- ARAB NEWS
- 25 Apr 2024
Since 1975
Two factors are making it increasingly necessary to encourage nonprofit organizations to shoulder greater social responsibility. First, the sharp decline in oil prices is going to reduce government revenues and, hence, the ability to continue some social programs at their current levels of funding, especially as the price slump is coming amid a global economic slowdown triggered by trade wars and protectionism. Nonprofits could help in providing some relief by providing welfare assistance or by funding schools and health facilities.
The second factor is the rapid spread of the novel coronavirus, which has taxed health systems and caught everybody unaware. Nonprofits could help here too by providing more assistance with the prevention and containment of the disease. Volunteers could help taxed health workers in providing nonmedical assistance and coordinating the relationship between society and health institutions.
On Sunday, Riyadh hosted the seventh annual ceremony of the Princess Seetah Award for Social Work, where several organizations and individuals were given awards in recognition of their social contributions. The charity is named after the late Princess Seetah, sister of King Salman, who is also the honorary chairman of the philanthropic association. In addition to recognizing volunteers and social work leaders, the eight-year-old group has its own initiatives to promote and support nonprofit work.
The event highlights the resurgence in nonprofit activities in Saudi Arabia and the region, after years of decline. Oil wealth enabled governments to underwrite free education and health care, and institute generous welfare programs. These activities were historically the domain of nonprofits. The role of nonprofits further declined after the Sept. 11 attacks, as governments worldwide started to scrutinize charity work and found that the governance of some was inadequate. Some were suspected of unwittingly funding terrorism or violent extremism and were shut down. The ensuing clouds of suspicion had a chilling effect on nonprofit activity.
With better transparency and accountability measures, as well as closer scrutiny by government agencies, nonprofits resumed playing an important social role, as was evident in the work of the groups and individuals recognized by the Princess Seetah Award ceremony this week.
There is limited information available about the economic contribution of Gulf nonprofits. Worldwide, countries differ greatly with regard to the share of gross domestic product contributed by nonprofits. In most rankings, Canada and the US top the list in how much their nonprofits contribute to their overall economies, at about 8 percent and 7 percent, respectively. Belgium tops the European countries at 6 percent. Japan, New Zealand and Australia top the Asia/Pacific countries at about 5 percent each.
In monetary terms, nonprofits contribute about $1.4 trillion to the US economy every year. Added to that is the value of voluntary work. The 2018 Volunteering in America report found that more than 77 million adults (30 percent of the US population) volunteered through an organization. Altogether, Americans volunteered nearly 7 billion hours, worth an estimated $167 billion in economic value.
Nonprofit work has been a feature of US society for centuries. That aspect of American life elicited praise from the French writer and diplomat Alexis de Tocqueville when he visited the US in the mid-19th century. He compared it favorably to his native France, where the state and for-profit entities dominated economic and social life.
Today, most American universities, including world-famous schools such as Harvard, Yale and Columbia, are not-for-profit, while even so-called state universities are in fact nonprofits. Most hospitals and social welfare institutions are also not-for-profit institutions.
Similar to America, during much of Arab history, nonprofits dominated the fields of education, health and social welfare. The famous universities that date back to the Middle Ages in Egypt, Iraq, Morocco and Tunisia were all nonprofits, as were lower-level schools, hospitals and sanatoria. In addition, inns for travelers were mostly funded by charities. The great 14th century explorer Ibn Battuta, who traveled from his native Morocco to China and back, talked at length about the inns he stayed in for free and where he got to meet the best of the local talent.
In Saudi Arabia during pre-oil times, nonprofits dominated education and social welfare. The not-for-profit institutions in Makkah and Madinah were famous, as chronicled by the great travel writers of the time, but Riyadh also used to host some such institutions, including private endowment and donation-funded schools and dormitories for students, as well as hostels for travelers. A famous hostel was located in the southeastern part of the city, just inside the city walls.
Nonprofit work is resurging and Saudi Arabia is reclaiming its heritage. During tough times, nonprofits can help those less fortunate.
Abdel Aziz Aluwaisheg
As was made clear during the citations for recipients of the Princess Seetah Awards, nonprofit work is resurging and Saudi Arabia is reclaiming its heritage. During tough times, nonprofits can help those less fortunate. One of those recognized was Nora Al-Ajmi, who started a nonprofit food bank; another was a program to provide free health care to those who need it; and a third award went to an endowment administration that has prioritized social welfare programs. The activities of some of the nonprofits awarded took place outside Saudi Arabia.
If the current oil price drop continues, some oil exporters will need to encourage nonprofits to assume a greater role in providing social services. This will especially be the case in countries such as Iraq, where government services have been limited, and in countries already struggling to balance their budgets before the latest collapse in oil prices.
Nonprofits are usually labor intensive and could help in job creation, albeit with moderate pay. Unemployment is in double digits in many Arab countries, and is much higher for youth and especially for women. While providing important social services and relieving governments of some of the costs of those services, nonprofits could provide meaningful work for the unemployed.
