In a move aimed at enhancing the resilience of the non-profit sector and enabling it to keep pace with the rapid developmental transformations in the Kingdom of Saudi Arabia, the Minister of Human Resources and Social Development, Chairman of the Board of Directors of the National Center for the Development of the Non-Profit Sector, Engineer Ahmed Al-Rajhi, issued a decision approving fundamental amendments to the executive regulations of the Associations and Foundations Law.

Context of the amendments and Vision 2030

These amendments come within the framework of ongoing efforts to achieve the goals of the Kingdom's Vision 2030, which places great importance on the third (non-profit) sector and seeks to increase its contribution to the GDP to 5%. This step is part of a package of regulatory reforms aimed at governing the sector, facilitating establishment procedures, and granting associations and institutions greater flexibility in responding to crises and urgent community needs, thereby enhancing the efficiency of charitable and developmental work.

3 situations that allow exceeding the set goals

The new amendments clearly stipulate that the bylaws of associations and non-profit organizations define their objectives and activities. However, to allow for operational flexibility, the amendments permit associations to exceed these objectives in three main cases, provided they obtain approval from the National Center for Non-Profit Sector Development and coordinate with the supervisory authority. These cases include:

• Pandemic and emergency situations.
• Seasons that require specific intervention.
• Urgent development needs and other cases that the center deems appropriate.

Administrative and procedural facilities

The amendments included simplifying administrative procedures, eliminating the requirement for individuals to submit a copy of their national identity card when applying for establishment, and requiring only basic information about the board members for the first term for legal entities. The amendments also stipulated that the association's license period would be five years, commencing upon its acquisition of legal personality.

Regarding geographical expansion, the new regulations have facilitated the procedures for establishing branches, as they have eliminated the requirement for approval by the General Assembly and replaced it with approval by the Board of Directors only, which speeds up the pace of work and expansion.

Governance of boards of directors and general assemblies

To ensure the quality of decisions, the amendments stipulated that the center must approve any extraordinary general assembly resolutions related to mergers, amendments to the bylaws, or voluntary dissolution. Conversely, the general assembly was granted the authority to augment the board of directors with external expertise, allowing it to elect qualified members from outside the association, provided that these members do not exceed one-third of the total membership.

The amendments also added new tasks for the Board of Directors related to human resource development and attracting talent, and established a clear mechanism for the handover process between the previous and new Boards of Trustees to ensure the continuity of institutional work.

Establishment of two councils for associations and civil institutions

The regulations included two new sections to organize the work of the "Council of Non-Profit Organizations" and the "Council of Non-Profit Institutions," with their headquarters in Riyadh, and the possibility of establishing regional and specialized committees. These two councils aim to:

• Representing the sector before governmental and semi-governmental bodies.
• Coordination to unify efforts and achieve integration between associations and institutions.
• Participation in local events and conferences, and international representation after approval by the center.
• Conducting studies and surveys and spreading a culture of financial sustainability.
• Defending the interests of associations and institutions and representing them before judicial authorities in specific cases such as defamation.

Expected impact

These amendments are expected to contribute to a qualitative shift in the performance of the non-profit sector, by reducing bureaucracy, enhancing rapid response to changes, and empowering experienced leaders in managing associations, which ultimately benefits beneficiaries and enhances the social and economic impact of the sector in the Kingdom.

The National Center for the Development of the Non-Profit Sector in the Kingdom of Saudi Arabia announced the adoption of the “Guide for Naming Associations, Foundations, Family and Community Funds”, in an organizational step aimed at governing the procedures followed when choosing names for non-profit entities, and ensuring their compatibility with the corporate identity and the regulations in force in the Kingdom.

This guide clarifies the precise standards and procedures that founders and administrators of these entities must follow when submitting applications for establishment or name changes. Its primary aim is to prevent name duplication and ensure that the name clearly and unambiguously reflects the association's or organization's activities, making it easier for beneficiaries, supporters, and regulatory bodies to understand the organization's nature and objectives simply by reading its name.

The context of the Kingdom's Vision 2030 and the development of the third sector

This regulatory measure cannot be separated from the broader context of the Kingdom's Vision 2030, which has given unprecedented attention to the non-profit sector (the third sector). The Vision aims to increase this sector's contribution to the GDP from less than 1% to 5%, in addition to reaching one million volunteers. To achieve these ambitious goals, it was essential to establish a robust legislative and regulatory environment that guarantees transparency and reliability—a role that the National Center for the Development of the Non-Profit Sector has been fulfilling since its establishment by a Cabinet decision, serving as the primary umbrella organization for this sector.

The importance of governance and transparency in civil society work

The "naming" process is of paramount importance, transcending mere formality; it is the first step in establishing the legal and social identity of an entity. By implementing strict naming regulations, the center ensures the protection of the intellectual property rights of existing associations and prevents impersonation or the use of names that might suggest affiliation with governmental bodies or ownership without justification. This regulation enhances the trust of donors and grantmakers, as clarity of name and activity is a cornerstone of financial and administrative transparency.

Expected impact on the social and economic system

This guide is expected to expedite the establishment of non-profit organizations by clarifying requirements in advance, thus reducing the rejection rate of applications due to naming issues. It will also lead to greater specialization, as the new regulations encourage the selection of names that reflect specific and specialized fields rather than general and vague ones. This specialization will benefit society by ensuring the presence of organizations that efficiently and professionally address all developmental, health, educational, and social needs, thereby solidifying the concept of sustainable institutional work in the Kingdom.