Small Wars Journal

What Role for Crowdfunding Defense in Ukraine?

Sat, 02/26/2022 - 11:56am

What Role for Crowdfunding Defense in Ukraine?

By Garrett R. Wood 


Fresh Russian aggression is putting the Ukrainian military to the test. The conflict that began in 2014 revealed a Ukrainian military that was not prepared to defend its homeland, and both the military and the volunteer battalions that carried the weight of the conflict for the first several months reached out to the public for charitable donations to fill in critical gaps in Ukraine’s defense left by decades of corruption. Despite reforms to Ukraine’s military and defense industrial sector, crowdfunding could remain an attractive alternative method of supporting a war effort, but it is a method that comes with the risk of weakening Kyiv’s control over paramilitary groups that sometimes have extremist ties.

Ukraine experienced a surge in charitable giving in response to the loss of Crimea and its war against Russian backed separatists in the Donbas region. Citizens donated millions to the government through a texting campaign, but the government’s ineffectiveness and the continued lack of transparency in the defense industrial sector eventually caused those donations to slow and stop. The majority of Ukraine’s increased charity instead flowed to private charities focused on independently supplying Army and volunteer units. These charities were careful to make information on their activities public, and even subjected themselves to independent audits. Without such transparency they would have had the same trouble attracting donations that the Ukrainian government had.

Private charity is again increasing in response to Russian aggression, but that charity could flow to either government forces or to private military charities. If Ukrainians trust their government sufficiently, then their donations will flow into the hands of individuals that Western nations are far more comfortable working with. Government transparency therefore helps secure the flow of critical weapons, such as ant-tank missiles, which are serious threats to Russian advances. This trust, however, depends on the Ukrainian government’s anti-corruption efforts.

A number of anti-corruption reforms have been instituted in Ukraine since the revolution in 2014, and the election of a political outsider has given some hope for further reforms. More of Ukraine’s defense procurement process is transitioning to open electronic bidding which can be monitored by any interested citizen, and increased competition in the defense industrial sector is putting pressure on Ukraine’s state-owned defense conglomerate (Ukroboronprom) to modernize and cut costs. Despite these efforts, the Ukrainian perception of corruption in their country remains very high, and their donations will be driven in different directions depending on their perceptions.

Private military charities in Ukraine have proven popular since 2014. Given that the black market for arms in Ukraine has only grown since that time, these charities could easily fund the purchase of illegal arms for volunteer fighters If corruption were to hamstring the Ukrainian government’s resistance to Russian aggression. In the past, the groups funded by these private charities have performed well on the battlefield, but their record is not without accusations of human rights abuses, threatened coups, and links with terrorist organizations.

Nations seeking to support Ukraine during this time will have to consider whether or not their lethal gifts will be used appropriately despite a history of corruption and ineffectiveness. Worse, there is recent historical precedent for leaving weapons behind for enemies and para-military groups alike to capture, never mind trading those weapons with paramilitary groups for simple items like food. Watching indicators of corruption in Ukraine’s defense industry, watching the trends in black markets arms activity, watching the risk factors unique to arms sales in Ukraine, and watching trends in Ukrainian perceptions of corruption can help inform analysis of whether or not there will be a renewed need for private military charities who fund the purchase of Western weapons by groups the West may not wish to be associated with.

About the Author(s)

Garrett R. Wood is an assistant professor of economics at Virginia Wesleyan University and veteran of the US Navy. His research focuses on the intersection of economics and defense, and he has previously published peer reviewed articles on the conflict in Ukraine.