By Roula Khalaf

FIVE YEARS AGO, Ruwwad, an organisation started by a group of Jordanian businessmen, ventured into the underprivileged Jabal Al Nathif neighbourhood in Amman offering a helping hand. The elders in the community of about 100,000 Jordanians were sceptical, suspecting political motives behind the generosity. “When we asked what they needed they also gave us a long list of requirements: schools, a bus stop, a healthcare centre, a post office,” recalls Fadi Ghandour, head of Aramex, a courier and logistics company and the main driving force behind Ruwwad. “It took the people two years to accept us . . . But we did it all - we fixed the schools, we opened a clinic, a library and we lobbied the government for a police station. We also gave 300 scholarships for students to attend Jordanian universities.” Traditionally courted by Jordan’s Islamists, whose charitable organisations have proved efficient at providing much-needed social services, Jabal al-Nathif discovered that there were alternatives. “We’re saying we can be active on the ground, we can do it better than anyone, and we want no direct political reward,” says Ghandour.

Ruwwad is a prominent example of an emerging trend in the Arab world — the private sector’s foray into philanthropy and corporate social responsibility. Though the Middle East has a long tradition of Zakat (charitable giving), which is one of the pillars of Islam, governments and Islamist groups have had a monopoly on the sector.

Regimes have sought to control all social activism, but were forced to give in to Islamist charities in part to shore up their own legitimacy. The expansion of Islamist social networks, however, has boosted the popularity of the Islamist opposition, alarming governments and frustrating the more liberal segments of society, including many in the private sector. Given the Arab world’s fast-growing population, high unemployment and a shrinking state ability to provide social services, governments are beginning to recognise the potential of private-sector involvement.

As a study by a new centre for philanthropy at the American University in Cairo noted, businessmen, too, are recognising the importance of giving back to the community and investing wealth socially.

One of the fastest-growing trends, say experts, is in family-owned businesses setting up foundations, a move driven by the elderly founders who might be thinking about their legacy as they hand over to a second generation. Many companies are also starting corporate social responsibility programmes. Private sector involvement, however, continues to be constrained by the absence of a legal and institutional framework.

Yasar Jarar, a partner at PwC in Dubai, says an increasing number of philanthropic initiatives are targeting education. “But we’re still not seeing structured philanthropy, either from the giving side or the receiving side,” he says. “The number-one concern of philanthropists is who to give to and how to avoid corruption, but there are no structures or accountability because governments do not regulate the sector.” Most private-sector initiatives, he explains, are still not strategic in the sense that companies are not engaging in philanthropy in a way that is consistent with their business models. Frederic Sicre, an executive director at Abraaj Capital, the Dubai-based private equity firm that has a programme for educating orphans in the Gaza Strip, says companies are also struggling to define what they want to get involved in. “In this region there is so much to do,” he says. Experts say it is crucial for the development of the sector to create sustainable programmes that can survive in good and bad times.

The challenge of sustainability was at the heart of the social initiative of the Saudi-Egyptian Maghraby family, providers of spectacles and eyewear products. Earlier this decade, the family foundation opened two low-fee hospitals for eye surgery, one in Egypt, the other in Yemen. Amin Al Maghraby, chief executive of the group, says the low-fee hospitals weigh each patient’s ability to pay and never turn anyone away, yet are able to record a profit by sourcing surgical packs more cheaply and running the institutions more efficiently.

To ensure a sufficient flow of patients, the company sends caravans to rural areas with specialists who can perform simple procedures on site and arrange for patients to be transported to the hospitals for cataract operations. Maghraby says the vision of his father, the company founder, was that a sustainable initiative would have to rely on its own resources rather than donations.