Daniel Breytenbach, associate
In recent years there have been many
developments in charity, fundraising and endowment legislation in Dubai. The
past five years have seen developments such as the promulgation of legislation,
making non-registered charities illegal, as well as the introduction of
criminal prosecution of individuals and corporate entities collecting donations
for would-be charitable campaigns without approval of government
authorities. Most recently there has
been a welcome endeavour by the Government of Dubai to regulate and promote
participation in making endowments for charitable causes.
Fundraising for charities in Dubai
With an abundance of fraudulent
charities, online scams and campaigns aiming to raise funds for illegal
purposes, the UAE government introduced Article 27 of Federal Law No. 5 of 2012
on Combatting Cyber Crimes with the aim of eradicating all unapproved
charities. Article 27 states that any person who establishes, operates or supervises
a website or publishes information on a computer network (or any other
information technology tool) to call or promote collection of donations, without
a license approved by the competent authority, shall be punished by
imprisonment and/or a fine not less than AED 250,000 and not exceeding AED
Due to Article 27 online fundraising
has effectively become a restricted activity in the UAE. Online fundraising can
only be permitted once approved by the relevant authority and must only be carried
out by a registered charity holding a specific permit allowing for the
collection of donations. Dubai’s Islamic Affairs and Charitable Activities
Department (“IACAD”) is the relevant
authority empowered to approve fundraising for charities in the UAE.
The Government of Dubai further
expanded on the prevention of unregulated charities and fundraising enterprises
with the issuance of Decree No. 9 of 2015. The Decree prohibits the collection
of donations or advertising of fundraising campaigns, through any form of media,
without obtaining prior written approval from IACAD. The penalty prescribed for
violation of this Decree by any person or entity is imprisonment of two months
to one year and/or a fine ranging from AED 5,000 to AED 100,000.
The issuance of Decree No. 9 of 2015
was a reaction by the Government of Dubai to various unregistered foreign and
domestic charities directly promoting the collection of donations without any
regulation. The Decree further served to empower IACAD to effectively carry out
its mandate to regulate, supervise and audit fundraising activities in Dubai
and, above all, to ensure that charitable donations reached the people they
were intended for.
The new endowment law
With an effective regulatory
structure in place for determining policy and to provide guidance on the
prudent application of funds raised for charities and endowments made, the
Government of Dubai introduced a comprehensive legislative framework to
encourage and incentivise endowments for legitimate charitable purposes.
On 29 October 2017, His Highness Sheikh
Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE
and Ruler of Dubai, issued the Endowment Law, Dubai Law No. 14 of 2017.
Prior to the introduction of the
endowment law, entities wishing to donate to charitable causes had to make
donations to the Awqaf and Minors Affairs Foundation (the “AMAF”). The AMAF would decide which of a limited number of
registered endowment projects would be supported. Thus, benefactors had little
or no say when determining the recipients of their charitable contributions or
The new endowment law allows for
private individuals, companies and organisations to establish their own
endowments. Individuals and corporate entities are able to create endowments in
relation to education, healthcare, culture, the environment, the arts, sports
and many other sectors benefiting people in need or the community in
Under the new law the AMAF will
still register and receive all necessary documentation from endowment bodies or
benefactors, and after review will issue waqf licenses to applicants. The waqf
licenses will be submitted to the Mohammad Bin Rashid Global Centre for
Endowment Consultancy (the “MBRGCEC”)
to issue a Dubai Endowment Sign to the endowment body. The Dubai Endowment Sign
will enable the donating benefactor to operate as an endowment institution and to
independently work towards whatever charitable goals it may have. The AMAF, as
the endowment regulator, will still monitor the revenue and expenditure of
endowments and ensure that funds are spent according to the registered purpose
of the endowment.
Aside from the endowment law
granting donors the freedom of choosing the purpose or beneficiaries of their
endowments, the endowment law’s provision for the acquisition of the Dubai
Endowment Sign is a notable incentive for public or private sector benefactors
to contribute to communities in the Arab world, through endowments.
It is beneficial to entrepreneurs
and commercial enterprises to obtain the Dubai Endowment Sign from the MBRGCEC,
since entities or persons who hold it will gain special privileges when bidding
for government procurements and contracting with Dubai Government entities.
They will benefit from media exposure upon receipt of the Dubai Endowment Sign;
they will have the rights to use the Dubai Endowment Sign in marketing and
promotional campaigns to raise awareness of their contribution to the community.
The incentive behind the endowment law
is that all parties, to which this new piece of legislation relates, (i.e. the beneficiaries,
endowment bodies, the government and the community) will benefit. To elaborate,
the endowment law creates a mutually beneficial situation where vulnerable and
struggling areas in the Arab world are cared for; endowment bodies gain an advantage
over their counterparts as well as valuable media and marketing exposure; the
financial burden on the Government of Dubai to produce funds for educational,
cultural, religious, environmental and welfare projects is alleviated; and the
socio-economic status of the community as a whole is improved.
Considering that 2017 has been
declared as the Year of Giving by His Highness Sheikh Khalifa bin Zayed Al
Nahyan, President of the UAE, the new Endowment Law could not have come at a
more opportune time and will undoubtedly promote higher levels of corporate
social responsibility and lead to the betterment of the community as whole.
When establishing a charity and/or
an endowment Horizons & Co can advise on the appropriate methods. For further
information contact us on 04 354 4444 or email firstname.lastname@example.org.