Saudi Arabia Social Welfare 2009 by B B

The Social Welfare Sector in Saudi Arabia

By Basma Bouzo, Caroline Montagu and Sarah Xefos

December 2009

TABLE OF CONTENTS Acknowledgements

Foreword

Executive Summary and Summary of Recommendations

Need for greater public sector involvement in social welfare oversight

Need for greater public sector involvement in social welfare regulation

Need for greater private sector participation in delivery of social welfare services 6 Need for the private sector to develop human resource capabilities

Conclusion

The Landscape of Social Welfare in Saudi Arabia History of social welfare

11 11

The Role of Islam; the Ministry of Labor & Social Affairs; the emergence of NGOs and Nonprofits; the Role of Women in Social Welfare Current state of social welfare

The Ministry of Social Affairs (MoSA); the shifting dynamics of NGOs and Nonprofits; the Continuing Importance of Women in Social Welfare The Current Role of the Public Sector

The Current Role of the Private Sector

Charitable societies; Foundations; Saudi NGOs with an international Presence; Royal Family; Family Foundations; Corporate Social Responsibility; Individuals; Cultural Missions Social Welfare Organizations in Saudi Arabia

Traditional Charities; Specialist Organizations; Nonprofits; Royal Foundations; Associations Addressing major challenges facing the sector

Ideal role of the public sector in social welfare

Management and guidelines for the public sector

Regulatory role of the public sector

Ideal role of the private sector in social welfare

Delivery of services role of the private sector

Volunteering and Donating

Human resource development

Conclusion

49 2

Acknowledgements The authors of this report, Basma Bouzo, Caroline Montagu and Sarah Xefos, would like to acknowledge the help, advice and support of the following organizations and individuals: the Olayan Foundation, International Power plc and Conor de Lion. The authors appreciate contributions made by Monitor Group to the compilation of this report and particularly the research material and ideas from the Monitor Institute and from Monitor’s Market Based Solutions. The British Council’s Report on Women’s Charities (2003) provided useful information and analysis, as did the Foreign and Commonwealth Office Study Visit to Saudi Arabia (2005).

Foreword The religion of Islam requires Muslims to look after the less fortunate. From the very start, from the Qur’an and from the hadith, Islam enjoins the individual to care for the poor and the needy, the sick and the destitute. To look after the poor is not a request; it is a fard, a religious duty. Zakat, which means alms-giving and purification, is the third of the five arkan (pillar) of Islam. The Prophet Muhammad in the Qur’an gives eight categories of persons who should benefit from zakat. This comes in the Surah al-Taubah (9) v 60. In the sunnah (the manner of deeds of Muhammad validated by the companions) there are clear statements about giving wealth away. “The Prophet said, ‘Charity is a necessity for every Muslim.’ He was asked, ‘What if a person has nothing?’ The Prophet replied, ‘He snould work with his own hands for his benefit and then give something out of such earnings in charity.’ The Companions asked, ‘What if he is not able to work?’ The Prophet said, ‘He should help poor and needy persons.’ The Companions further asked, ‘ What if he cannot do even that?’ The Prophet said, ‘ He should urge others to do good.’ The Companions said, ‘What if he lacks that also?’ The prophet said, ‘He should check himself from doing eveil. That is also charity.’ The service provided by a strong social welfare sector contributes immeasurably to a nation’s well-being and quality of life. Social welfare services form a critical component of care services and provide the back-up, training and encouragement that aid a country’s global competitiveness. Often these contributions cannot be measured scientifically, particularly in terms of improvement to quality of life and development of human capital. An effective social welfare sector also serves to promote a nation’s global reputation, as care for the under-privileged improves social stability and enhances the ability of a country to draw on its own human resources to fulfill its needs. To keep pace with the government’s competitiveness goals, Saudi Arabia must develop a world-class social welfare sector with improved financing, delivery, and quality of service. In guaranteeing basic services to all citizens, the social welfare sector helps to ensure that those without means in today’s Saudi Arabia have a better chance of benefiting from the Kingdom’s growth and of contributing to the economy in the future. In the religious context, a streamlined social welfare sector ensures that the requirements of Islam, to help the poor and to provide hope for the under-privileged, are met as efficiently and broadly as possible.

This report examines the social welfare sector’s growth and impact on the country in recent decades. The sector has seen significant change over the past forty years as Saudi Arabia has played its part in globalization, while protecting its cherished traditions and social norms. The central role of Islam has helped the country to adapt to change in a sustainable way. Similarly, the role of women has been redefined to reflect the changing needs of the country and a more accurate appreciation of the requirements of Islam as opposed to tribal or social preconceptions. Meanwhile, the population of Saudi Arabia is predicted to grow at an annual rate of 2.5% to 2020, well above the OECD average of around 0.6%. The percentage of the population over 60 is expected to increase from 4.8% in 2000 to 7.9% in 2025. All of this data suggests heavy demands will be made on the social welfare sector in the near future. Urgent and comprehensive reform is therefore essential to ensure continued growth and social harmony in the country. In order for the sector to achieve its potential, and to deliver the high quality services necessary to sustain a competitive workforce, public and private sectors must work together and mitigate those challenges currently hindering growth. This report, based on recent research in the Kingdom, discusses these challenges and provides a set of recommendations.

Executive Summary and Summary of Recommendations The social welfare sector in Saudi Arabia has seen considerable growth in recent decades. What began as a movement of benevolent societies—organizations established to serve as a conduit for channeling funds from the country’s wealthy to those in need—is now a thriving sector with over 450 non-governmental organizations (NGOs) and nonprofits. The Ministry of Social Affairs (MoSA) has become a major player for economic and social development. Between 2001 and 2002 almost 1.5 million people benefited from MoSA’s initiatives and from programs run by nonprofits and NGOs. An efficient and professionally run social welfare system is a natural driver of social and national progress. It helps stimulate economic development by liberating and enhancing human resources. A well-organized sector is, itself, a major employer, and also provides training that contributes to the quality and diversity of the work force. A major part of social welfare growth and reform in Saudi Arabia stems from Islam and from the role charity and social welfare play within a Muslim country. As a nation state, Saudi Arabia has evolved around the core tenets and values of Islam. The well-being of all its citizens is a a Muslim obligation and a fundamental concern of Saudi Arabian society. In parenthesis, the evolving role of women has made a big difference to the management and service provision of social welfare organizations. As this report will demonstrate, the value system derived from the teachings of Islam, the significant efforts made by public and private social welfare initiatives and the crucial role played by women have all combined to shape the character of the sector. 4

Although Saudi Arabia’s social welfare sector is expanding rapidly, poor regulation and a lack of coherent planning is hampering the positive impact of growth and investment. With one of the fastest growing populations in the world, the Kingdom faces an immediate and long-term imperative to increase the breadth of services and to enhance delivery. As the country continues to grow and take a more prominent place on the international stage, Saudi Arabia must consider how to maximize the benefits of private social welfare, and to regulate its development. The country must tackle core issues such as healthcare, poverty, and education at grass roots level and provide the tools for an improved and sustainable quality of life for its people.

Need for greater public sector involvement in social welfare oversight   

Financing mechanisms, procedures, and guidelines An environment supportive of private social welfare Collaboration and coordination mechanisms among social welfare organizations

Historical evidence has shown that social services provided by private organizations are generally more effective than those provided by government institutions. A national government with concerns of economy and security can easily be distracted from the social welfare needs of sections of the population. There are, however, many examples of successful and sizeable social welfare sectors where the government has taken on the primary responsibility to oversee and provide the necessary funding to private organizations that operate as direct providers of social welfare services. In this way, governments can avoid the logistical demands of service delivery and focus on critical, strategic areas such as oversight and direction. Transforming the sector in such a way allows direct providers to take on a greater number of focused initiatives. The shift from service delivery to oversight will have a resounding impact on the sector. A strict oversight role will allow MoSA to concentrate on re-establishing the sector’s presence n the Kingdom. MoSA must define a future for the sector and establish mechanisms for financing social welfare organizations. In ensuring proper and effective oversight, MoSA will establish a level of credibility not only for itself, but also for the sector as a whole. Such organization and accountability will serve as a strong driver for sustainable growth in the sector. In parallel, social welfare organizations should be encouraged to work more collaboratively to maximize experience, skills, and leadership. With greater crossfertilization and cooperation private organizations will find it easier to develop more ambitious and expansive programs that will have the potential to create a greater lasting impact on the people of Saudi Arabia.

Need for greater public sector involvement in social welfare regulation 5

  

Operational regulations and requirements Licensing mechanisms and processes Data collection

As an extension to its oversight role, it is also important for the state to regulate and structure the social welfare sector, as this would provide greater transparency and accountability from the NGOs and charitable organizations. Through an established regulatory environment, the government can encourage proper accounting behavior among social welfare organizations in line with its immediate and longterm strategic directions for the sector. In creating a set of mechanisms and procedures to govern the establishment, operations, and financing of social welfare organizations, the government will impose a greater standard of accountability and begin the changes that will make the sector more efficient and effective. In parallel, the improved level of transparency will help ensure the collection and dissemination of data across the sector. In carrying out research for this report, it was observed that Saudi Arabia’s social welfare sector lacks specific organizational principles that are traditionally established by regulatory bodies. For instance, the lack of established procedures for the registration and license approval process for NGOs and nonprofits hinders the creation and operation of such organizations. The lack of mechanisms to facilitate the collection and analysis of data make it close to impossible to assess the effectiveness of ongoing efforts or to identify and deploy resources as new issues arise. Lastly, the lack of transparency in the sector makes it hard to evaluate the effectiveness of social welfare efforts and leaves most financial contributors wary of making donations. In many nations around the world, the state is committed - at least - to providing accurate and timely information on its social welfare organizations. Given all the above, it is important that MoSA develops a system that ensures inefficiencies are corrected, initiatives are inline with the country’s true needs, and organizations’ accounts are transparent.

Need for greater private sector participation in delivery of social welfare services   

Direct delivery of services Corporate social responsibility Volunteering

Private sector organizations are often better suited than the state to act as a primary provider of services. One of the private sector’s most significant attributes is its ability to leverage a business and to apply a business and operational mindset to the social welfare context. In allowing the private sector to focus on service delivery, the social welfare sector could 6

experience streamlining in how services are offered, and more effective and immediate results. In assuming such a role, the private sector will also take on the equally important responsibilities of promoting both corporate social responsibility (CSR) and volunteering. CSR initiatives have taken on an important role for many of the world’s multinational corporations as they are a tremendous way for the private sector to be directly involved in the welfare of the communities and environments they operate in. It is also well understood that the underlying driver of a truly successful social welfare sector is the energy and dedication of individuals and organizations who volunteer their time and resources. As many corporations have already realized, much of their success is due to the communities and people they impact on a daily basis. This realization—that social welfare is more of an investment in one’s own business rather than an external form of charity— has been the primary driver globally for the growth of corporate social responsibility and volunteerism initiatives in the private sector. Another significant benefit that can be driven by the private sector is the transfer of ‘best practices’ to social welfare organizations. Corporations are well positioned to leverage the methodologies and strategies they have developed for their own business activities for use in this sector. In teaching business ‘best practices’ to social welfare organizations, the private sector can encourage and facilitate improvements across many areas of social welfare organizations, including their operations, current and future strategies, and approaches to financing. These improvements are likely to have a major impact on the organizations’ abilities to provide the necessary outcomes for those who need their services. Such initiatives will give Saudi Arabian business leaders the opportunity to recognize the importance of engaging in socially responsible activities, of which some will be related, and some not, to the primary businesses of their organizations. There is currently very little recognition of the potentially beneficial link corporate social responsibility can have with traditional core business activities. There’s a need to raise awareness of the competitive advantage philanthropy gives corporations, and then for private organizations and professionals to develop means to facilitate the donation of resources — in the form of time, pro bono services, or finance — for social welfare. The creation of these links will be as important as improved oversight and regulation.

Need for the private sector to develop human resource capabilities  

Training programs Training incentives

A significant driver of successful social welfare sectors around the world is the capability of its human capital. This resource is the underlying driver of initiatives across the sector, 7

ranging from state-run efforts, to those of NGOs, nonprofits, and social responsibility programs undertaken by corporations. Human resources comprises both adequately capable individuals and established capability development and training. Capability development programs must span all areas of social welfare—the public sector, NGOs, nonprofits, and corporations—to have a lasting impact on the sector’s human capital. There are numerous organizations around the world with programs focused on enhancing capabilities within the social welfare sector. Human resource development is a significant challenge in the social welfare sector. Saudi Arabia has always struggled with the lack of adequately trained individuals; in the 1960s and 1970s there was an absolute lack of people; from then to now there’s been a mismatch between the labour market and market requirements. In interviews with numerous NGOs and nonprofits around the Kingdom, the lack of qualified personnel and of robust training programs was among their greatest concerns. This is an issue that impacts all aspects of the sector, both social welfare organizations such as NGOs and nonprofits as well as the corporate responsibility personnel of corporations and other entities. It is reported that many local business leaders are eager to contribute towards social causes, but lack both the ability to uncover the business opportunities that lie within well-designed social responsibility programs as well as an understanding of how to launch and manage effective CSR programs. In Saudi Arabia, no company exists focused on providing the necessary training for CSR.

Conclusion The Kingdom must address the sector’s major challenges, including the need for government oversight, for greater private sector involvement and for capability development programs. It must also address the lack of established regulations and procedures, and the shortage of adequately trained personnel.. Solving these issues will require strong leadership, substantial investment, and cooperation between the public and private sectors. Collaborative efforts between key private and public sector stakeholders will help Saudi Arabia’s social welfare sector mature into a dynamic and highly valuable source of services that meets future demands and facilitates substantial contributions to the larger economy.

Social Welfare Sector Defined

A nation’s social welfare sector can be divided into two primary areas. The first is government services, aimed at providing general healthcare, housing and education-related services to citizens. The second covers specialized social services, which focus on individuals with specific needs born out of mental or physical conditions, particular life

circumstances or other events that leave them without the ability to provide adequately for themselves.

This report will focus primarily on specialized social services provided within the overall social welfare sector. It will also briefly cover housing and educational services provided to those who could not otherwise obtain them. The sector will be defined in further detail below where it provides an assessment of the public and private sectors of social welfare.

Saudi Arabia’s social welfare efforts must be measured against its citizens’ Islamic beliefs which emphasize the importance of charity and caring for individuals in need. Annual charity payments, called zakat, are payable by all able Muslims and the notion of charity is instilled in Muslims from a very young age. The Qur’an states: “Take a portion of their wealth as charity, so that you may cleanse and purify them thereby; and pray for them: for your prayers are a source of comfort for them. God hears all and knows all.”1 Charity, in other words, is a purifying duty for the donor, and a right of the recipient.

The religious significance of charitable giving emphasizes the importance of a robust social welfare sector to Saudi Society. Indeed, in a 2007 study of corporate social responsibility (CSR) programs in Saudi Arabia , Saudi business leaders cited charity as the main impetus for engaging in CSR activities as “part of our Islamic values and culture”. As the study notes, business leaders frequently link corporate responsibility with “a sense of duty stemming from beliefs, culture, Islamic values and a moral sense of responsibility.” 2 However, in the recent past zakat has only too frequently been used for a narrow range of services, such as producing Qurans, building mosques and handing out charity. It would instructive to see zakat used for wider purposes, such as education, business mentoring and human resource development.

The existence and strength of a social welfare sector ensures that cultural and religious expectations are met. As the 2007 CSR study found, most Saudi business leaders who participate in social welfare are primarily motivated by development needs and personal values rather than business-related drivers such as impacting consumer perceptions. Business leaders have compelling moral and religious obligations; but they are likely to see a more stable society through an efficient social support system.

The need for a robust social welfare sector can be linked to the founding principles of the Kingdom of Saudi Arabia. Article 14 of the Constitution states that “All God's bestowed 1

Holy Qur’an (Sura 9:103) Saudi Companies & Social Responsibility, Tamkeen Development and Management Consulting, February 2007

wealth, be it under the ground, on the surface or in national territorial waters, in the land or maritime domains under the state's control, are the property of the state as defined by law . The law defines means of exploiting, protecting, and developing such wealth in the interests of the state, its security and economy.”3 With the world’s largest petroleum reserves, the Kingdom certainly has been bestowed with great wealth. It is this wealth that belongs, by law, to the state and government - and by extension, to the people. As such, Saudi citizens can share a sense of national pride in the success of a strong social welfare sector; it is, after all, fulfilling a founding principle of the Kingdom that the wealth gained from the nation’s natural resources should be used for the interests of the state.

The domestic perception of social welfare is linked to national pride; this is especially true in the Islamic context of Saudi Arabia. But a robust social welfare sector also helps promote a positive international image of the country. Countries with healthy social support systems are perceived as not only concerned for the wellbeing of citizens, but interested in using their wealth for long-term development. This positive perception can act as a catalyst for increased foreign direct investment (FDI) and support for the sector as well as increased global respect. It is regrettably a truism the West understands little about the nature of Muslim charitable giving.

Saudi Arabia – Constitution, International Constitutional Law, March 1992 10

With an internationally recognized social welfare sector, FDI in social welfare and other sectors is likely to follow. Once a country signals that it has made a genuine commitment to improving social welfare, it is likely to garner the attention and support of international organizations such as the World Bank, the United Nations and United States Agency for International Development (USAID). Egypt serves as a good example, as the country has been striving to improve the quality and enrolment figures of its primary education system since the 1970s. Initially, USAID was the only organization to offer any form of support. As the Egyptian Ministry of Education began to prove its commitment to education other agencies offered their support, including the Canada International Development Agency, and the United Nations Educational, Scientific, and Cultural Organization (UNESCO).4

It is important to acknowledge Saudi Arabiaâ&#x20AC;&#x2122;s opportunity to serve as a model for Islamic government, from which the international community could gain a better appreciation of the strong social aspects of Islam. As home of Islamâ&#x20AC;&#x2122;s two holiest sites, Saudi Arabia is often quoted as a model of Islamic values and culture. The Kingdom can demonstrate to the world the uniquely compassionate nature of Islam as it builds a strong social welfare sector in the Islamic tradition.

There are therefore many non-quantifiable benefits from a strong social welfare sector. The utility gained by direct beneficiaries has an impact on national well-being, and gives an indirect boost to economic competitiveness. The benefits of the social welfare sector are also enjoyed by those who do not directly receive its services. A favorable international perception can lead to increased funding and support for the social welfare sector, as well as an increased diplomatic respect. Saudi Arabia has a unique opportunity to combine its authoritative voice on Islamic values and culture with its commitment to a social welfare sector which incorporates the welfare elements intrinsic to Islamic government.

The Landscape of Social Welfare in Saudi Arabia

The social welfare sector in Saudi Arabia still lacks a body of research. As a result, much data on the sector is either unavailable or relates to earlier years. As discussed later in this report, the authors faced a fundamental challenge in obtaining an accurate understanding of the current state of the sector. As such, much of the data gathered for this report was obtained through primary interviews with people in the Kingdomâ&#x20AC;&#x2122;s social welfare sector. 4

CIDA Egypt website; UNESCO website; USAID website 11

These interviews were essential to assess the sector’s current status and to pinpoint areas for reform. However, this research is far from exhaustive. The National Competitiveness Council (NCC) has identified data collection and monitoring as an area for vital reform.

History of social welfare Social welfare in Saudi Arabia has seen considerable development since the birth of the Saudi Kingdom during the mid twentieth century. The sector’s strong connection to Islam, the government’s early espousal of social welfare, the rapid growth of non-governmental organizations (NGOs) and nonprofits and the crucial role of women have all had a significant impact on its growth. That said, the sector now faces some fundamental challenges with regard to organization and regulation, and how services are delivered. The Role of Islam Charity and philanthropy are central to Islam. Zakat, one of the five pillars of Islam, requires an annual donation of 2.5% of one’s liquid assets - cash, gold and silver, and commercial items. to charity. Through scripture in the Holy Qur’an, hadiths5 and the historical narrative of Muslim scholars, aid for the under-privileged is not only required but highly valued and respected. Islam clearly states that it is every Muslim’s duty to share their resources and care for those in need. While zakat is the only form of charity that is obligatory, Islamic teachings also discuss other forms of voluntary charity. Sadaqah, or alms, encompasses any form of additional charity that is voluntarily given to those in need, while waqf, a form of permanent endowment, covers large amounts of charity usually set aside for the creation and maintenance of large establishments, such as mosques or schools, or fountains, daily meals, libraries and many other services. As Islam provides the basis for the Saudi Arabia’s constitutional framework and governs all aspects of everyday life, a strong sense of community and charitable giving is embedded in Saudi Arabian mindset. In the public sector are the Department of Zakat & Income Tax, that collects the annual zakat, and the Ministry of Social Affairs (MoSA); in the private sector are numerous local charities and NGOs focused on both aiding those in need and enacting social reform and many social welfare projects6 supported by the royal family.

Writings and teachings by Islamic authors and philosophers of the sayings and deeds of the Prophet Muhammad (PBUH) 6 “Kingdom Foundation Chaired by Prince Alwaleed donates a further $125,000 to Muslim Leaders of Tomorrow”, http://www.arabianbusiness.com, May 29, 2008; “The Prince Sultan ibn Abdul Aziz Al Saud Charitable Foundation ‘Has Helped People to Help Themselves’”, http://www.ainalyaqeen.com, February, 17 1999; “ABTF chaired by Prince Alwaleed donates $1million to Right to Live Society, Gaza”, http://www.arabianbusiness.com, November 24, 2008 12

The Ministry of Labor & Social Affairs Social welfare in Saudi Arabia was originally governed by the Ministry of Labor & Social Affairs (MoLSA). Established by Royal Decree in 1960, MoLSA was formed to spearhead the country’s social and labor policies and to implement social welfare programs and initiatives. Within the social welfare context, MoLSA focused its initiatives in the areas of education, community development, destitute individuals, and women as detailed below: Focus Area

Description

Education

• Provision of early education services and oversight of social development centers • Initiatives were carried out through training centers and institutes

Community Development

• In cooperation with other ministries, initiatives targeted enhancing the community and encouraging the pursuit of private development projects

Destitute Individuals

• Oversight of programs and institutions for orphans and individuals with special needs • Provision of rehabilitation, care, and shelter for physically/mentally disabled individuals • Social security in the form of pensions social assistance to disabled and partially disabled individuals, respectively

Women’s Services

• Promotion of women’s welfare associations through activities such as workshops

Despite the Ministry’s many successes in social welfare, two primary factors led to the creation of a separate ministry to handle labor and social welfare sectors. First, considerable economic growth driven by the oil boom of the 1970s resulted in a significant population increase in the Kingdom, and the Ministry’s focus became primarily labor-related. Secondly, Saudi Arabia witnessed a decline in public social welfare funding towards the end of the twentieth century due primarily to budgetary pressure. As a result, the Ministry of Social Affairs (MoSA) was formed in 2004 as an offshoot of the Ministry of Labor and Social Affairs with responsibility for the country’s social insurance, care and development. In accordance with the teachings of Islam, MoSA was charged with ensuring that the country’s less fortunate citizens were cared for in an adequate and respectful manner. The Ministry has divided its operations between two deputy ministries, as follows:

Division

Service

Description 13

Deputy Ministry of Social Developmen t and Welfare

Rehabilitation

• Rehabilitation services in the form of material, educational, and training support

Social Welfare and Guidance

• Development of plans and policies for the betterment and welfare for the Kingdom’s most needy individuals

National Societies and Institutions

• Promotes the establishment of local charity institutions • Responsible for registering and reviewing the establishment of charitable organizations • Supports charities through its two sub-departments, the Departments of Charity Institutions and of Cooperative Societies

Deputy Ministry for Social Security and Public Housing

Subsidies

• Receives, reviews, and examines social subsidy applications and grant subsidies for needy families

Social Security

• Responsible for ensuring a peaceful society through the study of social problems, coordination with government and private agencies, and necessary reform

Programs and Activities

• Development and monitoring of programs and activities implemented throughout the Deputy Ministry

Productive Projects

• Aims to assist social security beneficiaries in pursuing self-sufficient earnings • Initiatives target family and small business enterprises

Complementary Programs

• Initiatives aim to reduce the current economic divide

Support Programs

• Primarily responsible for pensions and spending allowances • Also initiated several peripheral programs, including the home furnishing and the school bags and dress programs

Training and Recruitment

• Organizes training and recruitment initiatives in collaboration with the government and private sectors

The MoSA obtains a significant proportion of its budget from the state, growing from just under SR 5billion ($1.33bn) in 2002 to just over SR 10billion ($2.66bn) in 2007. The Ministry’s social security program constitutes a majority of its spending, having reached SR 14

10billion in 2008. That said, it is estimated that the Ministry derives most of its funding from zakat payments.

USD MM

State Budget Appropriation for the Ministry of Social Affairs, 2005 â&#x20AC;&#x201C; 2007

2005

2006

2007

Source: Ministry of Social Affairs

In addition to the many social welfare initiatives driven by MoSA itself, the Ministry is also responsible for regulation and oversight of all social welfare organizations (e.g. NGOs, nonprofits) operating in Saudi Arabia. Each of these organizations is required to register with the Ministry prior to establishment in the Kingdom. MoSA provides support programs in the areas of finance, technology, guidance, and training. These programs assist charitable organizations in foundation, construction, technical, and emergency support, annual expenditures, land acquisition, and managerial and accounting matters. The Ministry heads these services through its headquarters in Riyadh and satellite offices in Makkah, Asir, Qasim, the Eastern Region, Haâ&#x20AC;&#x2122;il and Medina.

The Emergence of NGOs and Nonprofits In Saudi Arabia, NGOs and other charitable organizations have become significant agents of social reform. Since their inception as benevolent societies during the 1930s, they have served as the primary link between the government and the people on social welfare matters. The number of NGOs and nonprofits in the Kingdom grew significantly during the latter half of the twentieth century, from just 15 in 1975 to around 200 in 2000. Between 2000 and 2007, however, the sector developed even more considerably, doubling to around 425.7

Programs, Activities and Achievements of Charity Societies in Saudi Arabia 15

During the 1980s, the Ministry’s focus on the labor market and then new financial constraints resulted in a slight easing of oversight of the social welfare sector. Despite these additional freedoms, the government continued to retain tight control over charities. Direct contact with international organizations was prohibited unless facilitated by the Ministry. Not until 2000, for instance, was the United Nations Development Program (UNDP) able to bypass the Ministry and directly approach NGOs in the Kingdom. Then, following 9/11 the government further tightened its control over the sector in response to the fact that certain local charities had been involved in funding terrorism and al-Qaidah.8 As a result, specific charities, such as Al-Haramain, were forced to cease operations and others were banned from sending funds outside the Kingdom and fundraising in mosques and other public places.9 Number of Charitable Societies in Saudi Arabia over 1975 – 2007 500

425

400 300 199

200 87

100 15

105

230

243

276

138

0 1975 1980 1985 1990 1995 2000 2001 2002 2003 2007

NGOs and nonprofits spent almost SR8.6bn ($2.3bn) between 1982 and 2001, of which government subsidies constituted just 11.7%.10 Most NGOs in Saudi Arabia do not rely on 8

“Curbs Cut Into WAMY Donations,” Arab News, January 2004 BBC news; CNN news; Counter Terrorism Blog 10 8th Development Plan, Ministry of Economy and Planning, 2005 -2010 9

government funding collected through zakat as a primary means for funding, but obtain their funds from other sources, including sadaqah or waqf. It is important to note that waqf falls under the jurisdiction of the Ministry of Waqf & Religious Affairs. Thus, there is significantly more regulation surrounding its use and many charities veer away from using it.

That said, the government has provided a consistent level of funding to charitable organizations in the Kingdom. Between 1980 and 2003, the government has increased its annual charitable assistance by a cumulative growth rate of 5%. Annual Assistance by Government to Charity Societies in Saudi Arabia, 1980 â&#x20AC;&#x201C; 2003

SR MM

+5%

1980

1985

1990

1995

2000

2001

2002

2003

Source: 2007 Statistical Year Bookâ&#x20AC;&#x2122; of Saudi Arabia

The Role of Women in Social Welfare The role of women in Saudi Arabia has been undermined as a result of tribal and cultural traditions rather than Islamic teachings. The social welfare sector, however, has provided a key arena for womenâ&#x20AC;&#x2122;s empowerment and has acted as a means of raising their status in local society. Much of the sector is led by women as they have always actively engaged in 17

charitable organizations and are major players in the social services. Participation in the social welfare sector has been used as a springboard for consolidating a civil and social role for women. The rise of women in the NGO movement has led to them taking a central role in local government, through the municipal elections and Chamber of Commerce & Industry elections in Jeddah, the Eastern Province and Riyadh. Women also now act as advisors to the shura11 and the first woman minister has been appointed to the Council of Ministers. Many of the charities spearheaded by women have highlighted culturally sensitive issues such as poverty, domestic violence, child abuse, physical and mental disability, and cousin marriage. The NGO and nonprofit arena has played a key role in supplementing welfare initiatives sponsored by MoSA, and in addressing these traditionally neglected issues. It is important to highlight that NGOs and nonprofits run by women are often better managed than the organizations of their male counterparts. An academic involved in social welfare issues commented that NGOs run by women can often be better run and more “scientific and systematic and have a deeper understanding of sustainable development” than those run by men. Many NGOs run by men rely on the objectives of the specific charity and do not sufficiently address the principles of the private sector or world wide experience in managing major NGOs.12 While there has been some progress in urban centers, many women in Saudi NGOs admit that they have hardly scratched the surface of the Kingdom’s vast rural areas. Poverty, unemployment, social strife and healthcare have only recently begun to be addressed and progress has been slow. Given the lack of data, charitable organizations are ill-equipped effectively to target and enter rural areas. In spite of this, there are some women-led NGOs that stand out for the work they have achieved in rural communities: Region

Activity

Qassim

A woman’s NGO has been extremely active in domestic issues, such as family and children counseling and development NGO has been working on developing community values and identity A recently established NGO is starting to focus on women’s issues The launch of new program for development of NGOs being spearheaded by the Governor of Ha’il The Ajaa welfare Society for Social Services in the north of Ha’il provides numerous services, including providing care for women prisoners and orphaned children and kindergarten, handicraft, rural and credit development programs The Makkah Society for Development and Social Services is the only NGO providing services for the entire Western Region province of Saudi Arabia

Onaizah Abha Ha’il

Makkah

In Islam, the principle of shura is defined as the debate, discussion and recommendation regarding pertinent issues by religious scholars and experts in the community 12 Interview, 2005 18

Source: Interviews with heads of organizations, 2002 In recent decades, there has been a shift in the number and focus of NGOs launched by women in Saudi Arabia. As women have become better educated, either through home schooling or at educational institutions in the west, they have begun to develop charitable organizations with a more specialized focus, aimed at particular medical or social issues. Many of these NGOs are “firsts” in their field. With respect to endogamy, for example, NGOs have successfully pushed for reforms requiring couples to take blood tests before marriage. While the test itself is not comprehensive enough to cover the full spectrum of possible genetic irregularities, it is a step in the right direction. The following examples represent the breadth and extent of specialized NGOs: Region

Activity

Jeddah Riyadh

The first NGO to provide first aid counseling The first and only NGO focusing on children’s cancer care and support

Riyadh Najd

Established the first family counseling / family therapy unit Established the first microcredit financing program targeted at rural areas Soon to be established NGO is planning to launch and support microcredit financing in and around Makkah NGO supporting women’s needs Though a long-standing charity in Saudi Arabia, AlFaisaliyyah recently established the country’s first center for autistic children

Makkah Ha’il Jeddah

Source: Interviews with heads of organizations, 2002 While the development of more specialized NGOs has been beneficial, growth has been hindered both by the lack of comprehensive data, and a lack of trained personnel. The AlNahdah Down’s Syndrome School, for instance, was forced to cease providing services because they lacked adequately trained teachers and personnel. Other NGOs have held back on publicizing their services to avoid overwhelming their support staff. As a result, both the training and continuous development of qualified individuals is an important priority. 13 The role played by women in the social welfare sector has played a significant role in its overall development. The sector, however, still faces a number of issues that hinder growth. The next section will examine the current state of the social welfare sector in the Kingdom in more detail.

Interviews, 2005 and 2008 19

Current state of social welfare The population explosion in Saudi Arabia over the past three decades has led to marked increases in poverty and unemployment. According to a recent study, unemployment in 2007 was as high as 11.1% though unofficial sources suggest it may be higher. Societal customs continue to permit marriage between cousins, resulting in a very high number of children born with congenital disorders. Low infant mortality rates and the high number of inhabitants per household, which only dropped below six in 2004 and is expected to decline by only 0.5% through 2020, have increased the problems.14 With recent estimates placing more than 57% of the population under the age of 25, the Generation Y of Saudi Arabia is entering a world with certain lifestyle and spending expectations that may not match the reality of a shrinking job market and saudization levels that have not absorbed the existing annual half million graduates seeking employment.15,16

Tackling the country’s social problems, however, is not a clear cut issue. In 2002, a social welfare conference was hosted by the King Khalid Foundation17 in Riyadh to discuss the shortcomings of the Kingdom’s social welfare system. The conference dealt primarily with issues relating to urban and rural poverty and prompted King Abdullah bin Abdul Aziz Al Saud, then Crown Prince, to tour Shumaisi and Manfuhah, two of the poorest districts in Riyadh, in 2003. His experience led the Crown Prince to call on the country’s wealthy to donate to social welfare causes. He also commissioned a report to assess poverty across the country.18

Saudi Arabia Centers, 2004; National Commercial Bank of Saudi Arabia; NCC analysis Datamonitor 16 Generation Y refers to all individuals who were born between 1978 and 1995 and were raised during the 1990s and 2000s; this group is also commonly referred to as the “millennials” or “net generation”. 17 The King Khalid Foundation is a charitable organization founded by the family of the late King Khalid that focuses on education, social improvement, emergency services, scholarship, research and publication projects 18 Expert interview, 2008 15

The Eighth Five Year Plan (2005-2010) outlines Saudi Arabia’s short-term vision, the country’s objectives to create “a diversified and prosperous economy that ensures the supply of rewarding job opportunities and economic welfare to all citizens, provides good quality education and healthcare to the population and helps manpower acquire the necessary skills, while maintaining the Kingdom’s Islamic values and cultural heritage.” In order to achieve this vision, quality of life in all its aspects must be taken into consideration, including job creation, education, gender equality and health and social services. All of these elements fall into the scope of social welfare. Accordingly, charities have taken on a new-found importance over the past decade as the country aims to improve the local social environment. In addition to expanding upon services provided by the MoSA, the government has called on the country’s charitable organizations to become service providers in housing, healthcare and education. This section explores the current state of the Ministry of Social Affairs, NGOs and nonprofits and discusses the dynamics of the role of women in the NGOs.

The Ministry of Social Affairs (MoSA) MoSA has seen a considerable expansion over the past decade. In order to provide an adequate range of services to the general population, the Ministry has been divided into two major service arms. The first covers general government social services, such as education, healthcare and housing. These services are need-driven and available to the entire population. The second arm provides services for groups with special needs. These services are only available to special needs groups and are provided mainly through particular institutions and centers. General services provided by MoSA are mostly non-institutionalized and cover a wide range of areas. The most prominent include the Ministry’s foster family program, in-family assistance program, disabled assistance program and pension program. The largest of all these is the pension program, which provides social security pensions to the disabled, orphans, women without supporters, families of prisoners and victims of natural disasters among others. The pension program has seen steady growth within the Ministry, increasing its cash outflows at a rate of 1.7% (compound) from SR 2,514 million ($671m) to SR 2,985 million ($797m) between 1993 and 2003, while its financial assistance has recorded the most significant growth, increasing by 4.5% over the same time period. In 2002, noninstitutionalized welfare programs are said to have benefited just over 90,000 individuals.19 Through its many welfare and developmental institutions, the Ministry provides special needs services in six primary areas. A detailed breakdown of these services is as follows:

19 th

8 Development Plan, Ministry of Economy and Planning, 2005-2010 21

Special Special Needs Needs



Nursing Nursing

 

Elderly Elderly Care Care



Social Social Guidance Guidance

  



Community Community Development Development 

Services provided to the disabled and the paralyzed through 29 rehabilitation centers, the beneficiaries of which totaled 8,062 persons1 Four social nursery homes provide care for orphan children – which have already benefited over 1,900 children 12 social education homes provide services to both males and females Two model social education institutions 10 homes for the care of the elderly – which have already served over 650 individuals Five social guidance homes providing care to juveniles 12 social observation homes for juveniles Three juveniles’ institutions for girls The above institutions have already benefited over 13,600 individuals Local community development services provided by: – Seven social service centers in major cities – 18 development centers – 95 development committees in villages The above centers have already benefited over 121,600 individuals

Source: 1Figures from the 8th development plan by the Ministry of Economy and Planning. Figures have not been updated and are as of 2002

** caps for Devt PLan

In total, through its more specialized and its more general offerings, the Ministry is said to have had a direct impact on close to 240,000 individuals in 2002.

The shifting dynamics of NGOs and Nonprofits The number of NGOs and nonprofits working in the social welfare sector in Saudi Arabia has seen tremendous growth over the past decade. Between 2001 and 2008, the sector almost doubled in size, growing from 226 to 450 organizations.20 These services span six primary areas: education, training and rehabilitation, child care, healthcare, disabled and elderly care and housing. While more recent data is not available, the services of NGOs and nonprofits are said to have impacted close to 1.2 million individuals by 2002, almost five times greater than the Ministry’s beneficiaries.

Ministry of Economy and Planning 22

Breakdown of Beneficiaries of NGO Programs, 2001 Beneficiaries of Social Welfare Programs vs. NGOs, 2001-2002

# of People

25,000

50,000

75,000

1,000,000

# of People

Education, Training, and Rehabilitation Programs Child Care Programs

Social Welfare Programs

Healthcare Programs

984,117

Elderly and Disabled Care Programs

NGOs

Charity Housing and Housing Improvement Programs

Note: Social Welfare Programs reflect 2002 data while NGOs refl ect 2001 data Source: NEED SOURCE

Source: NEED SOURCE

The services provided by charitable organizations have mainly centered on general assistance, healthcare, and handicapped/aged support. Between 1975 and 2007 charitable organizations increased their expenditures by a cumulative growth rate of 19%, reaching just under SR1.3bn ($346.7m) in 2007. Of that figure, just over 70%, or SR 919 million ($245m), was spent on general assistance. Expenditures By Charity Societies, Saudi Arabia, 1975 â&#x20AC;&#x201C; 2007

Breakdown by Programs and Activities, 2007 (SR MM) 0

1,500

General Assistance

1,350

100

150

950 919

Healthcare

1,200

Handicapped and Aged Care

1,050 +19%

SR MM

900

Other

750

Construction and Home Improvement

600

Education, Rehab, and Training

450

Childcare

300

Public Utilities Care

150

General Knowledge 1975 1980 1985 1990 1995 2000 2001 2002 2003 2007

Source: Programs, Activities and Achievements of Charity Societies in Saudi Arabia, King Fahad National Library; 2007 Statistical Year Book, Central Department of Statistics and Information, Saudi Arabia; IMF, Oanda

Most of the large social welfare NGOs and nonprofits in Saudi Arabia have become essential components of the governmentâ&#x20AC;&#x2122;s social welfare program. They were specifically asked by the Kingdom in its Seventh Five Year Plan (2000-2005) to focus on social issues such as housing, healthcare, education and disability.21 As a result, many organizations have greatly expanded their services over the past decade. While it is fair to say that the government has become dependent on them they have, in turn, benefited tremendously from the support of the royal family. 21

Ministry of Economy and Planning 23

The support of the royal family comes in many forms and has often been a basic element in helping NGOs and nonprofits overcome the multiple layers of bureaucracy that inhibit social welfare organizations. A member of the royal family, for example, was able to help a women’s charity bring in foreign trainers despite the government’s reluctance to grant them access into the country. While this form of support has proved successful on numerous occasions, it is not a guarantee. Sanad, a family cancer charity, was forced to wait nearly five years for its registration to go through with the MoSA despite royal affiliation. The Mothers of Riyadh, a charity focused on family violence and supported by members of the royal family, had to register as a branch of the Handicapped Children’s Association before it was officially recognized by the Ministry. For instance, in 2005, the women’s branch of Al-Eman, a cancer charity, found itself without a legitimate foundation or any viable long-term plans. The organization had only been able to get as far as it did because of the patronage of a senior doyenne in the NGO and nonprofit community. 22 NGOs and nonprofits have been at the center of the social welfare sector since the country’s foundation. They began as small, local benevolent societies and many transformed into large charitable organizations. It is no surprise then, that some of Saudi Arabia’s oldest charities, such as Al-Nahda in Riyadh or Al-Jamiat Al-Khairiyyah and Al-Jamiat Al-Birr in Jeddah, were established early on to take care of the Kingdom’s poor and destitute and have since expanded to include specialized centers for orphans and disabled children. One of the best examples of this transformation is the Najd-based King Abdul Aziz Women’s Charity Society. The society was started and is still led by local women from Buraida and operates with the support of the local governor’s wife. Over the past 25 years, the charity has widened its portfolio of services to include microcredit financing, new parent training, family counseling, family dispute and conflict resolution, hereditary disease and pre-marital blood test screening, mental health support, training for parents of handicapped children, environmental impact studies, housing and legal support for victims of family violence and child abuse, family arbitration, endogamy and drug use prevention. These services are all in addition to the traditional social welfare services the charity initially provided during the 1980s, such as community outreach to the villages surrounding Buraida.23 As the social welfare sector continues to transform and develop, organizations are now starting to integrate sustainable development into their vision and methodologies NGOs and nonprofits are trying to understand better how to increase and sustain their impact in Saudi Arabia.

The Continuing Importance of Women in Social Welfare

Interviews, 2005 Interviews, 2005

While women have certainly played a significant role in the advancement of social welfare services in Saudi Arabia, the sector itself has played an even greater role in the advancement of women’s rights across the country and in the regions. The women of Saudi Arabia have made significant inroads in the social welfare space within the backdrop of Islam and through reference to cultural and social customs dating back to the early Medinan24 period of Islam. In a spring 2007 conference entitled “The Reality of Women’s Participation in National Development,” the issues of women’s empowerment and their critical role on the national scene were highlighted. Backed by Princess Adelah bint Abdullah bin Abdul Aziz and sponsored by the Khadija bint Khuwailid Center for Businesswomen, part of the Jeddah Chamber of Commerce, the conference stressed the need for the empowerment of women, emphasizing the critical role both men and women will play in the country’s development. “Even though we’re stepping forward, many countries who were once behind us are ahead of us now. It’s time that we stopped talking and started working to educate and train our Saudi sisters and daughters while preserving our Islamic identity.” - Lubna Al-Olayan, at the conference organized by Khadija bint Khuwailid Center for Business Women, March 2007

CASE STUDY Khadija bint Khuwailid Center for Business Women Affiliated to the Jeddah Chamber of Commerce & Industry and occupying the same building, the center was founded in 1998 to train, qualify and empower Saudi women. The center works to provide women with specialized services through various sub-committees. These include, but are not limited to: • Outreach programs • Education initiatives • Training programs • Awareness projects • New job opportunities • General advice • International and domestic networking • Exchange and transfer of knowledge The Center aims to act as the primary conduit between the Chamber of Commerce and both established and up-and-coming Saudi businesswomen. In supporting and encouraging 24

Refers to the first Islamic state in Medinah in the seventh century AD, now part of modern Saudi Arabia when women had greater freedoms than today 25

dialogue between Saudi women, themselves and the local business environment, the Center hopes to enable greater participation by women in the economic growth and development of Jeddah. The conference used the 2005 nine-point plan, approved by the Council of Ministers—the highest government body in Saudi Arabia— which focuses on women’s development as a foundation to communicate its message. With over 120,000 Saudi girls completing secondary education and nearly 45,000 graduating from university each year, educated women constitute a significant percentage of the population.25 Women already invest over SR 40bn in the local economy each year and have a total net worth in excess or SR140bn.26 While current estimates suggest only as little as 5-10% of university-educated women in the Kingdom are employed, this is most likely a significant understatement as many women who are employed are not given official employment status.27

The sizeable increase in the number of women graduates, not to mention the considerable amount of wealth and equity they hold, has been one of the biggest drivers for women’s rights reform. As a clear desire has developed, both from the public and private sectors, to bring women to the forefront of the economy, the government has taken numerous steps to promote women’s rights. For example, the government has already acted to ensure women can participate in many sectors of work, to develop training programs to prepare women for work in the private sector, and to allocate land for all-woman industrial zones in the Kingdom.28 The significance of all this, however, lies entirely in the promotion of women’s rights as one of the most important areas within the social welfare sector.

“Saudi Arabia: Forum on the Role of Women Suggests that Empowerment is the Key to Future Economic Prosperity,” Women Living Under Muslim Laws, April 2007 26 “Banking on Women,” Springwise.com, July 2006 27 “The Reality of Women’s Participation in National Development Seminar,” Khadija bint Khuwailid Center for Business Women, March 2007 28 Ministry of Labor 26

The emergence of associations within the social welfare sector focused on developing women’s rights further trained the public spotlight on securing equal rights for women . Organizations like the National Dialogue, the Saudi Association of Human Rights and the Saudi Journalists Association have served as catalysts for debate on the position of women. The National Dialogue, for example, has held numerous events across the country that consist of a healthy mix of groups and individuals, including men and women and Sunnis and Shī‘as29. These events have tackled social concerns, women, youth, human rights and, uniquely, a dialogue with the west entitled “Respecting the Other”. While women in general have been enthusiastic and excited about these events, they have been disappointed with the lack of any lasting impact. The National Human Rights Association (NHRA), however, was established in 2004 to provide non-governmental oversight for the country’s expanding labor market. The NHRA is seen as a significant step in the right direction given its 41-member team and strong collaboration with international human rights organizations. It is headquartered in Riyadh, with satellite offices in Jeddah and Dammam, and has established a special panel to monitor violations of women’s rights. The social welfare sector is at a turning point in its development in Saudi Arabia. As women continue to work for proper recognition of their rights, their prominence will become ever more important in the social welfare arena. As the woman’s movement grows, its impact on the social welfare sector will be tremendous. At a time when NGOs and nonprofits are already transforming their service offering to target a wider range of social ills, women’s empowerment is bound to play a more central role.

The Current Role of the Public Sector Article 27 of Chapter 5 of the Saudi Arabia’s Constitution explicitly recognizes the responsibility of the state to provide for its citizens during times of crisis or need. As the Constitution dictates, “The state guarantees the rights of the citizen and his family in cases of emergency, illness and disability, and in old age; it supports the system of social security and encourages institutions and individuals to contribute in acts of charity.”30 The social welfare sector in Saudi Arabia has evolved over time, and now many ministries have a role in upholding Article 27. Several of these organizations are described in the following.

Sunni and Shī‘a represent the two major denominations of Islam. Approximately 85% of the world’s Muslims are Sunni and the remaining 15% are Shī‘ah 30 Saudi Arabia – Constitution, www.servat.unibe.ch, October 1993 What is that website?Isn’t there a more authoritative one? 27

Diwan Al Malaki (Kingâ&#x20AC;&#x2122;s Court): The King appoints directors and sets the direction of each ministry; the King makes the final executive decisions. Majlis al-Shura (Consultative Council): an all-male group of private citizens selected by the King to give advice and direction regarding public issues. The Shura votes on issues passed by ministries. Ministry of Interior: led by the Prince Naif, this is one of the strongest ministries in the kingdom. The Ministry of Interior recognizes the need and obligation to care for peopleâ&#x20AC;&#x2122;s security and oversees all other ministries and organizations to ensure they comply with the constitution and the Kingâ&#x20AC;&#x2122;s objectives. Ministry of Social Affairs (MoSA): this is the most important ministry for social welfare services and had a SR12 billion ($3.2bn) budget in 2007. Ministry of Islamic Affairs: a powerful and conservative ministry, ensuring Islamic law and rulings are upheld. It spends zakat and sadaqa payments in accordance with Shariah law. Ministry of Health (MoH): provides free healthcare in public hospitals to all Saudis and emergency care to all people in Saudi Arabia. While the MoH has a vast budget, expatriate workers in the Kingdom are required to have private health insurance to lessen the burden on public hospitals and clinics. The ministry is moving towards more preventative care with public awareness campaigns and support for advocacy groups. Ministry of Education: In the last few years the King has demanded changes in the administration of education. An example of this change is that the Ministry has recently taken over female education after the fire in the Makkah girls school. Education is free to every

Saudi in public schools, but individual public schools have no budget of their own. Their budget is decided by the Ministry and teachers are assigned by the Ministry. General Organization for Social Insurance (GOSI): established by Royal Decree under the Social Insurance Law in ??, GOSI is responsible for implementing social insurance rules and regulations in the Kingdom. GOSIâ&#x20AC;&#x2122;s primary responsibility is to collect contributions from employers and distribute benefits to former employees and/or their families after termination of employment. GOSI also runs scholarship programs, hosts training courses, administers support programs, and provides medical and disability insurance. In 2006 alone, GOSI administered just under SR5 bn ($1.3bn) in services to some 3.5 million individuals. General Housing Authority: GHA provides housing for low-income citizens. Local Municipalities: Within Jeddah, Dammam, and Riyadh, the local municipalities have a relatively strong presence.

The Current Role of the Private Sector The Kingdom has a robust private sector that focuses exclusively on financing and providing valuable social welfare services. This private sector often meets the needs of the people where the state cannot do so efficiently or effectively. As Saudi Arabiaâ&#x20AC;&#x2122;s population continues to grow at nearly 2% per year and its demographics shift towards an older, retired population, the private sector will become more significant in providing basic and necessary provisions including housing, education, and health services.31 The private organizations serving Saudi Arabiaâ&#x20AC;&#x2122;s social welfare sector are comprised of many different bodies, described in further detail below.

CIA World Factbook 29

Charitable societies and foundations are typically defined as entities organized and operated for purposes that are beneficial to the public interest, as opposed to commercial gains. Charitable societies both engage in providing products and services themselves, as well as offering financial and logistical support to other organizations that act as direct providers. Charitable Societies With the foundation of MoSA, social awareness campaigns were launched to encourage a national volunteer movement. As a result, charitable societies began to form focused on serving as a conduit to channel funds from the wealthy. Ultimately, several of these organizations developed programs to deliver specific services directly to segments of the population that had particular needs, including the physically and mentally handicapped. Most charitable societies have a membership base that provides funding through recurring membership fees and donations. Charities also receive between 5-10% of their annual budget from MoSA. Depending on the charityâ&#x20AC;&#x2122;s focus, it may also be able to register with various ministries (e.g., Ministry of Education or the Ministry of Health) and receive additional funds or in-kind support. For example, charities that exist at the local level, such as neighborhood co-operatives or community development organizations, can often receive up to 50% of their funding from MoSA and other ministries with which they have registered. Typically, the vast majority of a charitable societyâ&#x20AC;&#x2122;s funds are received from private donations, zakat payments, and additional fundraising activities pursued by the organization itself. Foundations Charitable foundations are required to register with MoSA and must have a minimum base of 20 members. These organizations can perform direct fundraising and also receive nominal

funding from MoSA. Examples include the King Faisal Foundation, established in 1977, and the King Khalid Foundation, established in 2001. Individual foundations are typically established by individuals with high net worth and access to substantial sources of capital. These organizations cannot fundraise directly, and do not receive financial support from (or supervision by) MoSA. Individual foundations may not engage in fundraising campaigns, though they are allowed to receive donations. There are around nine individual foundations in Saudi Arabia today. 32 Saudi NGOs with an international presence, giving international aid either headquartered in Saudi Arabia or abroad A number of Saudi organizations used to have an international arm and give aid internationally. These are Saudi organizations looking out, not international NGOs looking in. A number of organizations based in Saudi Arabia provide funds for aid and development to other countries in the region but there is currently no formal registration or oversight process for these organizations. As a result it is difficult to identify the exact number of such organizations working in Saudi Arabia. The World Association of Muslim Youth reported that there are six such organizations and several interviewees spoke specifically of the Red Crescent and the Two Holy Shrines Foundation. These are well known organizations, but there may still be other low key organizations funding development abroad in Africa and Pakistan. However, due to their unregulated and unlicensed status, many of these organizations were severely scrutinized following 9/11, and many have since faced difficulty in receiving funding and pursuing their activities. These groups were at one time regulated under the Ministry of Islamic Affairs, but the government is now considering re-establishing a formal registration and licensing process for this type of charity..33 Royal Family The royal family of Saudi Arabia has around 6,000 members and an additional 30,000 relatives. Many members and relatives of the royal family are deeply involved in contributing to the development of the social welfare sector via funds, resources, access to networks, and other available means. Royal family members have founded or substantially funded organizations including the King Khalid Foundation, King Faisal Foundation, Prince Sultan City, and the Centennial Fund (a venture capital fund for low-income citizens who wish to start their own self-sustaining business).34 Family Foundations Family foundations are charities that are typically founded by well-connected, well-known, and wealthy families in the Kingdom. There are around 15 large family foundations in the 32

Foundation interviews, 2008 Local social welfare expert interviews, 2008 34 Local social welfare expert interviews, 2008 33

country, which include Abdul Latif Jameel, Alireza, Al-Babtain, Bin Ladin, Al-Fozan, AlGhosaibi, Al-Jeraisy, Juffali, Olayan, Al-Rajhi, Al-Rashed, Al-Sanea, Al-Subeaie, Al-Turki and Al-Zamil. Family foundations will typically sponsor or fund initiatives that are undertaken by other organizations or individuals operating at a local level or on issues particularly meaningful to one of the families.35 Corporate Social Responsibility “It is my wish for companies to start introducing CSR culture into the work environment, as well as launching programs to the best of both the country and its citizens. The kingdom of humanity needs to commit to social responsibility, a trait locally and globally recognized.” --The Deputy Prime Minister HRH Crown Prince Sultan Bin Abdul Aziz Al-Saud, Minister of Defense and Aviation and Inspector General for the Kingdom Corporate social responsibility (CSR) involves organizations considering the social wellbeing of the people and communities in which they do business. This can involve providing additional value to local communities through ordinary means of business, and / or organizations undertaking programs to benefit local communities in ways that are entirely unrelated to the organization’s ordinary means of business. Examples of the former type of CSR include Microsoft’s eSeniors program in Miami, which offers seniors free computer training and customized computers.36 Examples of the latter type of CSR include Goldman Sachs’ Community TeamWorks program, which partners employees of the global financial services firm with local non-profit and volunteer organizations.37 CSR programs have been growing steadily in the last 3-5 years in Saudi Arabia. In 2006, under the patronage of Prince Sultan Bin Abdul Aziz Al Saud, the nation’s first corporate social responsibility forum took place in Riyadh.38 Emaar, the company developing King Abullah Economic City (KAEC), recently held an orientation workshop for its senior leaders, including CEO Mr. Fahd Al-Rasheed, in preparation for setting a comprehensive CSR strategy to support environmental objectives outlined by KAEC.39 The Saudi Responsibility Competitiveness Index (RCI) will be launched in 2009 to “encourage and reward responsible leadership” among the nation’s private sector businesses and business leaders. The Saudi RCI initiative will allow for participating companies to receive “a confidential briefing on its performance against sector, national and global benchmarks” so that they can understand how to better engage their local communities and provide valuable social services, either through business operations or supplemental CSR programs.40

Interviews with heads of family foundations, 2008 “Microsoft, Miami Offer Seniors Free Computer Training, Customized PCs,” Microsoft, October 2007 37 Goldman Sachs Citizenship website 38 “Kingdom of Saudi Arabia to host the First Corporate Social Responsibility Forum next May in Riyadh,” ameinfo.com, May 2006 39 “Emaar E C hosts CSR Workshop for Senior Management Team,” MENAFN Press, September 2008 40 “Saudi RCI Snap Shot,” Saudi Arabian General Investment Authority, November 2008 36

One of the most active players in Saudi Arabia’s CSR is Abdul Latif Jameel, as discussed in the case study below. CASE STUDY Within Saudi Arabia’s growing CSR community, one company stands out. Abdul Latif Jameel—a conglomerate importer/exporter, financial services firm, and advertising business —pursues its CSR initiatives through its subsidiary, Abdul Latif Jameel (ALJ) Community Service Program (CSP). The Community Service Program has pursued various initiatives, including: a Food Force video game for poverty awareness amongst young people; funding micro-finance projects through its partnership with the Grameen Foundation; and supporting women in the workforce through its Productive Family Program. These initiatives span three core areas, as further detailed below: Area

Bab Rizq Zameel Program

Healthcare and Social Program

International Program

Description • Employment and training programs o Direct employment o Training and employment o Specialized vocational institutes • Self employment programs o Taxi/Truck Ownership o Small Businesses o Productive Household • Videos • SRCS Initiatives • Tanweer Orphan Program • Poverty initiatives o Grameen-Jameel Pan-Arab Microfinance Limited o Abdul Latif Jameel Poverty Action Lab o The Yunus Challenge • Islamic art initiatives o Jameel Gallery Scholars • Technology initiatives o ALJ Arab Technology Start Up Fund

A unique aspect of ALJ’s initiatives is that they do not necessarily provide charitable donations in the form of money or food. Rather, ALJ’s initiatives are focused on allowing impoverished individuals within the Saudi community to grow into active and contributing members of society; in this way, these individuals will benefit the communities in which they live through their own economic and social returns.

ALJ focuses on productivity, which can include promoting entrepreneurship or skilled labor, or providing women to help them develop a dual-income household. ALJ promotes entrepreneurship for example by providing logistical and financial support for small projects with growth potential. Through this initiative, ALJ aims to create 50,000 jobs by the end of 2011. Entrepreneurship and self-employment is an important factor that will lead to strong networks, local competition, job creation and reinvestment of wealth. ALJ also advocates, through its recent initiative collaboration with the Human Resources Development Fund (HRDF), to train and prepare local salesmen to enter the market via the private sector.41 ALJ’s initiatives reflect its determination to build an economically and socially balanced society. Individuals Islam dictates that all individuals must help those less fortunate through sadaqa. They take care of entire poor families or take care of orphans and other services. Awqaf is a religious endowment that typically takes the form of a building or a plot of land. Because of its consistently recurring benefits, awqaf donations are considered among the highest forms of charity in Islam.42 Cultural Missions Often in the shape of workshops and courses led by trained experts, cultural missions form an integral part of international and local interaction in social welfare. Examples include the British Council.

Social Welfare Organizations in Saudi Arabia Below is a list and brief descriptions of a few of the very many charitable organizations that operate in Saudi Arabia. It is important to note that, while each of these organizations lists a specific region or area of focus, many have been involuntarily confined to specific areas by the current regulatory environment. Traditional Charities The list below indicates NGOs that act more as “umbrella” organizations and provide a wide variety of social welfare services for the general public. Children missing education are taken in by charities like the King Abdul Aziz Society for Gifted Children. Here are some examples: Organization

Region

Al-Jamiyat al-Nisaiyah al-Khairiyyah Al-Jamiya al-Birr Al-Iman Welfare Society for Social Services

Jeddah Jeddah / Eastern Provice Jeddah

A Beacon of Corporate Social Responsibility: Abdul Latif Jameel Co., DinarStandard, May 2008 Social welfare expert interviews

Organization Region Makkah Society for Development and Social Jeddah Services Ajaa Welfare Society for Social Services Jeddah Al-Faisalyah Woman’s Welfare Society Jeddah Ha’il Welfare Society Jeddah Al-Wafaa Riyadh Al-Nahdah Charitable Society Riyadh King Abdul Aziz Women’s Charity Society Buraida Saihat Society for Social Affairs Saihat Qatif Charitable Society Qatif Al-Nafisah Center Jeddah Source: Interviews with heads of organizations, 2005 and 2003

Specialist Organizations These NGOs represent specialist organizations, focusing on one specific need within the social welfare sector. This is a few of them: Organization

Region

Description

Down’s Syndrome Charity Association (DSCA)

Riyadh

Sanad

Riyadh

Charity Center for Social Guidance and Family Consultations

Riyadh

Family therapy and support services

Gulf Women’s Association

Eastern Province

Pre-school learning and teacher education

Maharat Center

Jeddah

Pre-school learning difficulties

Al-Iman Cancer Society

Jeddah

Cancer support

Disabled Children Association

Jeddah

Support for children with physical disabilities

Down’s syndrome rehabilitation, education and family support Support for families with children afflicted with cancer

Jeddah Institute for Speech Jeddah Support for the deaf and Hearing (JISH) Jeddah Institute of Culinary Jeddah Culinary training for women Arts Source: Interviews with heads of organizations, 2005 Nonprofits There are many nonprofits in the Kingdom which represent various constituencies. The most prominent areas are education and business services. For instance, there are a number of 35

private schools and colleges which are non profits and provide their own individual services. Some of the most vigorous nonprofits are indeed the Chambers of Commerce, such as the Riyadh or Jeddah Chambers of Commerce & Industry. Overarching them is the Riyadh-based Council of the Saudi Chambers of Commerce and Industry, a nonprofit with a national mandate, a statutory consultee for the government in areas of business legislation and a powerful lobby for the private sector. Organization

Region

Effat College

Jeddah

Dar al-Hikmah

Jeddah

Riyadh Chamber of Commerce and Industry

Riyadh

Jeddah Chamber of Commerce and Industry

Jeddah

Source: Interviews with heads of organizations, 2002 and 2005 Royal Foundations These Foundations are outside the traditional sphere of NGOs and nonprofits, and have been established by members of the Saudi royal family. They are usually well-funded through generous endowments and provide a variety of general and specialized services. Organization

Region

King Khalid Foundation

Riyadh

King Faisal Foundation

Riyadh

Prince Sultan City

Riyadh

The Centennial Fund

Riyadh

Source: Interviews with heads of organizations 2002, 2005, 2007 Associations In addition to traditional NGOs and nonprofits, there are also associations that are now well established and are influential in developing social reform. These associations spend a majority of their time pursuing and implementing reform within specific sectors of social welfare (e.g. human rights), and helping their members gain government recognition. For instance, professional associations, such as that of engineers, provide an arena for discussion with the government on the licensing of women engineers or architects. Other associations are concerned with civil rights ranging from those formally established to ad hoc groups of people discussing particular issues, such as the ability of women to stand for the municipal elections in 2005. 36

Organization

Region

Saudi Economic Society

Riyadh

Saudi Management Association

Riyadh

National Association for Human Rights

Riyadh

Source: Interviews with heads of organizations 2005

Addressing Major Challenges Facing the Social Welfare Sector In order to improve the social welfare sector, it is essential to identify and overcome the major barriers currently hindering growth in the sector. This section explores fundamental challenges to the development of a world-class social welfare sector, and provides targeted recommendations to address the challenges. Specifically, we outline the ideal roles through which the public and private sectors should help to develop social welfare policy. Through this report, we hope to initiate a discussion on how best to proceed with improving the social welfare sector.

Ideal Role of Public Sector in Social Welfare The public sector plays a significant role in the financing, oversight, and delivery of social welfare goods and services. It is important to examine how the public sectorâ&#x20AC;&#x201D;primarily MoSAâ&#x20AC;&#x201D;can make the best use of its financial and human resources. This section outlines ways in which the public sector can provide oversight and act as a regulator. Decisions how to allocate resources and interests must recognize the reality that resources within the Ministry are finite. By suggesting that the public sector adopts a regulatory role, this report offers the recommendation that the Ministry should focus on this, and move away from its responsibility as the primary service provider. As we examine later, the role of primary service provider to the general public is better suited to the private sector.

Management and guidelines for the Public Sector With a shift towards an oversight and funding role, it is important to outline precisely how social welfare service providers can access funds and by what criteria they will be judged. By offering clarity in direction and transparency in process, MoSA can begin to establish the formal mechanisms by which it will entrench itself in an oversight role. Recommendation 37

•

Relevant public sector organizations, such as MoSA, must establish codified and transparent financing criteria and guidelines for private social welfare organizations seeking funding

The key to any shift away from service delivery and towards strategic oversight and funding is the establishment of clearly defined regulations that will govern participants in the social welfare sector. Among other aspects, the public sector’s shift towards an oversight and funding role will mean that organizations can adopt more ambitious and expansive agendas in the absence of the services provided by MoSA itself. Such agendas need funding and sponsorship—which is where MoSA can establish a leading role as a regulatory body. It is essential that MoSA establish clear and equitable criteria that are made readily available to organizations that apply for funding. Such transparency will serve to offer credibility to MoSA in its new role. With credibility and a well-defined funding process, MoSA can also expect a greater number of applicants vying for funding; this will ensure that the programs and organizations of the highest quality are being offered funding and support. As demonstrated in the case study regarding the funding and application process for the Swedish International Development Cooperation Agency, transparency and clarity are essential components of any organization that is hoping to provide effective funding and oversight. CASE STUDY – Swedish International Development Cooperation Agency Clarity and transparency in criteria and funding decisions are essential when distributing government funds to social welfare causes. The Swedish International Development Cooperation Agency (SIDA) serves as an example in providing clear criteria and a transparent process to social welfare organizations applying for funding. SIDA is a government agency which was founded in July 1995 under the Ministry of Foreign Affairs of Sweden. It aims to improve the living conditions of impoverished people by providing funding, skills and technical assistance to NGOs worldwide. SIDA currently provides funds to organizations working in nearly 120 Africa, Asia, Europe and Latin American countries. As of 2007, SIDA provided over $180m in support to NGOs, with the vast majority of its support (nearly 77% in 2006) going towards organizations with “democratic governance and human rights” issues as their primary cause. SIDA’s application process—the means by which it determines how it will allocate its financial support to organizations—rests upon clearly outlined and openly transparent decision criteria. Each applicant is first reviewed by one of SIDA’s 14 “framework organizations”. These are organizations located in Sweden with established, long term partnerships with SIDA. Examples include the Swedish Society for Nature Conservation, Swedish Cooperative Center, and Swedish Mission Council. These organizations are 38

responsible for initiating the process for connecting Swedish NGOs to partner NGOs in developing countries. Additionally, framework organizations will assess applicant project proposals and qualifications, are ultimately responsible for the distribution of SIDA’s funds, and have a hand in the early stage of the grant awarding process. Framework organizations are required to have main offices in Sweden, and are reviewed regularly by SIDA under a set of predefined criteria (competence in development issues, ability to communicate with NGOs, and previous experience, among others). These criteria are clearly outlined on SIDA’s website. Applications reviewed and accepted by the framework organizations are then passed on to SIDA for final grant decisions. SIDA’s criteria for selecting NGOs passed along by framework organizations are also clear and easily accessible on the organization’s website. SIDA offers an example that could be emulated by other organizations providing funding to the social welfare sector. Funds are transferred according to merit, and organizations are able to make sound decisions based on the latest information. This brings transparency to the outcomes, and provides social welfare organizations with a clear mandate to deliver services that deserve funding, and improve current service offerings as necessary.

The establishment of explicit funding mechanisms and procedures ensures the most appropriate and effective allocation of social welfare funds. While financing is definitely an issue of critical importance in the sector, another equally important matter is that of collaboration between social welfare organizations. Recommendation • The public sector should facilitate collaboration and capacity building among NGOs Creating a more collaborative and community-based environment in which NGOs and other social welfare organizations grow and operate can be highly conducive to their success. Social welfare organizations benefit from the insights and resources each organization has accumulated as well as by sharing information and, possibly, projects. In having these organizations collaborate across all areas of their work, both internal and external, each of them can have a much more substantial impact on the people and communities they work in.

In fostering such an environment, Saudi Arabia is bound to see more progress across its social welfare sector. There is a tremendous benefit in having the public sector assume more of an oversight role. In doing so, the government will be in a better position to focus on the more critical and strategic decisions governing the sector and bypass the logistical and day-to-day challenges of actually delivering social welfare services. An equally critical extension to the issue of oversight is that of regulation. As this next section will explore, state established regulation and structure will also be an essential component of the sector’s growth.

Regulatory role of the public sector As part of an oversight role, public sector organizations should create a regulatory framework for the Kingdom’s social welfare sector, that is significant in both size and impact. Traditionally, “regulation” refers to restraints or guidelines imposed by the government.43 In any economy regulations are put in place to address market inefficiencies, avoid undesired foreign influence, or to encourage the government’s desired attitudes among market participants. Within the context of a social welfare sector, similar logic applies. Through regulation, the government has the ability to facilitate and encourage desired behavior among organizations within the sector. While it should be the role of the service providers to decide specific activities—to decide the particulars of what the “desired behaviors” of the sector should be—the government has the ability to equip the sector with the right information that will allow individual organizations to make educated decisions about their future activities. It is the role of government to impose regulations that ensure the transparency of the sector and its activities, ensure the collection and dissemination of information on the sector, and ultimately facilitate the ability for organizations to make critical decisions regarding their activities. From the research and interviews undertaken for this report, it became clear that the social welfare sector lacks certain cohesive and organizing principles that are traditionally established by regulatory bodies. Specifically, there is a lack of comprehensive and up-todate data concerning the organizations that are operating within the sector. There is also a lack of transparent and widely understood procedures and processes governing the creation, registering and licensing of new non-profit and non-governmental organizations. These are two areas that can be addressed through regulation by the public sector. We examine how the Ministry of Social Affairs can address a problem that currently besets the sector—a lack of data and recent information on the organizations participating in the sector. Recommendation 43

Self-Regulation And Social Welfare: The Political Economy Of Corporate Environmentalism, Steven C. Hackett et. al., October 2000 40

â&#x20AC;˘

The Ministry of Social Affairs should act in a regulatory capacity by collecting data on an annual basis from organizations in the sector and providing regularly published reports on the sector. The Ministry should consider three elements when drafting a data report: Strategic goals that it will outline for the sector, and how regularly those goals will be assessed Key metrics that it will use to assess the sector (and the corresponding data that must be collected from organizations in the sector) Financial contributions to the sector from the government, and the subsequent use of those funds

Without accurate or timely data, it is impossible to assess the effectiveness of current organizations and their approaches, and it becomes difficult to identify and deploy resources to highlight developing issues. This problem affects both the organizations participating in the sector, and external stakeholders who seek to offer data-driven analysis and recommendations for reform of the sector. Additionally, donors and contributors to the sector may be left without any information detailing the impact of their assistance, which can have a negative impact on fund raising campaigns.44 As an industry that is uniquely focused on identifying and addressing pressing social problems, a successful social welfare sector relies upon timely and accurate data to ensure continuously that it is addressing the right issues in the right fashion. A lack of reliable data on the sector threatens to disrupt a feedback process that works toward continued improvement to the sector.

The Ministry of Social Affairs must consider three core elements as it develops a reporting system, as noted earlier. These include outlining strategic goals for the sector, defining key metrics that will be used to assess these goals, and tracing the size and impact of financial contributions from the public sector to social welfare causes. The Ministry of Social Affairs creates regulations detailing the information that social welfare organizations must provide. 44

Donor interviews 41

Through research and discussions with multiple stakeholders in the social welfare sector, it became clear that current licensing procedures for non-profit organizations and NGOs are neither well-known nor particularly transparent. At present, any NGO that wishes to operate in the Kingdom must obtain a license from MoSA; upon being granted a license, the NGO is then offered a sum of money to assist with start-up costs. Charities can either obtain a license from MoSA, or be established through a Royal Decree, which is much rarer. MoSA licenses usually dictate a region of the country in which the charity can operate, while Royal Decrees allow charities to operate throughout the Kingdom. The overwhelming majority of charities are established through MoSA’s licensing procedure, with only a few charities being established through Royal Decree. Recommendation • Ministry of Social Affairs should clarify and streamline its licensing process by offering online application submissions, and provide training seminars and / or informational material to educate organizations regarding the licensing process

Many heads of NGOs and charities stated that the registration process is both difficult to understand and overly complicated. The sector would benefit from a streamlined application process that was online, coupled with training seminars or informational or pre-application material to detail licensing requirements. The MoSA could ease the licensing and application process for social welfare organizations in the Kingdom by allowing online submissions, and posting online the necessary requirements for licenses. It should further reinforce this effort by offering support services for organizations that are seeking to complete the licensing application process. It is essential that the government—and most specifically, MoSA—take ownership of the regulatory issues affecting the social welfare sector. This means ensuring that timely and accurate data are provided by publishing annual reports on the sector. Further, the Ministry of Social Affairs can serve to clarify and streamline the licensing process.

Ideal Role of Private Sector in Social Welfare The private sector plays a significant role in both financing and providing social welfare services in Saudi Arabia. While the sector has made tremendous contributions over the past half-century, the dual role of financing and delivering services has impaired efficiency. As discussed earlier, the private sector is much better suited to handle the delivery of services – more operational and implementation-focused matters– than the government. This section examines the specific roles the private sector should take on in order to make the most meaningful and lasting impact in Saudi Arabian social welfare. 42

Delivery of services role of the private sector A fundamental principle behind the activities of private sector organizations is the desire to drive efficiency and effectiveness in their operations. In doing so, they are working towards maximizing profitability and ensuring sustainability. As a result, a significant attribute of these organizations is their innate business / operational mindset. It is this ability that makes the private sector better suited than the government to play the role of primary service provider. Additionally, private sector organizations are much smaller in size and have more focused objectives and goals than the government. In allowing the private sector to be in a position to focus exclusively on this aspect of social service, the social welfare sector will experience not only the streamlining of services but more significant and effective results. Recommendation • Private sector should take on more of a delivery role, which includes taking responsibility for corporate social responsibility (CSR), financial contributions and service delivery In assuming a more delivery-focused role, private sector organizations will also take on the equally important responsibility of promoting corporate social responsibility (CSR). These programs are as important to the overall wellbeing of a nation’s citizens as the direct efforts of social welfare organizations. While CSR programs have traditionally involved contributing financially or in-kind to causes not directly connected to the organization, many CSR programs are becoming directly linked to the purpose and activities of the organization. There are numerous examples of organizations from around the world that have made significant accomplishments in this manner. Detailed below are three such examples: CASE STUDY – Intel Corporate Social Responsibility Incorporated in 1968, Intel has grown into a technology giant engaged in the development of advanced integrated digital technology products. Such technology primarily includes integrated circuitry for the computing and communications industry. In 2007 Intel recorded over $38bn in sales with nearly 82,000 employees globally.

“As a global technology and business leader, we believe that we are uniquely positioned to help advance environmental sustainability, improve education and strengthen communities worldwide – through the innovative application of technology and the hands-on commitment and leadership that we can provide.”

Intel is one of the few corporations to have developed a truly innovative CSR program. Core to Intel’s operating principles is the slogan “With leadership comes responsibility.” The company believes corporate responsibility is fundamental not only for the well-being of the company, its employees and the communities it operates in, but for the company’s long-term success. The corporate social responsibility program at Intel has four primary focus areas:

1. Improvement in education and access to technology 2. Environmental stewardship 3. Community development 4. Economic sustainability

Through these initiatives, Intel has received a number of recognitions for its efforts.

Intel keeps a close watch on its social responsibility activities through its annual Corporate Responsibility Report, which includes an overview of its CSR program, a discussion of its CSR strategy, and a summary of its efforts in the workplace, environment, educational and community spheres.

In defining its strategy for corporate social responsibility, Intel has devised a three-phased process for identifying and prioritizing the issues most pertinent to Intel as a corporation, its relevant stakeholders, and its corporate responsibility agenda. This process consists of first identifying the issues, prioritizing them based on a set of established criteria and, lastly, vetting the issues through an intense review process consisting of both internal and external bodies. Intel’s corporate social responsibility program is a great example of a corporation placing a strong and dedicated emphasis on the welfare communities and environments it operates in. Intel’s CSR agenda involves tackling a range of social issues, collaborating with multiple stakeholders, and ensuring that it, as a global multi-billion dollar company, operates in a sustainable manner.45 Intel provides an example of how a large, multi-billion dollar company has successfully integrated CSR into its business. Another example “We created the Gates Foundation in 2000 of CSR innovation, the Bill and Melinda Gates because we believe in the principle that every human life has equal worth. The life Foundation, illustrates how private sector of an impoverished child in a developing organizations can have a substantial impact by country is as precious as the life of a developing a robust system to make considered middle-class kid in a developed one.” financial contributions to social welfare causes. In focusing its efforts entirely on financing social welfare initiatives, the foundation has been able to make a significant impact across many areas.

Intel Corporation, 2007 Corporate Responsibility Report 44

The following case study on Gap Inc.’s CSR program illustrates how an organization can successfully integrate social responsibility into its everyday operations. CASE STUDY – GAP Inc. Corporate Social Responsibility Breakup ’s Grants, Foundation Breakup of of Foundation’ Foundation’s Grants, 1995 1995 -- 2008 2008

Grants Grants Given Given by by the the Foundation, Foundation, 2000 2000 -- 2007 2007

Global Development 11%

10.26% US$ Bn

United States 32%

2000 2001 2002

2003

2004 2005 2006 2007

Global Health 57%

Total: US$ 16.73 Bn

Note:

Data is as of June 2008; Total excludes grants given to Charitable Sector Support and Employee Matching Gifts and Sponsorships Source: Bill and Melinda Gates Foundation Annual Report 2001-2007

Source: Bill and Melinda Gates Foundation Annual Report 2001-2007

As corporations increasingly recognize that much of their success is due to the communities in which they operate, CSR programs will be seen as investments in continuing success. More significantly, corporations are in a position to offer not only their financial resources, but also their business and operational expertise to advance social welfare. The Tamkeen study on CSR in Saudi Arabia revealed that many business leaders do not see a need to integrate “social responsibility” with their overall firm strategy. In the Saudi Arabian context, there is little recognition and little analysis of the beneficial link between CSR activities and the core activities of private firms.46 Demonstrating such a link will be vital as the social welfare sector in Saudi Arabia continues to evolve.

Volunteering and Donating It is important to acknowledge that the backbone of any thriving social welfare sector is the energy and dedication offered by the individuals who volunteer their time and resources. Many professions lend themselves to pro bono activities. Organizations must facilitate and streamline the process for professionals to donate certain critical services—including medical assistance and legal guidance. Recommendation 46

Saudi Companies & Social Responsibility, Tamkeen Development & Management Consulting, February 2007 45

â&#x20AC;˘

Private organizations should seek to establish a link between volunteer service providers and potential beneficiaries in need of services

Many people in Saudi Arabia are unable to afford specialized legal, financial, or other services, while many professionals are willing to contribute their services on a pro bono basis. It is important that mechanisms are put in place to connect these two sides. The Legal Aid Society of New York serves as an example of an organization that has effectively connected willing service donors with beneficiaries in need.

The private sector in Saudi Arabia should take on the leading role in delivering services to those in need. This can be done in several ways including strategic implementation of CSR programs from organizations that are not directly involved in the social welfare sector. Private entities may also provide direct funding to other third-party social service providers. Lastly, private entities not directly involved in the social welfare sector may provide services. This section has also examined how the private sector can facilitate service delivery by serving as a link between those in need, and others who are willing to provide social services on a pro bono basis.

Human resource development Another significant challenge facing the social welfare sector in Saudi Arabia is a lack of adequately trained personnel. There are numerous examples of social welfare organizations in the Kingdom limiting their service due to the lack of qualified personnel. The Al-Nahdah Downâ&#x20AC;&#x2122;s Syndrome School, for example, ceased all operations as a result of a lack of both teachers and trained individuals to manage its operations. The closure was a huge loss to Saudi Arabia given the tremendous need to support the families of children with Downâ&#x20AC;&#x2122;s Syndrome.47 There are unfortunately many other stories from across the Kingdom regarding organizations that have faced similar predicaments. 47

Social services interviews 2008 46

Interviews with the heads of numerous NGOs and nonprofits show that hiring qualified individuals or setting up training programs is among their top priorities. The lack of sufficient capabilities, however, is a problem right through the social welfare sector and not just with NGOs and nonprofits. It not only has implications for those organizations, but for the corporations and other organizations that also engage in social responsibility programs. Without a sufficient supply of staff with the appropriate level of qualifications and capabilities, the sector will not be in a position develop and expand upon its activities in a meaningful way. The human resource issue, however, is one of capacity development and the appropriate deployment of talent. This report helps discuss how the private sector can undertake capacity development in social welfare. Recommendation â&#x20AC;˘ Private sector should build human resource capabilities within the social welfare sector Capacity development programs must span all areas of the sector, targeting those organizations specifically focused on social welfare, such as NGOs and nonprofits, as well as those with CSR programs. Social welfare organizations and corporations must adapt best practices from the business and corporate environment. Establishing capacity development programs in Saudi Arabia is not only critical: but it must also come in the form of a concerted effort at all levels. Initiatives by the government, for example, through financial and in-kind incentives could help promote the establishment of organizations focused on capacity development. Urging corporations to tier their CSR programs towards capacity development in social welfare is another means of achieving this. These are only two examples of ways in which Saudi Arabia can promote the development of programs and organizations focused on capability development in the Kingdom. Most of the major business schools in the United States and Europe have established specific programs to develop and foster corporate social responsibility. These programs are geared towards both students enrolled in traditional MBA degrees as well as executives and others enrolled in executive MBA, certificate and open enrolment courses. Many of these programs use best practices and insights from traditional business applications and aim to teach participants their applicability in social welfare and CSR context. These programs have come up with innovative approaches and methodologies for instilling not only the desire to undertake CSR initiatives, but also the ability to integrate socially responsible practices into the business mindsets of their students. In garnering a true appreciation of social welfare among business leaders, these programs hope to reinforce the impact CSR programs have on social welfare around the world. A few of these programs are discussed in more detail below: 47

Boston College: Carroll School of Management48 Under the umbrella of the Boston College Carroll School of Management, the Boston College Center for Corporate Citizenship (BCCCC) aims to function as an “educational institution, a think tank, and an information source” in the corporate research world. BCCCC’s vision of engaging “…with companies to redefine business success as creating measurable gains for business and society” places its mission at the heart of CSR. BCCCC’s conducts three primary activities within the CSR space—certificate programs, open enrollment courses, and convening programs.

Harvard University: Harvard Business School49 Harvard Business School (HBS) was established in 1908 and provides graduate business studies through its MBA and executive MBA programs. HBS offers a variety of programs focused on CSR, many of which have been featured on the Corporate Responsibility Officer’s (CRO) list of Top 10 Executive Training Programs in Corporate Responsibility. CSR programs at HBS have been developed with the intention of educating senior managers to understand better how to integrate social values with organizational objectives. Within Saudi Arabia’s private sector, there are many organizations that are willing and eager to contribute to social causes. As Tamkeen found in its 2007 study, many business leaders in the Kingdom are willing to contribute to social causes out of a commitment to Islamic values and a desire to “give back” to local communities and citizens, among other reasons. However, few of these organizations and individuals have a strong sense of the strategic choices that must be made and the business opportunities that can be uncovered through welldesigned CSR programs. Companies in the Kingdom do not have a robust understanding of how to identify, prioritize, and manage CSR programs; nor do many companies recognize the potential to build a link between an organization’s social contributions and its competitiveness.50 Companies that are interested in providing social welfare services or developing CSR programs often need to consider the strategic objectives, implementation plan, and proposed impact of their activities. Many private organizations throughout the world provide training and specialized services to assist companies that have the desire but not the proper knowledge to begin effective CSR programs. Organizations in the Kingdom can most certainly benefit from such services; as one business leader noted, “we prefer not to mix CSR with business strategy.” This business leader fails to realize that CSR programs can serve to compliment business strategy and unlock future opportunities. There is a sense in Saudi Arabia that “businesses lack the incentive to link CSR with core businesses.” This is why it is important to have outside, private organizations providing strategic guidance and support as companies 48

Boston College Carroll School of Management Website Harvard Business School Website 50 Saudi Companies & Social Responsibility, Tamkeen Development and Management Consulting, February 2007 49

consider ways in which they can contribute to the social welfare sector through CSR or other charitable programs. Recommendation • Establish CSR training programs that will be provided by private companies to interested organizations throughout the Kingdom For the growth of the social welfare sector, it is important that private organizations recognize the need to provide training services to corporations interested in creating CSR programs. Such organizations can offer services that vary from metrics tracking, to advisory services, to advice and training on CSR programs. As detailed in the case study below, Business in the Community (BITC) is a prime example of a private organization providing training and support services for other companies that may offer CSR programs or other social welfare contributions. CASE STUDY – Business in the Community Promoting social welfare causes and socially responsible practices among private companies is an essential driver of sustainable and substantive progress to the sector. Sometimes, this promotion does come from within an organization or business. However, it is often the case that an organization may not know or understand how to pursue socially responsible practices within the context of its own business setting and fiduciary objectives.

The UK’s Business in the Community (BITC) is an organization that looks to build this bridge between an organization’s desire to commit itself to socially responsible practices, and its ability to take action and achieve these ends. BITC aims to eradicate social issues by providing corporate social responsibility training and advisory services to its wide base of over 800 member companies and 3,000 other companies in UK.

Established in 1982, BITC supports and encourages companies to become more socially responsible within their communities, regarding the environment, and within their workplace. In 2007, BITC drew 156 new companies into membership agreements, bringing the total membership of companies to above 850. In total, approximately 3,000 companies have been involved through BITC programs and campaigns to promote and learn best practices for CSR.

Perhaps the most unique and significant aspect about BITC is not the number of organizations that it works with or the objectives that it has achieved. Rather, the fact that BITC exists in the first place points to a unique niche that must be filled by private organizations training and helping other private organizations to understand how they can 49

successfully integrate socially responsible practices into their existing businesses. BITC’s value is in sharing knowledge and experience with companies to inspire them to develop innovative ways to solve social issues within their own communities. This is achieved through a number of mechanisms, many of which involve directly interfacing with companies. In Saudi Arabia, no organization like BITC exists —that is, an organization that provides training and support services to help companies best understand how to implement social contribution programs. Such units are important to teach companies how they can incorporate CSR programs into their main strategies, thereby increasing their competitiveness while providing social services.

Conclusion The social welfare sector in Saudi Arabia continues to progress and expand, but many challenges remain: the roles and responsibilities of the public and private sectors are often redundant and unnecessarily overlapping; private companies and business leaders lack familiarity with strategic ways to incorporate socially responsible practices into their organizations; a lack of regularly published data on the sector complicates efforts to identify necessary areas of reform or future focus. The recommendations in this report aim to facilitate a discussion on how to improve the sector’s effectiveness. Enacting these reforms will require strong leadership, substantial investment, and government collaboration with the private sector. Joint efforts between the public and private sector will create mechanisms to bring about change. These organizations, as well as private sector entities that contributed to this report, provide a vehicle for ambitious initiatives that address the issues facing the sector. Public and private sector stakeholders can ensure Saudi Arabia’s citizens have access to timely, effective, and compassionate social services. But overriding and underpinning this report is Islam and the duty of Muslims to look after the poor, to give wealth away by zakat and by sadeqah. The report wil end, where it began with the sunnah. The Prophet said, ‘If someone gives as charity so much as the equivalent of a single date from honest earnings – and God accepts only what is honest – God takes it in the Right Hand, then makes it increase for the one responsible, just as one of you raises a foal, until it becomes as big as a mountain.’