THE LAW FIRM OF HAZIM AL MADANI ATTORNEYS AND LEGAL CONSULTANTS
The Nature of the Non-Profit Sector and its Importance in Enhancing Community Development
The non-profit sector comprises organizations, associations, and institutions that aim to achieve social, service, or developmental goals without seeking material profits. Also referred to as civil society, the charitable sector, or the non-governmental sector, this sector plays a crucial role in promoting community participation, solidarity, diversity, democracy, and human rights.
Moreover, it’s important to highlight the governance structure of the non-profit sector in the Kingdom, which consists of various systems, regulations, and mechanisms that oversee the establishment, administration, supervision, and evaluation of non-profit organizations. The aim of non-profit sector governance is to ensure transparency, integrity, efficiency, and accountability of these organizations, thereby improving the quality of their services, programs, and impact on society. It also promotes cooperation and partnership among non-profit organizations as well as between them and other sectors, such as the government and private sector.
One prime example of partnership between non-profit organizations and other sectors in the Kingdom is the “Enhancing the Capacities of Community Organizations” project. Implemented by the King Khalid Foundation in cooperation with the Ministry of Human Resources and Social Development and the Islamic Development Bank, this project focuses on developing the capacities of non-profit organizations in areas such as strategic planning, governance, financial management, marketing, communication, and partnerships. Its goal is to enhance the role of these organizations in providing sustainable developmental services to the communities they serve.
Moreover, it’s important to highlight the governance structure of the non-profit sector in the Kingdom, which consists of various systems, regulations, and mechanisms that oversee the establishment, administration, supervision, and evaluation of non-profit organizations. The aim of non-profit sector governance is to ensure transparency, integrity, efficiency, and accountability of these organizations, thereby improving the quality of their services, programs, and impact on society. It also promotes cooperation and partnership among non-profit organizations as well as between them and other sectors, such as the government and private sector.
One prime example of partnership between non-profit organizations and other sectors in the Kingdom is the “Enhancing the Capacities of Community Organizations” project. Implemented by the King Khalid Foundation in cooperation with the Ministry of Human Resources and Social Development and the Islamic Development Bank, this project focuses on developing the capacities of non-profit organizations in areas such as strategic planning, governance, financial management, marketing, communication, and partnerships. Its goal is to enhance the role of these organizations in providing sustainable developmental services to the communities they serve.
The key principles of non-profit sector governance in the Kingdom include:
- - Respect for the sovereignty of the state and compliance with its systems and regulations.
- - Commitment to the organization's mission, objectives, and values.
- - Democratic and transparent selection of board members.
- - Clear distribution of powers and responsibilities between the board and executive management.
- - Application of professional accounting and auditing standards.
Non-profit organizations in the Kingdom, in terms of organizational and legal structure, take various forms such as:
- - Cooperative Societies: Institutions comprising a group of individuals or entities united to achieve a common economic or social interest.
- - Charitable Associations: Institutions aimed at providing humanitarian aid or relief to needy or disaster-affected groups.
- - Voluntary Associations: Institutions encouraging community participation and volunteering in service or developmental areas.
- - Non-Governmental Organizations: Institutions established by a private individual or legal entity, with no affiliation to any government entity, to achieve a social, service, or developmental goal.
In conclusion, one of the most significant objectives of Saudi Vision 2030 is to increase the contribution of the non-profit sector to 5% of the gross domestic product by 2030, across 10 fields of work. The aim is to support and facilitate charitable and volunteering work, and enhance citizens’ contribution in providing aid and support to all members of society. This has led to a twentyfold increase in the number of volunteers between 2015 and 2022.
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