Regulations for the Associations Support Fund: Investment Guidelines and Prohibition of Conflict of Interest

In a strategic move aimed at strengthening institutional work in the Kingdom of Saudi Arabia, the National Center for the Development of the Non-Profit Sector has adopted the new regulatory bylaws for the "Associations Support Fund." These bylaws aim to establish a comprehensive institutional framework that supports and empowers non-profit organizations financially and administratively, thereby ensuring increased operational efficiency and enhancing their contribution to comprehensive national development.

Vision context and the importance of the non-profit sector

The issuance of these regulations aligns with the objectives of the Kingdom's Vision 2030, which places great importance on the non-profit sector. The Vision aims to increase the sector's contribution to the GDP to 5% and to raise the number of volunteers to one million. These regulations are a fundamental pillar for achieving the financial sustainability of associations, shifting them from complete reliance on temporary donations to building a stable investment and operational system that ensures the continuity of their community services.

Areas of support and empowerment mechanisms

The new regulations stipulate a wide range of support areas, with the fund undertaking to support programs and projects that contribute to the growth of associations and the development of their institutional capacities. This support is not limited to direct financial assistance, but extends to include:

• Human resource development: Supporting training programs to develop employees in associations and enhance their functional capabilities.
• Knowledge support: Funding studies and research that contribute to the development of associations’ work and programs based on scientific principles.
• Promoting volunteering: Supporting volunteer initiatives and improving the volunteer work environment within associations.
• Supporting emerging associations: Providing the necessary support to new associations to build their institutional capacities in their early stages.

Strict investment controls and a ban on conflicts of interest

The regulations placed particular emphasis on governance and transparency, establishing precise controls for the investment of the fund's assets. Article 21 and subsequent articles stressed the necessity for all investments to be fully compliant with the provisions of Islamic Sharia. The regulations explicitly prohibited engaging in investments that violate regulations or Sharia, dealing in securities whose trading is suspended, or investing outside the Kingdom, all to ensure the preservation of the fund's assets and minimize risks.

Regarding integrity, Article Fifteen emphasized the principle of "prohibiting conflicts of interest," whereby any member of the Fund's committee is prohibited from having any direct or indirect involvement in any business or contracts conducted on behalf of the Fund. The regulations require members to immediately disclose any potential conflict and to abstain from voting in such cases, to ensure the impartiality and integrity of decisions.

Administrative structure and oversight

The regulations established a clear administrative structure for the fund, comprising a supervisory committee with experts in social work, economics, and investment, as well as representatives from relevant entities such as the Social Development Bank and the Ihsan platform. A chief executive officer was also appointed to manage the fund's day-to-day operations and implement approved policies, and is required to submit periodic and annual reports to ensure continuous performance monitoring.

Cases of support being blocked and withheld

To ensure that support reaches those who are entitled to it, the regulations clearly define the grounds for preventing or withholding support, including providing inaccurate information, using support for purposes other than those for which it was intended, or committing serious financial and administrative violations. The fund has the right to recover support funds if violations are proven, thus reinforcing the principle of accountability and adherence to regulations.