Today, social inclusivity and economic as well as environmental sustainability are at the heart of global discussions. However, one aspect that is often overlooked is the management of minors’ funds.
Minors, who due to unfortunate circumstances are left to face challenges, have a helping hand in the form of Minors’ Funds operated by organisations such as Awqaf Abu Dhabi, with the goal of securing their future.
As the apex entity managing the UAE’s endowments and minors’ funds, Awqaf Abu Dhabi provides a model of how such management should be conducted. The organisation’s approach protects the financial interests of minors until they are old enough to manage funds alone, and contributes to broader societal goals of inclusivity and sustainability.
In fact, one of the core responsibilities of the managers of minors’ funds is to act as custodians of the minors referred to by the courts, with a custodian appointed to look after them and the expenses after due diligence. Ensuring the financial well-being of the minors, keeping funds safe and helping it grow, minors’ fund management includes investing in safe options to maximise profit and minimise or eradicate loss.
In fact, this financial guardianship plays a pivotal role in shaping the future of vulnerable youth and, by extension, the society, as youth are the backbone of the community and ensuring their well-being from an early stage is a social imperative.
There are three core areas where minors’ funds management is of critical value.
First is the emphasis on financial security. When minors’ funds are properly and scientifically managed, we can ensure that they have financial security, and access to resources when they reach adulthood.
Second is the importance of social inclusivity. By focusing on the financial security of minors, societies can promote inclusivity, as they are assured of a secure future that fosters in them a sense of belonging and opportunity.
Third is the long-term economic sustainability. Effective management of minors’ funds drive sustainable returns, allowing funds to grow over time. This benefits individual minors and contributes to the overall economic prosperity of communities.
There are several examples from around the world that underscore the importance of managing minors’ funds. For example, in the US, the Uniform Transfers to Minors Act - or UTMA - provides a framework for managing minors’ assets. According to the National Conference of State Legislatures, the states have adopted some form of the UTMA, underlining its recognition as a crucial tool for protecting minors’ financial interests. The US Department of Education has also pointed out that this initiative has helped millions of children access educational opportunities that would otherwise be out of reach.
Other global examples include the Government Pension Fund of Norway, which sets aside funds for children’s welfare programmes, while the South Africa Child Support Grant has contributed to reducing poverty rates.
In the Islamic world, the concept of guardianship of minors’ wealth is deeply rooted in religious and cultural traditions. According to the Islamic Financial Services Board, a significant portion of Islamic finance assets are dedicated to wealth management, including minors’ funds. This reflects the growing recognition of the importance of the financial stewardship of minors’ funds in the Arab world.
For people in the Arab world and beyond, gaining an understanding and supporting comprehensive minors’ funds management is crucial, as it is not only about financial security but also about creating a more equitable and sustainable future.
By ensuring that the next generation has the resources and knowledge to thrive, we are investing in the stability and prosperity of our societies. To further strengthen the support to these noble initiatives, it is important for all stakeholders, including government entities, civil society organisations, the private sector and individuals, to collaborate and extend their commitment to agencies that work towards protecting minors’ interests.
The management of minors’ funds is far more than a financial exercise. It is a remarkable tool for promoting social inclusivity, ensuring sustainability, and shaping the future of our societies.
As the world faces challenges ranging from economic inequality to climate change impact, effective minors’ funds management helps protect the financial future of our youth, and in turn, protect the future of our coming generations.
