The General Authority for Endowments clarifies the mechanism for determining the beneficiaries of unknown endowments
The General Authority for Endowments in the Kingdom of Saudi Arabia has clarified the approved mechanism for determining the beneficiaries of “unknown endowments,” as part of its ongoing efforts to regulate the endowment sector and issue guidance manuals aimed at simplifying Sharia and regulatory provisions, and enhancing awareness among trustees and the public on how to manage endowments, invest them, and direct their returns in the best possible way.
The Authority explained in its guidelines that an endowment is classified as “of unknown beneficiary” when the endowment's origin and existence are established, but the endower's intention is unknown, or there is no explicit stipulation 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 regulations that ensure accountability and the achievement of the intended benefit.
The mechanism of reasoning and legal solutions
The authority indicated that the process of determining the beneficiaries of an unknown endowment begins by attempting to deduce its purpose through old documents and records, circumstantial evidence surrounding the endowment, prevailing customs at the time of the endower, or even the diligent efforts of trusted trustees. Historical records or reliable testimonies that may hint at the endower's intention may also be relied upon. If all avenues of inquiry are exhausted and no conclusive evidence is found, the endowment's proceeds are disbursed for general charitable purposes and community interests, as it is considered a public charitable endowment, thus ensuring the continuity of its reward and benefit.
Historical context and the status of endowments in Islamic civilization
This regulation is an extension of the long and distinguished history of the waqf system in Islamic civilization. Waqf has constituted the third pillar of the Islamic economy throughout the centuries, contributing to the construction of universities and hospitals, the care of orphans, and the provision of water. In the past, waqfs faced challenges related to the loss of endowment deeds or the disappearance of the founders' conditions due to the passage of time. This made the issue of "unknown waqfs" a jurisprudential and regulatory matter requiring resolution to ensure that these assets continue to fulfill their developmental role.
Economic and developmental importance in light of Vision 2030
This clarification is particularly important in light of the Kingdom's Vision 2030, which places great emphasis on the non-profit sector and aims to increase its contribution to the GDP. Establishing clear mechanisms for managing unidentified endowments will help unlock substantial financial and real estate assets that may be idle due to the lack of a designated bank. Redirecting the proceeds from these endowments towards general charitable causes means funding developmental, social, and educational projects, thereby enhancing the sustainability of charitable work and transforming it from individual efforts into a highly efficient institutional system.
In conclusion, the Authority affirmed that the approved model for managing endowments takes into account the balance between preserving the endowment’s principal and developing it for investment, and the speed with which its returns are directed to those entitled, which enhances trust and transparency in the endowment work environment in the Kingdom.
