Current Status

Behind — The nonprofit sector’s contribution to GDP remains well below the 5 per cent target, estimated at approximately 1.5 to 2 per cent in 2024. While institutional reforms have created a more enabling environment, the structural transformation required to reach 5 per cent remains substantial.

Key Metrics

Trend Analysis

Saudi Arabia’s nonprofit sector has undergone significant institutional reform since 2016 but remains far from the ambitious 5 per cent GDP contribution target. The sector historically operated under restrictive regulations that limited organizational formation, funding, and scope of activities. The Vision 2030 assessment identified the third sector as a critical pillar of social development, and reforms have sought to create an enabling environment comparable to the nonprofit ecosystems in the US (where the sector contributes approximately 6 per cent of GDP) or the UK (approximately 5 per cent).

The establishment of the National Centre for the Non-Profit Sector (NCNP) provided institutional leadership and regulatory reform. New regulations simplified the establishment of nonprofits, expanded permissible activities, and introduced governance standards. The number of registered nonprofits has grown from approximately 1,500 in 2016 to over 3,500 by 2024, spanning social services, education, healthcare, environmental protection, arts and culture, and community development. Endowment (waqf) reform has been a significant enabler, with the General Authority for Awqaf modernising the management of Islamic endowments to generate greater income for social purposes.

However, the GDP contribution metric reveals the gap between institutional reform and economic scale. At 1.5 to 2 per cent, the sector generates approximately SAR 50 to 65 billion in value-added — meaningful but far from the SAR 165 billion (5 per cent of projected 2030 GDP) that the target implies. The structural challenges include a limited tradition of institutional philanthropy at scale, the dependence of many nonprofits on government grants rather than diversified revenue, and workforce capacity constraints. The sector employs approximately 70,000 workers — a figure that would need to grow to over 300,000 to support a 5 per cent GDP contribution, based on international benchmarks.

Methodology

Nonprofit sector GDP contribution is estimated through a combination of nonprofit financial reporting data (collected by NCNP), national accounts satellite account methodology, and survey-based estimation. The methodology follows the UN Handbook on Nonprofit Institutions in the System of National Accounts, which measures the sector’s value-added through compensation of employees, intermediate consumption, and imputed value of volunteer labour. The measurement is complicated by the informal nature of many smaller nonprofits and the challenge of valuing volunteer contributions. The General Authority for Statistics is developing a dedicated nonprofit satellite account to improve measurement accuracy, but current estimates carry significant uncertainty margins.

Related Priorities

The nonprofit sector target connects to Vision 2030’s broader social development agenda. It supports the nonprofit sector priority and the Volunteers KPI by creating institutional structures for volunteer engagement. It contributes to the World Happiness Index through social support and community development activities. The sector’s growth supports employment diversification and provides alternative career paths for Saudis. The development of a vibrant nonprofit sector is also viewed as supporting social cohesion and civic engagement objectives that underpin the Kingdom’s long-term social stability.

Outlook

Reaching 5 per cent of GDP by 2030 would require the nonprofit sector to grow at approximately 25 per cent annually in real terms — an exceptionally high rate that implies a fundamental restructuring of Saudi social economy. The Vanderbilt Portfolio considers this target among the most challenging in Vision 2030, with a central-case projection of 2.5 to 3.5 per cent by 2030. Key accelerators could include large-scale waqf reform (Saudi Arabia’s endowed assets are estimated at over SAR 350 billion, but utilisation rates are low), the expansion of social enterprise models, and increased government contracting with nonprofits for service delivery.

The 5 per cent target may be more appropriately viewed as a long-term aspiration rather than a 2030 deadline. The institutional foundations being laid now — regulatory reform, governance standards, workforce development, and endowment modernisation — are necessary preconditions for eventual scale. The trajectory is positive, but the timeline to 5 per cent likely extends into the mid-2030s.