Details of the new fundraising regulations in Saudi Arabia and their requirements
In a strategic move aimed at regulating charitable work, the Saudi Cabinet approved the executive regulations for the Fundraising Law. This step aims to enhance transparency and accountability in the charitable and non-profit sector by establishing a comprehensive legislative framework that regulates all forms of fundraising, whether monetary or in-kind. The new law sets precise controls for campaigns, disbursement mechanisms, and oversight, ensuring the protection of donors' funds and improving the efficiency of institutional operations.
General context and history of organizing charitable work in Saudi Arabia
Historically, the Kingdom of Saudi Arabia has placed great importance on regulating charitable work to ensure that aid reaches its intended beneficiaries. With the launch of Saudi Vision 2030, the urgent need to institutionalize the non-profit sector and develop its legislative environment became evident. These efforts culminated in the establishment of the National Center for the Development of the Non-Profit Sector, which plays a pivotal role in empowering the sector and expanding its developmental impact. The new regulations are an extension of these efforts, aiming to close any loopholes that could be exploited for fraud or the diversion of funds to illicit channels, thus aligning with stringent international standards for combating money laundering and the financing of terrorism.
The importance of the event and its expected impact
Domestically, this regulation contributes to strengthening public trust in the charitable sector, encouraging individuals and companies to actively participate in social development with confidence and assurance. Regionally and internationally, the adoption of these stringent controls reflects the Kingdom's commitment to implementing the highest standards of financial governance, reinforcing its leading position in organized and reliable humanitarian work and providing a model for the management of the third sector.
Regulating electronic donations and digital controls
The regulations stipulate that donations for licensed entities must be collected via electronic transfers using approved channels. These channels include the official websites and applications of the licensed entities, national government platforms, ATMs, points of sale, and SMS messages. To enhance security, entities are required to use a Saudi domain name for their websites and applications to increase digital credibility and protect donor data.
Strict requirements for in-kind donations and a ban on random collection
Regarding in-kind donations, the regulations strictly prohibit collecting donations outside of main offices or branches without prior authorization. Entities are required to submit detailed information including collection locations, national addresses, coordinates, and campaign costs. The regulations also emphasize adherence to regulations concerning the nature of donated materials and obtaining the necessary government approvals.
Mechanism for receiving donations from outside the Kingdom
To ensure comprehensive oversight, the regulations established a mechanism for receiving donations from abroad, requiring coordination with a specialized committee chaired by the National Center for the Development of the Non-Profit Sector, and including representatives from the Ministries of Interior, Foreign Affairs, Islamic Affairs, the Presidency of State Security, and the General Authority for Endowments. This committee reviews applications from all regulatory and security perspectives before issuing any approval.
Precise requirements for launching donation campaigns
The regulations stipulate detailed requirements for conducting campaigns, including submitting a board of directors' approval resolution, specifying the bank account, the approved budget, and a plan outlining the objectives, duration, target amount, and beneficiary groups. The names of the Saudi officials responsible for managing the campaign must also be identified, and a feasibility study for the investment projects must be submitted. The approval resolution must include transparent information that is published for the public, and the organization is obligated to provide notification immediately upon the campaign's conclusion.
Procedures for canceling and redirecting confiscated donations
The regulations allow for the cancellation of campaigns before or during their implementation, provided clear justifications and a detailed financial statement are submitted. If funds cannot be spent for their intended purpose, they are transferred to a special account in accordance with Central Bank instructions, or in-kind donations are transferred to designated locations. The regulations also govern the disbursement of donations confiscated by court order, directing them towards legitimate charitable and benevolent causes such as sponsoring orphans, building mosques, and supporting health and educational projects, in coordination with the relevant authorities.
