Details of the executive regulations for the fundraising system in Saudi Arabia
The Cabinet approved the new executive regulations for the Fundraising System, a strategic step aimed at enhancing governance and transparency in the charitable and non-profit sector in the Kingdom of Saudi Arabia. This system establishes a comprehensive legislative framework governing fundraising in all its forms, whether monetary or in-kind, and sets precise controls for campaign organization, disbursement mechanisms, and oversight, thereby ensuring the protection of donors' funds and improving the efficiency of institutional operations.
Development of charitable legislation in the Kingdom
Historically, the Kingdom of Saudi Arabia has been known as one of the largest donors and supporters of humanitarian and charitable work, both locally and internationally. With the evolution of the economic and social landscape, the need to institutionalize this sector has become increasingly apparent to ensure that aid reaches its intended beneficiaries. The establishment of the National Center for the Development of the Non-Profit Sector was a pivotal step in this direction, culminating today in the approval of the new executive regulations, which represent a qualitative leap in the organization of charitable work and close the door to any individual interpretations or arbitrary practices that could harm the sector's reputation.
Approved electronic donation channels
The regulations stipulate that fundraising by licensed entities must be conducted via electronic transfers using approved channels. These channels include the official websites and applications of the licensed entities, national government fundraising platforms, and licensed platforms belonging to the non-profit sector. Additionally, the use of ATMs, SMS services, and point-of-sale terminals is permitted. The regulations also require entities to include a Saudi domain name on their websites and applications, which enhances digital credibility and increases the level of protection and security for donors.
Strict controls on in-kind donations outside headquarters
Regarding in-kind donations, the regulations emphasized the need for licensed entities to adhere to regulations pertaining to the nature of the donated materials and to obtain prior government approvals if the type of donation requires them. Entities were also prohibited from collecting in-kind donations outside their headquarters or branches without prior official approval from the licensing authority. Furthermore, they were required to submit detailed information including collection locations, national address, coordinates, methods of solicitation used, and any associated costs.
Organizing the receipt of donations from outside the Kingdom
The regulations established a new mechanism for organizing the receipt of donations from outside the Kingdom, requiring licensed entities to coordinate with a specialized committee before issuing approval. This committee is chaired by the National Center for the Development of the Non-Profit Sector and includes representatives from the Ministries of Interior, Foreign Affairs, Islamic Affairs, Dawah and Guidance, the Presidency of State Security, the General Authority for Endowments, and any other relevant government agencies, ensuring that applications are reviewed from all regulatory and security perspectives.
Strict requirements for setting up fundraising campaigns
The regulations set out detailed requirements for campaign applications within the fundraising system. These requirements include the obligation for the organization to submit a resolution from its board of directors approving the campaign, its designated bank account, and its approved annual budget. A comprehensive plan is also required, outlining the campaign's objectives, duration, target amount, beneficiary groups, and mechanisms for disbursing funds and verifying their delivery to beneficiaries. Organizations are also required to identify the Saudi nationals responsible for managing the campaign and submit an economic feasibility study for any investment projects. Furthermore, the approval resolution must include clear information such as the organization's name, bank account number, campaign purpose, and its start and end dates.
Cancellation procedures and redirection of confiscated funds
The regulations allow for the cancellation of fundraising campaigns before or during their launch, provided that clear justifications and a detailed statement of the total donations are submitted. If donations cannot be spent for their intended purpose, the funds will be transferred to a special account in accordance with the instructions of the Saudi Central Bank, or in-kind donations will be transferred to designated locations. The regulations also outline the mechanism for disbursing donations confiscated by court order, directing them to various charitable causes such as Zakat (obligatory almsgiving), sacrificial offerings, orphan sponsorship, and health, education, and infrastructure development projects.
Expected impact of implementing the new regulations
The strict implementation of this regulation will have far-reaching positive effects. Locally, it will contribute to strengthening public trust in the charitable sector, encouraging increased donations and directing them towards sustainable development projects that align with the goals of Saudi Vision 2030, which aims to maximize the economic and social impact of the non-profit sector. Regionally and internationally, this regulation reflects the Kingdom's commitment to applying the highest global standards in combating money laundering and the financing of terrorism, thus solidifying its position as a leading and trusted model for the governance of humanitarian and charitable work globally.
