The Endowments Authority: The conditions stipulated by the endower determine the distribution of the endowment's proceeds, not the inheritance
The General Authority for Endowments in the Kingdom of Saudi Arabia affirmed a fundamental principle governing the distribution of endowment proceeds, clarifying that the donor's disposal of their property is a voluntary act subject to their conditions and free will, and is not bound by the established rules and provisions of the inheritance system. This clarification aims to resolve any ambiguity and provide a clear framework for both donors and beneficiaries, thereby enhancing the flexibility of the endowment sector and encouraging its growth.
The authority clarified that the endower has complete freedom to determine how the proceeds of their endowment are distributed among their descendants, both sons and daughters. Legally and religiously, they may stipulate in the endowment deed that the proceeds be distributed equally between males and females, or they may choose to apply the Islamic inheritance rule, "the male receives twice the share of the female." This dual option empowers the endower to structure their endowment in a way they deem beneficial and consistent with their endowment's objectives and goals, whether the aim is to achieve equal support or to follow the traditional inheritance distribution.
The historical and organizational context of endowments in the Kingdom
Waqf (or endowment) is a long-established Islamic system, a form of ongoing charity in which the endower dedicates an asset (real estate, shares, or cash) and allocates its benefits or proceeds to charitable causes or their descendants. Waqf has played a pivotal role in funding social, educational, and healthcare services throughout Islamic history. In the Kingdom of Saudi Arabia, the endowment sector witnessed a qualitative leap with the establishment of the General Authority for Endowments by Royal Decree No. (A/139) dated 7/7/1437 AH, which aims to regulate, preserve, develop, and grow endowments, contributing to the realization of the Kingdom's Vision 2030 goals of strengthening the role of the non-profit sector and increasing its contribution to the gross domestic product.
The importance of legislative flexibility and its expected impact
Emphasizing that a waqf (endowment) is a voluntary act, distinct in nature from obligatory inheritance, is of paramount importance on several levels. At the local level, this flexibility encourages individuals and institutions to establish new waqfs, as the endower is assured that their conditions will be strictly adhered to. Furthermore, this legislative clarity reduces the likelihood of future family disputes among heirs or beneficiaries, which often arise from confusion between waqf and inheritance laws.
On both the economic and social levels, revitalizing the endowments sector means directing more sustainable assets to serve the community, thus easing the burden on the state budget and supporting development initiatives in various fields. The Authority emphasized the critical importance of accurately and clearly documenting the terms of the endowment in the official deed, as this serves as a safeguard to ensure the fulfillment of the donor's wishes and protect the endowment from any potential disputes, thereby guaranteeing its stability and financial and social sustainability for future generations.
