Conditions and regulations for debt endowment in Islamic law, explained in detail

The General Authority for Endowments in the Kingdom of Saudi Arabia clarified the Sharia and legal provisions related to the issue of endowing debts owed by others, emphasizing that it is neither Sharia-compliant nor legally permissible to endow debts before they are actually collected and received. This clarification comes within the framework of the Authority's ongoing efforts to regulate the endowments sector and develop its legislative environment, ensuring the protection of the rights of both donors and beneficiaries, and achieving the financial sustainability of endowment assets in the Kingdom of Saudi Arabia.

Why is it not permissible to stop a debt before it is collected and received?

The authority indicated that the fundamental principle of endowments (waqf) is that the endowed property must be fully owned by the endower and have immediate and direct disposal. Therefore, debts owed by others lack the condition of actual possession and are not considered fully owned property that can be endowed and transferred to beneficiaries until they are actually collected. Incomplete or uncertain ownership does not produce the immediate effects of an endowment, which aims to prevent ambiguity and uncertainty in endowment transactions and ensure that the benefits are real and tangible.

The historical development of the organization of the endowments sector in the Kingdom

Historically, the endowments sector has received considerable attention in Islamic jurisprudence and successive Saudi legal systems, given the significant developmental and social role endowments play in supporting the most vulnerable groups and funding educational, health, and religious projects. With the establishment of the General Authority for Endowments, the sector has undergone a qualitative shift from traditional management to modern digital governance and legislation. These recent regulations aim to close legal and Sharia-compliant gaps that may arise from individual interpretations, thus contributing to building a secure and reliable endowment investment environment based on real, existing assets, rather than merely financial obligations that may be subject to default or cancellation.

Alternative pathways and systematic solutions for suspending the endowment

The authority did not neglect to provide legitimate and legal solutions for those wishing to do good; it explained that the creditor can fulfill his wish through two legal options:

• Suspension of the endowment: This is done by suspending the validity of the endowment on the condition of collecting and receiving the debt, so that the procedure becomes valid and automatic as soon as the money is received and enters the possession of the endower.
• The bequest of an endowment: This is an alternative legislative path that allows the endower to bequeath his debt after receiving it. All the provisions and conditions of the legal will adopted in Islamic jurisprudence and the Saudi system apply to this option.

The developmental and economic impact of regulating endowment transactions

Regulating the provisions relating to endowments has profound dimensions and effects on several levels:

• Locally: It contributes to enhancing the credibility of endowments as a vital development tool that supports the national economy and is in line with the Kingdom’s Vision 2030 to increase the contribution of the non-profit sector to the gross domestic product.
• Regionally and internationally: The Saudi model in governance of endowments and the development of their legislation provides a leading reference for other Islamic countries seeking to modernize their endowment sectors and benefit from the sustainable Islamic economy, thus enhancing the Kingdom’s position as a leader in institutional charitable work globally.