In a significant regulatory step aimed at enhancing the efficiency and sustainability of the non-profit sector in Saudi Arabia, the National Center for Non-Profit Sector Development has adopted the new “Associations Support Fund” regulations. These regulations establish a comprehensive institutional framework designed to empower non-profit organizations financially and administratively, strengthen their developmental contributions, and implement rigorous controls to ensure the highest standards of governance and transparency while preventing conflicts of interest.
Strategic context within Saudi Vision 2030
This regulation cannot be viewed in isolation from the Kingdom's broader strategic directions. It represents a fundamental part of the objectives of Saudi Vision 2030 , which has given special attention to developing the non-profit sector and increasing its contribution to the GDP from less than 1% to 5%. Since its establishment, the National Center for the Development of the Non-Profit Sector has been working to achieve this goal by building an integrated system of legislation and enabling tools. The "Associations Support Fund" serves as a vital financial and investment arm for implementing this vision on the ground, transforming the sector from traditional charitable work to a concept of sustainable development with a measurable impact.
Key features of the new regulations: Governance and sustainability
The new regulations are based on several key pillars to ensure their objectives are achieved efficiently and effectively, the most important of which are:
1. Strict governance and prevention of conflicts of interest
The regulations unequivocally prohibit conflicts of interest. Article Fifteen stipulates that a committee member may not have any direct or indirect involvement in any business or contracts conducted on behalf of the fund. Furthermore, Article Twenty-Two prohibits investment in any sectors that violate Islamic Sharia principles or applicable regulations in the Kingdom, thus ensuring that resources are directed towards safe and responsible investments.
2. Diverse support mechanisms to empower associations
The fund's role was not limited to direct financial support, but also included broad areas of support aimed at building the capacities of associations and enhancing their sustainability, including:
- Supporting programs and projects: Funding initiatives that contribute to the growth and development of associations.
- Building institutional capacity: Supporting qualification and training programs for workers in the sector.
- Studies and Research: Funding research that contributes to the development of the work of associations.
- Social investment: Encouraging innovative initiatives that achieve a sustainable social impact.
3. A clear organizational structure and defined powers
The regulations define the fund's structure, headed by a supervisory committee whose chairperson is appointed by the center's board of directors. The committee includes representatives from specialized entities such as the Social Development Bank, the Ihsan platform, and experts in law, economics, and investment. This committee oversees all aspects of the fund's operations, approves its strategies and policies, and reviews its performance periodically, ensuring well-informed decisions based on diverse expertise.
Expected impact: A qualitative leap for the non-profit sector
This regulation is expected to have a profound positive impact at both the local and regional levels. Locally , it will contribute to raising the level of professionalism among NGOs, enhancing their financial sustainability by reducing their reliance on limited funding sources, and directing their efforts towards development projects with a clear social and economic impact. Regionally , this step positions the Kingdom among the leading countries in regulating and developing the non-profit sector, offering an advanced model of governance and empowerment that can be adopted across the region. It also increases the sector's attractiveness for partnerships with international organizations and institutions concerned with sustainable development.
