The National Center for the Development of the Non-Profit Sector issued a detailed clarification regarding the fundamental differences between "family funds" and "charitable funds," highlighting their complementary roles in serving Saudi society, despite the clear differences in their establishment requirements and target groups. This clarification comes within the framework of the Kingdom's ongoing efforts to regulate and institutionalize charitable work to ensure its sustainability.
Family funds: Strengthening kinship ties and institutionalizing solidarity
The center explained that the core identity of family funds is firmly based on "blood ties and kinship." These funds aim to transform spontaneous family giving into organized, institutionalized action, with their services confined to the immediate family circle. These entities strive to meet the economic and social needs of family members, thereby strengthening kinship ties and ensuring that support is distributed to those who deserve it regularly and transparently, avoiding any haphazard approach.
Community funds: Legislative flexibility to serve the wider community
In contrast, community trusts are characterized by broad legislative flexibility, as regulations do not require any familial relationship between founders or members. This model allows individuals or groups (whether natural or legal persons) to establish trusts that serve diverse mutual and cooperative purposes. The scope of these trusts extends beyond the family to include colleagues, neighbors, or groups of friends, thus stimulating sustainable development initiatives that serve the public interest.
The context of Vision 2030 and the development of the non-profit sector
These regulations cannot be viewed in isolation from the broader context of Saudi Vision 2030, which has placed significant emphasis on the non-profit sector (the third sector). The Vision aims to increase this sector's contribution to the GDP to 5% and to raise the number of volunteers to one million. These regulations governing family and charitable trusts are a cornerstone in transforming social work from individual initiatives into an institutionalized system subject to governance and oversight, thereby enhancing the efficiency of charitable spending.
Expected social and economic impact
The clear distinction between these two approaches maximizes the developmental impact in the Kingdom. While family funds provide a small social safety net that protects families and spares them the indignity of asking for help, community funds address broader societal issues and foster a spirit of cooperation among diverse segments of society united by shared interests. This precise structure contributes to directing financial and human resources more effectively and strengthens public trust in official channels of giving.
