficient and sometimes corrupt. You can lose everything. “My main advice is whatever you have decided, it will take time to explain to your family — five years or more,” he says. “If you don’t start now, it will be dangerous. It’s a long-term process that requires lots of effort and commitment. Do it as soon as you can.”

He and his wife agreed they would give away more than 80 percent of their wealth, simply leaving their children some property and a relatively modest allowance.

Although he holds a Russian passport, his roots are in Armenia on the country’s southern flank and half of his activity is focused there. The genocide in the crumbling Ottoman Empire a century ago remains a heavy historical burden in Armenia, memorialized in a moving museum in the capital city Yerevan. His grandfather was reluctant to talk about his own experiences, but Vardanyan learned that he had been saved by a Turk and four American missionaries, moved westwards and placed in an orphanage school. That inspired him to create the annual $1.1 million Aurora prize in 2016 to recognize humanitarian courage, commitment and impact. (Vardanyan contributes the majority of support for the prize fund.)

This year’s winner was Kyaw Hla Aung, a lawyer and activist on behalf of the Rohingya refugees in Myanmar. Last year’s laureate was Dr. Tom Catena, who worked in Sudan’s Nuba mountains and in 2016 Marguerite Barankitse, who worked with orphans in Burundi. “We all remember the people who were killed, but let’s look at those who have been saved,” says Vardanyan. “We should say thank you and give something back. That’s not about human rights, but human values.”

He has also donated significant amounts to education, notably through the creation of a school in the Dilijan district in northern Armenia. Yet much of his activity has been what he characterizes as “commercial social impact” investments through “anchor projects” inspired by a series of principles. These include an approach that is “private-public” rather than “public-private” (or state-led) and a focus on projects that are ambitious and scalable. He has encouraged investments from the country’s unusually large diaspora of 7 million, who make up more than twice the number of Armenian inhabitants.

“They have been good but bad for Armenia,” he says. “They give $2 billion a year, which helps people to survive, but creates the wrong message. Becoming dependent on their external funding is like dependency on oil: if it’s free of charge, you don’t value it.” His priorities came from Armenia 2020, a project he asked McKinsey to draw up 15 years ago. The consultancy highlighted the pivotal importance of education, healthcare, urban development, cultural heritage and national identity to growth. “We’ll do another report in 15-20 years to see if it’s working,” he says. “But there are already some success stories.” He points, for example, to the funding of a cable car to Armenia’s remote Tatev monastery, which has helped sharply boost tourism and investment in the area.

He regards Armenia as a test bed for some 25 other small, “invisible” countries with similar characteristics, such as Moldova, Macedonia and Nicaragua.

“No one cares about them, so it is difficult to invest. The costs of charitable giving are high. I thought, how can we convert this problem into a solution to create something common for other countries like it?” But just as he stresses the need for long-term planning as wealth passes to a new generation of post-Soviet families, he also sees the need for patience. “That’s one of the biggest challenges. The expectation of a return is usually a maximum of 10 years in Armenia. Our vision is 25 years.”