What is a Nonprofit Foundation?
A nonprofit foundation – under the provisions of this law – is any entity established for a fixed or indefinite duration by one or more natural or legal persons, or both, that is fundamentally non-profit, and is created to achieve one or more public benefit or specific purposes. It relies on funds allocated by its founder(s) in the form of capital, endowments, grants, or bequests. Family and private funds of all types are considered nonprofit foundations, and the regulations define what falls under such funds. Each supervising authority of a fund must set rules for it that comply with this law and do not impose any obligation on the state, after obtaining the approval of the competent authority and the Ministry.
How is a Nonprofit Foundation Established?
The application is submitted through the National Center for Non-Profit Sector’s electronic service.
What is a Family Fund?
Strengthening family ties. Promoting solidarity and harmony among family members. Resolving disputes. Cooperating in acts of goodness and piety. Contributing to organizing charitable activities within the family.
What is the General Assembly?
It consists of the founding members and members whose membership in the association has lasted for at least six months, provided they have paid the membership fees, if applicable.
Is it required to submit a bylaws document when establishing a nonprofit association?
This process has been automated by creating an electronic template that includes all the variable provisions of the bylaws while adhering to the fixed provisions in the model bylaws approved by the National Center for Non-Profit Sector. The electronic template with its inputs serves as a preliminary bylaws document. After establishment, the bylaws will be printed and approved by the National Center for Non-Profit Sector, including all the information provided by the applicant.
Must the founders (natural or legal persons) be Saudi nationals to establish a nonprofit foundation?
Yes.
What decisions can the Center make regarding foundations?
As per the powers stated in the Law of Nonprofit Associations and Foundations and its implementing regulations.
Is an association allowed to directly collect donations from donors to support its resources?
No, the association is not permitted to collect donations to support its resources. According to Article 39 of the Law of Nonprofit Associations and Foundations, the collection of donations is limited to implementing specific programs. (Public benefit associations may collect donations, and other associations may collect donations – after center approval – to implement specific programs, provided that all relevant laws, regulations, and guidelines issued by the competent authorities are followed.
What procedures must be taken if an association receives foreign funding without obtaining the necessary approvals?
Article 87 of the Implementing Regulations of the Law of Nonprofit Associations and Foundations states: In case an association or foundation violates any provision of the law, the regulations, or its bylaws, it may take the following actions: Warn the association or foundation of the violation and grant a period not exceeding 30 days to rectify it. If the period expires without rectification, issue a final warning and grant an additional 30 days. If the final warning period expires without rectification, the center may take any of the following measures, considering the severity and recurrence of the violation: Suspend a member of the association or foundation from working in associations or foundations for a specified period. Permanently suspend a member from working in associations or foundations. Dismiss the board of directors or a board member and appoint a temporary replacement. Temporarily suspend the activities of the association or foundation. Merge the association with another. Dissolve the association or foundation.
How are the members of an association’s Board of Directors selected?
Article 25 of the Implementing Regulations of the Law of Nonprofit Associations and Foundations states the following: The founding members shall form the association’s first Board of Directors as part of the establishment procedures. It is prohibited to combine membership of the Board of Directors with employment in the department responsible for supervising the association or supervising authority, except with the approval of the Minister or his delegate. The General Assembly shall form an election committee consisting of at least two members – who are not candidates – to manage the process of electing Board of Directors members for the second term and subsequent terms. The role of the committee ends upon the announcement of the elected Board members. The term of the Board of Directors is four years.