Why Saudi, Arab Gulf charities are taking a strategic approach to philanthropy

DUBAI: The culture of charitable giving in Saudi Arabia has been highlighted as a noteworthy example of “strategic philanthropy” by a new report from the Center for Strategic Philanthropy at the UK’s University of Cambridge Judge Business School.

The report, titled System Change in Philanthropy for Development: A Research Framework for Global Growth Markets, recommends philanthropists pursue greater localization alongside the utilization of new financial instruments to optimize charitable giving.

The Kingdom is well known for national philanthropic institutions such as the King Salman Humanitarian Aid and Relief Center (KSrelief), which provides international aid, the King Khalid Foundation, which works to improve social and economic development, and the Mawaddah Women’s Charity Association, which aims to ensure women are aware of their civil rights.

Now, as a nation that frequently combines state and philanthropic resources to meet regional development goals, Saudi Arabia has been identified by the study’s author, Shonali Banerjee, as an effective practitioner of what is known as “strategic philanthropy.”

“Some of our research in Saudi Arabia has revealed some really interesting insights about philanthropic transitions that are happening in the Kingdom but also in the Gulf, more broadly,” Banerjee told Arab News.

“One of the key insights for the region in particular is that we all know that philanthropy, giving and being charitable has been a huge part of Gulf and Saudi society for a very long time, for many generations, but recently it has become quite a lot about the transition to what we at the center call strategic philanthropy.”

In recent years there has been a proliferation of foundations, charities and nonprofit organizations, part of a so-called third sector that belongs to neither the public nor private sectors, that are structurally involved with development issues aligned with the UN’s Sustainable Development Goals.

In the process, the function of these entities has become more strategic in nature, with philanthropists and nonprofits working hand in hand with the government sector to create long-term sustainable change. According to Banerjee, this model of cross-sectoral cooperation breaks with the traditional division of the public, private and third sectors, to their mutual benefit.

“What was very clear in the report was the need to create local networks, local collaborations, local partnerships between different sectors that have historically been siloed in the region and in the country,” she said.

Banerjee believes that, harnessed properly, philanthropy can be a catalyst for bringing these sectors together to work toward common goals.

“In many cases, something that our research has shown is that if you have the private sector, you have corporate social responsibility,” she said.

“A lot of times, companies are acting in their own silos and they’re not really necessarily always looking to form a collaboration with the local government. There is a huge opportunity here, as institutional philanthropy is getting bigger. It’s becoming more popular, particularly for Saudi Arabia.”

Indeed, the Kingdom’s Vision 2030 agenda for economic diversification and social reform has created an environment that is ideal for greater cross-sectoral collaboration.

“That’s where, potentially, philanthropists who have been successful in the corporate sector can really bring the nonprofits and the government together and fulfill a bridging role,” Banerjee said.

Arab philanthropies have a potentially crucial role to play in helping to fill the gaps in service delivery in weak or failed states in the region. However, there is a danger that third-sector entities can take on too many state functions in situations where a cross-sectoral approach might be a better fit.

Cambodia in the 1990s is one example of a developing country in which the third sector has taken on a prominent role in service delivery, functioning “almost too much” like a quasi government.

“They’re not making major policy decisions but they’re perhaps providing the majority of early-childhood education, building lots of hospitals, trying to work toward alleviating poverty or they’re providing a huge amount of solar energy,” Banerjee said.

“We’ve noticed that, unfortunately, even though those things are very necessary they’re not sustainable models because you can’t build a model where you have essentially two parallel forms of government functioning alongside each other.”

Instead, Banerjee said, the aims and responsibilities of both sectors ought to work in harmony because even the wealthiest of philanthropists cannot solve systemic issues on their own.

“From our perspective, the most strategic and sustainable way for any government to achieve some of their targets and make a lot of these systems work for them is to work with the philanthropic sector but not see them as challengers or any sort of real tension there,” she said.

Ensuring a more strategic approach to philanthropy also means being smarter about how money is allocated and used and, for good measure, showing a commitment to evidence-based assessments to ensure funding is targeted efficiently.

“This means supporting organizations like the Abdul Latif Jameel Poverty Action Lab (also known as J-PAL), which conducts rigorous evaluations of poverty-alleviation interventions and works with philanthropists, among others, to ensure the evidence generated by those evaluations is translated into policy and into decision-making,” Uzma Sulaiman, associate director of partnerships for Community Jameel, an international organization that uses an approach grounded in science, data and technology to tackle global issues and challenges, told Arab News.

“This is especially relevant for philanthropists to understand where their financing will be most effective. In the Arab world, J-PAL works across the region through its Middle East and North Africa office, which Community Jameel helped launch in 2020 at the American University in Cairo.”

Another notable philanthropic organization in Saudi Arabia is Alwaleed Philanthropies, which supports firms and academic institutions that are working to empower women, alleviate poverty and enhance public infrastructure and service provision.

The growth of the philanthropic sector in the Kingdom has come hand in hand with changes in the way people donate. The digital transformation in the country has expanded to the charitable sector through the creation of new regulated services, including Ehsan, Shefaa, KSrelief, and the National Donations Platform developed and overseen by the Saudi Data and Artificial Intelligence Authority.

Ehsan, a platform launched in 2021, enables philanthropists and donors to choose from a selection of charitable causes close to their hearts, including social and economic issues, health, education and the environment.

By focusing on individual values and specific societal issues, Ehsan aims to encourage a greater sense of social responsibility among the general public and private-sector organizations, while also promoting a culture of transparency related to charitable giving.

Last year, King Salman and Crown Prince Mohammed bin Salman made multiple donations through Ehsan that pushed the total amount collected through the platform since its launch to more than SR1.4 billion ($373 million). The money has been distributed to more than 4.3 million beneficiaries.

Saudi Arabia is not the only Arab Gulf state encouraging such cross-sectoral collaborations. Last September, NYU Abu Dhabi launched the Strategic Philanthropy Initiative, the first academic and community-based platform of its kind in the region. It was established through a multi-year framework agreement between NYUAD and Badr Jafar, an Emirati businessman and social entrepreneur.

Such initiatives reflect the growing role of philanthropy as part of the region’s development agenda, the adoption of new financial mechanisms, and perhaps even the decolonization of aid as local actors take over from foreign benefactors.

According to a 2021 global survey by Alliance, a UK-based publisher that analyzes trends in the charitable sector, 89 percent of respondents said they believe countries in Africa and Asia, including the Middle East, will witness the largest growth in their philanthropy sectors over the next 25 years.

Against this backdrop, the evolution of philanthropy in Saudi Arabia and the wider Gulf region appears to reflect a generational shift that will become more apparent in the coming decades.

“There has been some research about this sort of next-generation and millennial philanthropy but most of it has been focused on the West,” Banerjee said.

“We are really interested, at the center, in these huge shifts that are happening in the Middle East and the Gulf.”