Preventing conflicts of interest and separating Zakat funds: Key provisions of the new associations regulations

The National Center for Development issued non-profit sector Updated executive regulations for the associations system andnon-governmental organizations In the Kingdom, to enter into force, and obliging existing entities to regularize their status within a year, with the aim of Governance The sector and its developmental empowerment.
The executive regulations, in their latest amendments, obliged all existing civil associations and institutions to adjust and correct their situations in accordance with the new provisions within one calendar year from the date of their publication.
The center warned that if this specified deadline passes without the association or institution making the correction, it will be subject to strict regulatory procedures starting with a warning and reaching suspension of activity or direct dissolution.

non-profit entities

The new amendments emphasized the necessity of completely separating Zakat funds, obligating non-profit entities to establish a separate bank account and a dedicated register for these funds to ensure their disbursement is strictly in accordance with Islamic Sharia principles.
The new regulations also clarified the requirements for establishing non-profit organizations, stipulating that a minimum of ten legally competent Saudi citizens must submit an application for establishment, and that their records must be free of any convictions related to moral turpitude or dishonesty.
The regulations granted young people the right to early involvement in non-profit work, facilitating the membership and voting rights of those who have reached the age of fifteen in general assemblies, though they are not eligible to run for board positions.

Preventing the monopolization of positions

The center emphasized the regulation of board term limits to prevent the monopolization of positions, stipulating that each term should not exceed four years, and requiring explicit approval from the general assembly if a member wishes to run for more than two consecutive terms.
The regulations also outlined strict controls to protect donation funds, prohibiting boards of directors from making financial decisions outside the scope of the bylaws without prior authorization from the general assemblies, and mandating the appointment of a certified external auditor for rigorous oversight.
The new legislation definitively closed the door to conflicts of interest, prohibiting all center employees and supervisory bodies from working in any administrative, contractual, or advisory capacity within NGOs and civil society organizations.

Charitable and developmental work

The regulations assign the center significant oversight powers, enabling it to intervene immediately by dismissing any board of directors, appointing a temporary replacement, or suspending executive officials in cases of serious violations of regulations, public morals, or Islamic law.
The decision also stipulates the reorganization of coordinating councils by establishing a council for non-profit organizations and another for institutions, with the aim of unifying efforts, representing the sector regionally and internationally, and forming regional and specialized committees to enhance performance quality.
This pivotal decision will come into effect ninety days after its official publication, superseding all previous regulations and ushering in a new era of governance and institutional transparency for charitable and development work in the country.