The government’s significant role in the domestic economy, and the sizeable fiscal spending that underwrites much of the UAE’s infrastructural development, sometimes obscures another important facet of the nation’s economic development. The role played by charitable organisations in the UAE is a prominent one, and a wide array of institutions with a social development mandate – targeting populations both at home and abroad – operate within the emirate.
A Jump In Donations
A strong and well-managed economy has brought the citizens of the UAE a high degree of economic well-being, with gross national income per capita standing at $41,980 in 2011, according to the World Bank. A per-capita disposable income figure of $26,000 in 2012 is 18 times higher than the regional average, according to Euromonitor International, and more in line with Western European markets such as the UK. Charities have been one of the principal beneficiaries of the population’s considerable spending power. According to the World Giving Index 2012, a report compiled by Charities Aid Foundation (CAF), individuals in the UAE were able to continue making charitable donations during the global economic downturn of 2008-09, a time when donations at a global level fell. The percentage of people giving money in the UAE rose from 40% in 2010 to 45% in 2011, and in 2012 the nation was the 37th-most-charitable country in the world, and third behind only Qatar and Oman in the GCC region. The CAF’s report is based on information collected by polling company Gallup, taking into consideration the answers to three questions: within the last month, did you donate money to a charity?, volunteer time at an organisation?, or help a stranger? The most recent poll results showed that 47%, 12% and 55% of respondents in the UAE answered yes to these questions, respectively, yielding an aggregate score of 38%, which represented an improvement of one percentage point compared to the previous year.
The impact of charity activity on the local economy varies from one organisation to another, and much of the funding raised within the UAE is destined for work in other parts of the world. One of the most prominent examples of a locally based charity with international reach is the Zayed bin Sultan Al Nahyan Charitable and Humanitarian Foundation, the body established by the former president of the UAE to support the building of mosques, cultural centres, schools and institutes of higher education, and health care facilities. Its mandate gives it both domestic and international reach.
In Yemen, the foundation has established the Zayed Hospital for Mother and Child, which, with a completion cost of $6m and a 130-bed capacity, is one of the most significant aid-funded developments in the Arab world in recent times. In Africa, it has worked in Chad, Mali, Egypt and the Gambia to establish four colleges to teach Arabic, Islamic studies, and administrative and legislative sciences. The foundation has also helped to boost sustainable development in a further 10 African countries with the Zayed Welfare Water Wells programme, an initiative which echoes the environmental concerns behind its funding of a chair for environmental sciences at the University of Bahrain. The organisation has also been active in Europe, where it has undertaken initiatives aimed at assisting in the resettlement of Bosnian refugees in Bosnia Herzegovina. These include the Housing Reconstruction Project, the Small Loans Project, Ambulances Project, the Cows Ownership Project and the $4m Cultural Centres Project.
However, while international aid plays an important part in the overall charity landscape in the UAE, the local economy also benefits greatly from the work of social development organisations based in the country. Many of the Zayed Foundation’s projects are launched within the UAE’s borders, and are largely concentrated in the fields of health, education and environment. One of the most high profile of these in recent years is the foundation’s construction of social service centres for the elderly and people with special needs in Ajman, Umm Al Quwain and Fujairah at a cost of Dh60m ($16.3m). The organisation has also established a number of permanent programmes, centred on health care, education and assistance to individuals wishing to perform a pilgrimage to Mecca, and in 2011 alone the foundation provided Dh750,000 ($204,150) for university scholarships in the UAE.
The UAE also benefits from a long-established tradition of faith-based developmental funding common across the Arab world. The Abu Dhabi-based General Authority of Islamic Affairs and Endowments (GAIAE) provides a central point of coordination for this effort. Established in 2006 by presidential decree, the authority has quickly become a leading institution in the promotion of social and religious awareness. The GAIAE is tasked with several areas of responsibility, including the construction and maintenance of mosques and Quran memorisation centres, organising hajj and umrah affairs, and investing awqaf (religious endowments) for the good of society.
The awqaf model is an intrinsically stable method of investing in society for the long term. Usually arising from a gift of money, real estate or some other non-perishable property, a waqf (the singular form) is generally attached to a specified charitable purpose. The disbursement of the funds is made according to the wishes of the donor, and once created can never be donated as a gift, inherited or sold.
The primary responsibility of the GAIAE is to manage the affairs of awqaf, register their assets and develop their investments. To this end, the GAIAE holds a large number of waqf properties in Abu Dhabi and across the wider UAE. Proceeds from these investments are used to finance religious, health and education projects, as well as give support to the poor and provide community services. Since 2009, revenues from GAIAE’s waqf projects have more than doubled, according to public statements by officials of the organisation, helping it to establish a number of large-scale infrastructural projects.
In June 2013, the GAIAE signed a Dh33m ($9m) construction contract to build a residential and commercial centre in the Asharej area of Al Ain. The development, which includes basement parking, a ground floor and mezzanine retail area, and a first floor residential component comprised of 28 apartments, spans 8000 sq metres and is expected to be completed by October 2014. Once operational, the new centre is expected to provide an annual return of Dh4.5m ($1.2m), which will in turn be invested in waqf funds for future development programmes.
Keeping With The Times
Key to the GAIAE’s success to date has been its ability to tap into the generosity of the nation’s population, and recent years have seen the organisation take steps to increase its points of contact with potential donors. Residents of the UAE are now able to donate up to Dh200 ($54) by sending a blank SMS to a predefined number, while donors can visit the GAIAE website to register any type of endowment electronically.
In July 2013 the organisation inked an agreement with Abu Dhabi Commercial Bank, by which the lender will supply it with 57 wireless point-of-service devices enabling individuals to donate using their debit or credit cards at locations that previously were only equipped to handle cash or cheques. Through the new terminals, the GAIAE will be able to effectively monitor the flow of donations and receive standardised reports that will allow for a quick and accurate audit of non-cash transactions.
The organisation has also increasingly turned to social media to publicise its programmes, a step that has allowed it to reduce its overall publicity spending by 85%. Like any other competitive organisation, the pursuit of cost efficiencies is an ongoing process at the GAIAE, and one that, in this case, has directly applicable benefits for the UAE’s inhabitants.
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