Charitable sector's role in Oman's development

Observer

2 days ago

In Oman, the charitable sector—comprising voluntary teams, non-profit organisations, waqf-based entities, and government-linked foundations—plays a vital role in driving inclusive economic development. From direct poverty alleviation to support for entrepreneurship, social welfare, and empowerment, charitable organisations contribute significantly to national development strategies outlined in Oman Vision 2040 and national five-year plans.
This article examines the regulatory and institutional landscape, key stakeholders and initiatives, economic development mechanisms, evidence of impact, prevailing challenges, alignment with Vision 2040, and potential future directions.
REGULATORY AND INSTITUTIONAL FRAMEWORK
Legal structure & oversight: In 2024, Oman's Ministry of Social Development (MoSD) introduced new regulations requiring charities to obtain licenses before soliciting public donations. Organisations must maintain transparent records and submit detailed reports within 15 working days after any fundraising campaign. Violations may lead to penalties, license suspension, or revocation.
Government ministries and waqf oversight: The Ministry of Endowments and Religious Affairs (MARA) supervises Islamic charitable mechanisms such as zakat and waqf (endowments). It ensures endowment assets are protected and utilised to support sustainable charitable projects in health, education, and social welfare.
Government-established foundations: MoSD's 2025 launch of the Bait Al Hassan Charitable Foundation reflects a shift toward more structured and strategic philanthropy. It supports education, youth empowerment, and regional development through partnerships with civil society and the private sector.
KEY PLAYERS AND INSTITUTIONAL ACTORS
National charities and volunteer teams: Well-known national NGOs like Dar Al-Atta'a, Al Rahma Association, and Oman Charitable Organisation have long operated across Oman. During the COVID-19 pandemic, they provided crucial support through food distribution, financial aid, and education assistance, often coordinated through volunteer teams.
Corporate-led and CSR-centred funds: The Tawasul Charitable Organisation, founded in the Duqm Special Economic Zone, links CSR initiatives with community development. It funds training centres, vocational programmes, and SME support in underserved areas, bridging corporate capital with social needs.
SME Support via Waqf-Backed Funds: The Ishraq Endowment Investment Fund, introduced in 2024, uses a sustainable waqf model to fund charitable services while investing in growth-oriented sectors. Initial capital of RO 10 million provides a base for Sharia-compliant returns that support educational, medical, and housing assistance.
Dedicated SME development vehicles: Sharakah, established in 1998, blends charitable principles with economic objectives. It provides financing and mentorship to entrepreneurs, supporting job creation and private sector participation in line with national goals.
MECHANISMS: HOW CHARITIES SUPPORT ECONOMIC DEVELOPMENT
Direct poverty alleviation and social welfare: Charities provide essential support—cash transfers, food aid, utility bill payments, and emergency relief. In 2021, RO 3.5 million was mobilised to help families impacted by the pandemic, stabilising livelihoods and preventing deeper poverty.
Financial inclusion and micro-credits: Microfinance initiatives like the Sanad Programme give job seekers and low-income families access to interest-free loans. This supports self-employment and income-generating activities, particularly for youth and women.
Entrepreneurship and youth empowerment: Charities like Bait Al Hassan and Tawasul offer entrepreneurship workshops, business incubators, and mentorship schemes that enable youth and women to launch startups. These programmes also help diversify Oman's economy beyond oil.
Capacity building and skills development: Many charities invest in human capital through vocational training, STEM education, and financial literacy. These initiatives directly align with Vision 2040's human development pillars, ensuring future workforce readiness.
CSR channels and hybrid models: Corporate social responsibility efforts, especially those led by large infrastructure or tourism firms, support community-based initiatives such as artisan training, eco-tourism, and sustainable agriculture, adding an economic layer to charitable goals.
ECONOMIC IMPACTS AND OUTCOMES
Job creation and SME growth: Access to micro-credit, training, and advisory services leads to the launch of thousands of micro-enterprises and SMEs annually. These businesses generate employment, especially in rural and underserved regions.
Poverty reduction and human capital improvement: Education sponsorships, health support, and food security initiatives break the cycle of poverty. By enabling access to essential services, charities help beneficiaries move toward long-term economic self-sufficiency.
Social cohesion and national solidarity: Charities often serve diverse populations, fostering inclusion regardless of gender, age, or economic background. They help reintegrate vulnerable groups—such as the disabled, single mothers, or migrants—into the broader economy.
Supporting economic diversification: Charitable and waqf-based funds channel investment into non-oil sectors like education, healthcare, and agriculture, aiding in the national shift toward a knowledge-based economy.
CHALLENGES FACING THE CHARITABLE SECTOR
The charitable sector is highly dependent on fluctuating donations: During downturns, such as the 2016 austerity phase, many organisations struggled to maintain services.
Sector fragmentation and limited coordination: Oman hosts many small, independent NGOs and volunteer teams. Without coordinated platforms, overlapping efforts reduce efficiency and dilute potential impact.
Capacity and governance deficits: Many organisations lack skilled staff and professional systems to monitor, evaluate, and report on programmes. This limits their ability to attract sustained donor support.
Regulatory burden and compliance issues: While new legal frameworks increase transparency, they also add administrative complexity. Smaller organisations may lack the resources to comply, risking suspension or fines.
Well-known national NGOs like Dar Al-Atta'a, Al Rahma Association, and Oman Charitable Organisation have long operated across Oman.
ALIGNMENT WITH OMAN VISION 2040 & NATIONAL STRATEGIES
Developing human capital: By funding schools, training teachers, and providing scholarships, the charitable sector enhances Oman's educational capacity—central to Vision 2040's goals.
Promoting economic diversification: Waqf investment funds and social entrepreneurship hubs create new income streams outside oil, helping Oman transition toward a more resilient and diversified economy.
Enhancing social protection and inclusion: Charities provide a vital safety net, ensuring that vulnerable populations are supported while being empowered to become active economic contributors.
FUTURE DIRECTIONS AND RECOMMENDATIONS
Scale through digital platforms: Digital tools like Tarabut Gateway and online donation systems should be expanded to unify charity efforts, centralise data, and track impact in real-time.
Strengthen capacity and professionalism: Investing in leadership, training, and organisational systems is crucial. Government and donors should provide institutional support and technical training.
Expand waqf and endowment-based financing: Waqf models offer sustainability and growth. More institutional waqf funds should be established to reduce dependence on annual donations.
Deepen private sector integration: CSR strategies should be embedded in corporate policies, with clear impact metrics. Partnerships between firms and charities amplify social and economic returns.
Focus on women, youth, and marginalised communities: Targeted programmes for women entrepreneurs, rural youth, and persons with disabilities can significantly enhance inclusiveness and innovation.
Improve monitoring, evaluation, and research: Rigorous data collection and analysis are essential. Academic partnerships and government agencies should help develop national charity performance dashboards.
CONCLUSION
Oman's charitable sector is an indispensable pillar of its economic development strategy. Through job creation, SME development, education, and social support, charities make meaningful contributions to the country's Vision 2040. As regulatory frameworks strengthen and new waqf models emerge, the sector stands poised to deepen its impact—provided it addresses fragmentation, enhances professionalism, and continues aligning with national development priorities.