The Ministry of Endowments clarifies the mechanism for determining the beneficiaries of unknown endowments and their regulations
The General Authority for Endowments issued a comprehensive clarification regarding the approved mechanisms for determining the beneficiaries of “unknown endowments,” as part of its ongoing efforts to regulate and govern the endowment sector in a way that ensures the sustainability of assets and fulfills the conditions of the endowers. This clarification comes within the guidance manual launched by the Authority to simplify the legal and regulatory provisions, and to enhance awareness among trustees and the public about how to manage and invest endowments in the best possible ways.
The concept of anonymous endowments and the mechanism for dealing with them
The authority explained in its statement that an endowment is classified as "of unknown beneficiary" when the origin and status of the endowment are definitively established, but precise information regarding the endower's intention is lacking, or there is no explicit and documented text specifying the recipient of the proceeds. The authority emphasized that dealing with this type of endowment is not done arbitrarily, but rather is subject to precise Sharia-compliant guidelines aimed at ensuring that rights are accurately delivered to their rightful owners.
The authority indicated that the process of determining the beneficiaries involves several investigative stages, beginning with reviewing historical documents and records, searching for evidence surrounding the endowment, referring to prevailing customs at the time of the endowment, or relying on the judgment of trusted trustees through old records and reliable testimonies that may reveal the endower's intention. If all avenues of investigation are exhausted and no compelling evidence is found, the endowment's proceeds are spent on "general charitable causes," as it is considered a charitable endowment intended for reward and merit, which aligns with the jurisprudential principles that prioritize the public interest when specific allocation is not possible.
The importance of regulating the endowment sector in light of Vision 2030
This clarification is of paramount importance in the context of the significant transformations underway in the non-profit sector in Saudi Arabia, where Vision 2030 places particular emphasis on the endowments sector to enhance its contribution to the GDP and community development. The existence of clear mechanisms for managing unknown endowments contributes to unlocking financial and real estate assets that might otherwise be idle due to a lack of information, thereby reintegrating their returns into the economic and social cycle.
Furthermore, the governance of endowments and the clarification of their processes contribute to strengthening trust among businesspeople and new donors, as legislative and regulatory clarity is a fundamental pillar for encouraging a culture of endowment. The General Authority for Endowments plays a pivotal role in transitioning endowment work from traditional individual practices to organized institutional work that ensures the preservation of the principal and the allocation of its benefits according to the highest standards of transparency.
Legal and social dimension
From a Sharia perspective, upholding the conditions stipulated by the endower is obligatory, as scholars have determined that "the endower's conditions are like a religious text." Therefore, establishing precise regulations for anonymous endowments protects endowments from erroneous interpretations and ensures the trustees' accountability. From a social perspective, directing the proceeds of these endowments towards general charitable causes contributes to meeting the needs of the most vulnerable groups and supporting developmental, health, and educational projects, thus reinforcing the values of social solidarity upon which the endowment system in Islamic civilization has been based for centuries.
The Authority concluded by affirming that the approved model for managing endowments takes into account the balance between preserving the endowment's principal and developing it for investment, and between spending the returns in their legitimate channels, calling on trustees and those interested to benefit from the guidance manuals and electronic services it provides to ensure the integrity of endowment procedures.
