Abu Dhabi passes new decision to allow endowments to ‘thrive’

A new resolution has been issued in Abu Dhabi for the establishment and licensing of endowment institutions in the UAE capital as part of efforts to support the country's vision for social development and welfare . The regulation, issued by the Abu Dhabi Department of Economic Development and the Endowments and Minors’ Funds Management Authority (or Awqaf Abu Dhabi), will help enhance endowment structures, support the sustainability of family-owned businesses and advance best practices in endowment management, the Abu Dhabi Media Office said on Monday. An endowment is a donation of money or property to a non-profit organisation, which uses the resulting investment income for a specific purpose. The new resolution introduces a regulatory framework that formalises the endowment sector’s role in socio-economic development. “Endowments have been playing a vital role in the socio-economic development for many decades. Issuing this resolution to establish and license endowment companies in Abu Dhabi aims to provide the suitable frameworks to enable them to grow and thrive,” Rashed Al Blooshi, undersecretary of Added, said. Abu Dhabi passed a new law to establish the Awqaf and Minors Affairs Authority in 2023. In co-ordination with the General Authority of Islamic Affairs and Endowments, the AMAA takes measures to manage endowment affairs in Abu Dhabi, including endowment registration, supervision and the issuing of permits for such institutions in the emirate. The entity also manages, invests, grows and safeguards endowments and minors’ wealth. Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, also launched the Dubai Endowments Strategy in 2023 to support the sector. Awqaf Dubai oversees the implementation of the strategy. Dubai witnessed an 18 per cent annual increase in endowment assets at the end of 2023, representing a combined value of Dh10.3 billion ($2.8 billion), state news agency Wam reported. Awqaf Dubai registered 948 endowments associated with 532 registered contributors that year. The new resolution issued in Abu Dhabi addresses family-owned endowments, and has introduced structured governance for such entities. It provides a framework for the creation and administration of endowment companies, covering aspects such as legal status, permitted activities and licensing requirements, according to the statement. All applications must be approved by Awqaf Abu Dhabi to ensure compliance with current regulations, donor intentions and the grant’s broader objectives. Under the new framework, endowment companies will have the ability to manage private grants, while engaging in commercial activities that support the expansion of endowed assets, maximising both financial returns and social impact. The resolution also introduces monitoring and supervisory mechanisms to enhance governance and accountability within the sector, according to Awqaf Abu Dhabi. It also encourages investments in several sectors such as manufacturing, education, trade, health care, agriculture, culture and innovation, the agency said. This resolution “ensures the continuity of donors’ philanthropic legacies for generations”, said Fahad Al Qassim, director general of Awqaf Abu Dhabi. “The resolution provides donors with the ability to establish independent, legally recognised entities under corporate law, adhering to the highest governance standards and best practices.” It encompasses different types of endowment institutions, including private (family-owned) endowments, charitable endowments and joint endowments. It also allows for the management of endowed shares and equity stakes in commercial enterprises, the statement said. The resolution also aims to attract further investment into the endowment sector. Awqaf Abu Dhabi launched Awqaf Capital, its dedicated investment arm, in December last year.

Abu Dhabi passes new decision to allow endowments to ‘thrive’

New resolution strengthens governance and formalises sector’s role in socio-economic development