Regulations for the Associations Support Fund: Governance and Investment Details

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In a strategic move aimed at regulating and empowering the non-profit sector, the National Center for the Development of the Non-Profit Sector in Saudi Arabia has adopted the regulations for the "Associations Support Fund." This step complements the Kingdom's ongoing efforts to develop the third sector, in line with the objectives of Vision 2030, which seeks to increase the non-profit sector's contribution to the GDP and enhance its social and economic impact.

Context of the shift towards corporate sustainability

The issuance of this regulation marks a pivotal moment in the history of charitable and developmental work in the Kingdom, as it shifts the focus from traditional direct support to building a sustainable institutional framework. The new regulation aims to establish solid foundations for governance and transparency, thereby enhancing the trust of donors and supporters and ensuring that financial resources are directed towards developing and improving the operational efficiency of non-profit organizations, rather than relying entirely on sporadic seasonal donations.

Areas of support and empowerment mechanisms

The approved regulations stipulate a wide range of support pathways offered by the Fund, which are not limited to direct financial support, but extend to include:

Human resource development: Qualifying employees in associations and developing their functional capabilities to ensure professional work.
Knowledge support: Funding studies and research that contribute to the development of association programs based on scientific principles.
Promoting volunteering: Supporting initiatives that improve the quality of volunteer work within organizations.
Investment and Innovation: Encouraging associations to find innovative solutions and investments that ensure their financial sustainability.

Strict governance and prohibition of conflicts of interest

The regulations placed great emphasis on integrity and transparency, establishing precise guidelines for the work of the Fund Committee. Article Fifteen specifically stressed the prohibition of conflicts of interest, obligating committee members to disclose any direct or indirect interest in contracts or projects under consideration, and barring them from voting in such cases. The regulations also emphasized the confidentiality of information and the prohibition of exploiting one's position for personal gain, reflecting a commitment to global governance standards.

Investment guidelines: Adherence to Sharia principles and risk reduction

Regarding financial resources, the regulations established a conservative investment framework that balances return and risk, as emphasized in Article 22:

Legal obligation: Prohibition of entering into any investments that violate the provisions of Islamic law.
Regulatory compliance: Preventing investment in companies or assets that violate applicable regulations.
Risk management: Avoiding securities that are suspended from trading, and limiting investments to within the Kingdom to strengthen the national economy and facilitate monitoring.

Eligibility and oversight requirements

To ensure that support reaches those who are entitled to it, the regulations stipulate that eligibility is contingent upon possessing a valid license, an active bank account, and compliance with regulations through registration on the electronic portal. The fund also grants broad oversight powers, including the ability to withhold or recover support in cases of misleading information, misuse of funds, or the commission of financial and administrative violations, thus ensuring sector discipline and safeguarding financial resources.