The difference between family and private funds and their role in Vision 2030
The National Center for the Development of the Non-Profit Sector revealed details of the fundamental and organizational differences between “family funds” and “community funds,” highlighting the complementary role that both models play in serving Saudi society, despite the clear differences in the conditions of establishment and the target groups.
Key differences in establishment and scope
The center explained that the core identity of family funds is strictly based on blood ties and kinship, requiring a familial relationship between the founders and beneficiaries. These funds primarily aim to strengthen family bonds and institutionalize social solidarity within the family unit, ensuring that the economic and social needs of relatives are met in an organized and sustainable manner.
In contrast, community trusts are characterized by broad legislative flexibility, as regulations do not require any familial relationship. The systems allow individuals or groups to establish these trusts based on shared interests, professional relationships, or neighborhood ties, thus opening the door wide to diverse community initiatives that extend beyond the family to encompass broader segments of society.
Context of Vision 2030 and the development of the third sector
These regulatory clarifications come within the context of the significant transformation underway in the non-profit sector in Saudi Arabia, as part of the goals of Vision 2030. The Kingdom aims to increase the non-profit sector's contribution to the GDP to 5% by transforming charitable work from unregulated individual efforts into institutional work subject to governance and transparency.
Organizing family and community funds is a pivotal step in this direction, as it contributes to directing financial resources and voluntary efforts towards clear development paths, ensuring the sustainability of social impact and reducing waste, as well as promoting a culture of responsible giving.
Expected social and economic impact
From a social perspective, family funds have historically played a role in maintaining the cohesion of Saudi society, as they represent an extension of the values of solidarity deeply rooted in local culture. Community funds, on the other hand, represent a more recent development that promotes the concept of "responsible citizenship" and community engagement among colleagues and friends, thus encouraging the launch of development initiatives that benefit neighborhoods and cities.
In conclusion, the center stressed that the difference in administrative flexibility between the two models—where strictness in ratios is maintained for family funds and breadth in objectives is maintained for community funds—creates a healthy diversity that serves the end beneficiary’s interests and maximizes the efficiency of the non-profit sector as a strategic partner in comprehensive national development.
