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The National Center for Nonprofit Sector (NCNP) has rolled out new executive regulations for charitable funds, to enhance their governance, operations and financial management. The new guidelines — which were published in Umm Al Qura — will come into effect within 30 days.
New requirements for setting up a new fund: To set up a charitable fund, interested parties must fill out a new and standardized application form to the NCNP, in addition to submitting comprehensive documentation, and a detailed fund charter. These funds are prohibited from setting up branches outside of the Kingdom.
Oversight + governance: Charitable funds are required to operate strictly within their stated objectives, as approved by the NCNP. Any changes to these objectives or the fund’s legal status or operations require explicit approval from the regulatory body. Funds must comply with governance standards, including the establishment of a Board of Trustees for financial oversight, and maintaining a register with detailed information such as the fund’s name, registration details, and management structure. They are also required to maintain detailed financial records, including sources of income.
At the end of the road: Upon dissolution, funds must distribute their assets to their members based on their contribution share, unless the fund’s charter specifies otherwise, Members must also address any outstanding obligations or claims against the fund and notify the NCPC of the liquidation. Public access to the fund’s records is not permitted without approval from the fund’s founders or authorized representatives.
