Allocating endowment proceeds to the endower: Saudi endowments clarify the regulations
In an important clarification regarding the regulations governing the endowment sector, the General Authority for Endowments in the Kingdom of Saudi Arabia affirmed that it is permissible for a donor to stipulate that the proceeds of an endowment to him for his lifetime. This practice is fully compliant with Sharia principles and applicable regulations. The Authority explained that the financial returns are disbursed after the donor's death to the entities and beneficiaries explicitly designated in the endowment's founding document.
Endowments (waqf) are a fundamental pillar of Islamic civilization, representing a form of ongoing charity whose reward continues even after the death of its donor. Historically, endowments have played a pivotal role in financing public facilities such as mosques, schools, and hospitals, and in supporting the poor and needy, thus contributing to social solidarity and sustainable development in Muslim societies throughout the ages. These modern regulations aim to strengthen this historical role and adapt it to the demands of the times.
Organizational flexibility to enhance the sustainability of endowment revenues
This clarification from the Authority reflects the flexibility inherent in the modern endowment system in the Kingdom, which aims to encourage individuals and institutions to establish endowments and contribute to community development. Allowing the endower to benefit from the proceeds of their endowment provides them with personal financial security and removes one of the obstacles that might deter some from initiating endowments for fear of needing those assets in the future. This regulation balances fulfilling the humanitarian and social aspirations of the initiators with ensuring the sustainability and continuous growth of resources, thus enhancing the appeal of endowments as an effective development tool.
Strict controls to protect the will of those standing
In a related context, the General Authority for Endowments emphasized that the fundamental principle governing the endowment system is full adherence to the conditions stipulated by the donors and respect for their wishes, as this is the cornerstone of organizing endowments and directing their expenditures. The Authority affirmed that any alteration or deviation from these conditions is impermissible under any circumstances except in very limited and exceptional cases dictated by the best interests of the endowment. Such modifications may only be made by a court ruling issued after a thorough examination of the case, such as when fulfilling the original condition becomes impossible, or when its continuation would cause demonstrable harm threatening the endowment's survival, or if it conflicts with public regulations or the provisions of Islamic law.
These precise regulations align with the objectives of the Kingdom's Vision 2030, which aims to develop the non-profit sector and increase its contribution to the GDP. By providing a clear and stimulating regulatory environment, the Kingdom seeks to maximize the developmental impact of endowments, transforming them into an effective economic and social pillar that supports various aspects of life and contributes to achieving comprehensive national prosperity.
