As part of its ongoing efforts to regulate the endowment sector and enhance its governance, the General Authority for Endowments in the Kingdom of Saudi Arabia clarified the approved mechanism for determining the beneficiaries of “unknown endowments,” as part of its efforts to issue guidance manuals aimed at simplifying Sharia and regulatory provisions, and raising awareness among trustees and those interested in how to manage and invest endowment assets with high efficiency.
The concept of anonymous endowments and the mechanism for dealing with them
The authority clarified that an endowment is classified as “of unknown beneficiary” when its legal validity is established, but there is a lack of definitive information regarding the endower’s intention, or when there is no explicit text specifying the recipient of the proceeds. The authority emphasized that dealing with such cases is not arbitrary, but rather subject to precise Sharia-compliant guidelines that ensure accountability and the achievement of the intended benefit.
The authority indicated that the process of determining the beneficiaries of the endowment follows a clear hierarchy, beginning with research and investigation of documents and records, or relying on circumstantial evidence and prevailing custom, or the discretion of the trustees based on evidence such as old records and reliable testimonies that may indicate the wishes of the endower. If all avenues of inquiry are exhausted and no conclusive evidence is found, the endowment proceeds are directed to "general charitable causes," as it is considered a charitable endowment aimed at benefiting Muslims and the community.
Historical context and the importance of governance
This measure comes at a significant historical juncture, as endowments (waqf) have been a cornerstone of the Islamic economy and social solidarity throughout the ages, contributing to the development of civilization by supporting education, healthcare, and social welfare. With the evolution of the Kingdom's legal framework, the shift from traditional individual management to organized institutional practices has become an urgent necessity to ensure the sustainability of these endowments and protect them from collapse or disuse due to a lack of information.
Economic and social impact
This clarification is of paramount importance on both the economic and social levels, as it contributes to unlocking financial and real estate assets that might otherwise have been idle due to a lack of awareness regarding their intended use. By directing the proceeds of these unknown endowments towards general charitable causes, financial liquidity is injected into developmental and philanthropic projects that serve the community, thereby enhancing the contribution of the non-profit sector to the GDP. This aligns with the objectives of the Kingdom's Vision 2030 , which places great emphasis on developing the endowment sector and increasing its contribution to national development.
The Authority concluded by affirming that the approved model for managing endowments takes into account the balance between preserving the endowment's principal and developing it for investment, and spending the returns in their legitimate channels, which enhances trust and transparency in the endowment work environment and encourages businessmen and members of society to establish new endowments based on a clear and stimulating regulatory environment.
