In the context of the development of the economic and social scene in the Kingdom of Saudi Arabia,
Non-profit sector governance report plays an indispensable role in achieving well-being and developing society.
In our article, Governance of the Non-Profit Sector, we will clarify the reports, foundations, standards and vision of 2030 in the Kingdom.
Among the basic factors for achieving this vision is strengthening the role of the authorized financial authorities specialized in providing financial support to non-profit institutions and projects.
Hence comes our role CFOONLINE as an accredited financial office that seeks to provide specialized financial services that meet the needs of non-profit organizations and support them in achieving their noble goals.
What is the Non-profit sector governance report?
Governance in the nonprofit sector refers to the methods and practices used to manage and direct non-profit institutions and organizations.
Governance aims to:
- Achieving transparency, accountability and credibility in the management of these institutions.
- and ensuring the efficient and effective achievement of its social or humanitarian goals.
Challenges of governance of non-profit organizations in Saudi Arabia
- Lack of a clear legal and regulatory framework:
Non-profit organizations in Saudi Arabia face challenges in reaching a clear legal and regulatory framework that accurately defines their responsibilities and rights.
- Lack of awareness of the importance of governance and the necessity of implementing it:
The non-profit sector suffers from a lack of awareness of the importance of governance and how to apply it effectively, which hinders achieving the maximum benefit from these practices.
- Funding and financial sustainability challenges:
Nonprofit organizations may experience difficulties in securing permanent and sustainable funding, which affects their ability to achieve their long-term goals.
Best practices in the governance of the non-profit sector
- Applying the principles of transparency and accountability: Institutions must be transparent with regard to their activities and management, and apply the principles of accountability to ensure the achievement of expected results.
- Forming specialized and qualified administrative boards: Boards of directors must consist of members with experience and expertise in various fields, to ensure informed decision-making.
- Developing long-term strategies and monitoring them periodically: Developing long-term strategies helps direct work and achieve specific goals, and they must be monitored and evaluated periodically to ensure continued success.
The 4 most important levels about the non-profit sector
We can divide the non-profit sector into four levels for simplicity:
First: If the entity is an association or civil society institution, then the recently issued system of associations and civil society institutions, its executive regulations, and governance rules.
It explains the elements of governance, which can be summarized as follows:
- Determine the requirements and mechanisms for appointment to leadership positions, whether in council membership, executive leadership, or committees.
- Clarity of roles, tasks and responsibilities
- How to call meetings and voting controls
- How to make a decision and powers
This is clear, and it is the responsibility of the financially, administratively and technically supervising authority (this applies to all legislative bodies) to monitor and supervise.
Second: If the entity is a cooperative association, the new cooperative system clarifies the governance framework required for this type of entity.
Third: If the entity is an endowment, there is a project (Principles of Endowment Governance) that aims to the following:
- Activating governance and preserving, developing and sustaining endowments.
- Assisting endowment entities in strengthening the general frameworks of good governance.
Fourth: There are non-profit entities such as some universities, for example: “King Saud University, Effat University, Dar Al-Hekma University”.
In some hospitals, such as King Faisal Specialist Hospital and other organizations of a private nature, you will find their governance framework explained in their bylaws.
According to our knowledge, as a certified financial office (CFOONLINE),
the governance framework and standards for non-profit organizations will witness in the coming period a significant and comprehensive improvement at the level of legislation to meet the goals of the vision.
To accommodate all types of non-profit entities, and also to establish governance frameworks and standards that are appropriate to the sizes and activities of those entities based on the risk-based approach.
“If you represent a non-profit organization looking for credible and experienced financial support, our certified financial office, CFOONLINE, is your ideal partner.”
Foundations and standards of non-profit sector governance
In our article, we will learn about the most important foundations and standards of governance in the non-profit sector, which are:
- Transparency:
- A non-profit organization must be transparent regarding its financial and administrative activities and operations.
- Regular information and reports should be published explaining the organization’s goals, how to achieve them, and the use of funding.
- This includes publishing detailed, independent financial reports to the public.
- Accountability:
- Responsibilities and roles must be clearly defined within the organization.
- There must be mechanisms in place to monitor the performance of the organization and hold management accountable for achieving goals and using resources effectively.
- Boards of Directors:
- Boards of directors should be composed of qualified and experienced members in multiple fields.
- The role and responsibilities of the Board of Directors must be clearly defined, including oversight and strategic decision-making.
- Balance between goals and interests:
A non-profit organization must work to achieve a balance between its social and environmental goals, and the interests of the various members of the organization and the public.
- Financial sustainability:
Strategies must be developed to secure sustainable funding for the organization through multiple sources, such as donations, grants, and self-revenue.
- Independent review:
It is preferable to conduct an independent audit of financial accounts to verify the accuracy and transparency of financial reports.
- Follow laws and standards:
The organization must adhere to local and international standards and regulations related to the governance of the non-profit sector.
- Community participation:
The organization can strengthen its governance by encouraging community participation and consulting organizational members and stakeholders.
- Reports and evaluation:
Periodic reports must be submitted showing the organization’s progress towards achieving its goals, and a periodic evaluation of the organization’s performance and the effectiveness of its governance can be provided.
- Capacity development:
Capacity development opportunities should be provided to organization and board members to improve their knowledge and skills in nonprofit sector governance.
What is the private non-profit sector?
The term (private non-profit sector) may be a little confusing because the private sector is usually associated with commercial activities aimed at making a profit.
However, if there is a direction towards non-profit work within the private sector.
It can be interpreted as follows:
The private non-profit sector refers to institutions or companies that take the form of commercial enterprises from the private sector, but do not primarily aim to make a profit.
Instead, it has a social, environmental, or humanitarian goal or purpose that goes beyond financial fulfillment.
This type of company can include:
- Social companies: They work to solve social or environmental problems through their activities. Example: A company providing educational services to the local community.
- Socially responsible companies: Companies that pursue profit and at the same time seek to achieve a positive social impact by incorporating social responsibilities into their activities.
- Charitable organizations with a legal body: They adopt administrative and financial techniques similar to commercial companies, but aim to achieve charitable or social goals.
- Social projects: temporary projects or initiatives aimed at solving a specific problem or achieving a social impact in a specific period of time.
The non-profit sector in Vision 2030
“Saudi Arabia Vision 2030” is a comprehensive initiative aimed at transforming the Saudi economy and society in a comprehensive and enlightening manner.
This vision focuses on the following:
- Achieving economic diversification
- And infrastructure development
- and promoting innovation
- Improving the quality of life for citizens.
In this context, the non-profit sector plays an important role in achieving the goals of Vision 2030 by providing social, cultural, educational, health and environmental services.
The impacts of the non-profit sector extend to various aspects of the vision, including:
- Economic Development: Nonprofit organizations can participate in supporting the diversification of the economy by providing job opportunities and developing citizens’ skills.
- Education and training: Non-profit institutions contribute to enhancing the quality of education and providing educational and training opportunities to develop the skills and competencies of young people.
- Environment and Sustainability: Nonprofit organizations play a role in promoting awareness of environmental issues and promoting environmental sustainability practices.
- Health care: Non-profit organizations can provide improved and affordable health services to citizens, thus promoting health and well-being.
- Community Participation: Non-profit organizations help enhance community participation and enhance the volunteer spirit of citizens.
Vision 2030 reflects the Kingdom’s commitment to improving all aspects of life and promoting sustainable development,
and the non-profit sector plays an essential role in achieving these goals by providing services and improving the social environment for citizens.
The role of the non-profit sector in the Kingdom
The non-profit sector plays a vital and important role in developing and improving society and the economy in the Kingdom of Saudi Arabia.
The influence of this sector extends across a wide range of fields and activities.
There are several roles played by the non-profit sector in the Kingdom, including:
- Providing social services: The non-profit sector provides various social services such as health care, education, housing, and social assistance. This contributes to improving the quality of life of citizens and meeting their basic needs.
- Promoting education and training: The non-profit sector contributes to providing education and training opportunities, whether through its own schools and universities, or through training programs and workshops aimed at developing community skills.
- Charitable work and relief: The non-profit sector plays an important role in providing aid and support to groups in need and those affected by difficult situations, whether inside the Kingdom or abroad.
- Promoting culture and arts: The non-profit sector encourages the development of culture and arts by organizing cultural events, holding exhibitions, and providing spaces for artists and writers to express their work.
- Environmental protection and sustainability development: The non-profit sector plays an important role in spreading awareness of environmental issues and promoting sustainable practices, through awareness campaigns and environmental projects.
- Enhancing community participation: The non-profit sector contributes to enhancing community participation by organizing events and activities that bring together community members and enhance communication and cooperation.
- Funding and donations: The non-profit sector contributes to providing sources of funding for social and humanitarian projects by collecting donations and stimulating donations by individuals and companies.
- Supporting innovation and social entrepreneurship: The non-profit sector can support and encourage innovation and entrepreneurship that aim to solve specific social problems and achieve a positive impact.
Whatever your nonprofit projects and goals, our CFOONLINE office offers the expertise and understanding to support you on your journey.
Top related articles:
_ Governance in the government and private sectors in Saudi Arabia
_The concept of governance and its principles in Saudi Arabia
_ The meaning of governance is a comprehensive guide for the year 2023
Non-profit sector authority
A non-profit sector authority is an entity or organization established and regulated by special laws and regulations to regulate and coordinate non-profit activities in a particular community.
- These bodies aim to achieve social or humanitarian goals rather than financial profits.
The Non-Profit Sector Authority may be responsible for supervising a variety of non-profit organizations and institutions,
and providing support and guidance to them to ensure their effective and transparent performance.
The functions of these bodies may include:
- Organization and Licensing of Organizations: Licensing and regulating foundations and non-profit organizations to ensure they adhere to applicable standards and regulations.
- Controlling activities: defining the scope of activities that non-profit organizations can undertake and ensuring that they are consistent with the goals of the non-profit sector.
- Enhancing Transparency: Enhancing the level of transparency and governance within institutions and encouraging them to publish general information, financial reports and performance.
- Providing support and advice: Providing support and guidance to non-profit organizations in a range of aspects such as management, fundraising, and program planning.
- Enhancing communication: Encouraging communication and cooperation between non-profit institutions and providing platforms for exchanging knowledge and experiences.
- Performance Follow-up: Monitoring and evaluating the performance of non-profit organizations to ensure that they achieve their goals and comply with standards.
- Organizing Events and Programs: Organizing and supporting awareness and educational events and programs that promote the objectives of the non-profit community.
- Promoting sustainable development: Supporting non-profit organizations in developing financial sustainability strategies that enable them to continue their activities in the long term.
- Non-profit sector bodies play an important role in organizing and supporting the non-profit community and ensuring that it achieves the various goals it seeks.
The most common questions about governance in the non-profit sector
Here are the most common questions:
-
What is the role of governance in enhancing the performance of non-profit organizations?
Governance contributes to directing decisions towards achieving social and environmental goals, and enhances the effectiveness and transparency of management.
-
Are there laws and regulations specific to the governance of the non-profit sector in Saudi Arabia?
Yes, there are some developments in laws and regulations related to the governance of non-profit organizations in Saudi Arabia, but they may need further development.
-
How can nonprofits enhance donor and public trust through governance?
This can be done by publishing transparent financial reports and independent auditing of accounts, in addition to submitting periodic reports on achieving goals and social impact.
-
How can financial sustainability be achieved for non-profit organizations through governance?
This requires diversifying funding sources, developing strategies to attract donations and support, in addition to effective management of financial resources.
Conclusion:
Based on the directives of Vision 2030 and our commitment to supporting and empowering Non-profit sector governance report in the Kingdom,
our CFOONLINE role as an accredited financial office remains the cornerstone of providing financial support and advice that ensures the success and sustainability of your projects and initiatives.
We are happy to be part of your journey towards achieving positive change in our community.
Most important sources:
