Bonyads ( "Foundation") are charitable trusts in

Iran Iran, officially the Islamic Republic of Iran (IRI) and also known as Persia, is a country in West Asia. It borders Iraq to the west, Turkey, Azerbaijan, and Armenia to the northwest, the Caspian Sea to the north, Turkmenistan to the nort ...

that play a major role in Iran's economy. They control an estimated 20% of Iran's GDP, and are second only to the oil industry in manufacturing, trading, and real estate development in Iran. As of 2010, the largest bonyad is the Mostazafan Foundation, worth approximately $10 billion. In addition to large national bonyads like the Mostazafan Foundation, there are numerous bonyads affiliated with local clerics in "almost every" Iranian town. All are answerable only to the

Supreme Leader of Iran The supreme leader of Iran, also referred to as the supreme leader of the Islamic Revolution, but officially called the supreme leadership authority, is the head of state and the highest political and religious authority of Iran (above the Presi ...

. As of 2008, bonyads employ somewhere between 400,000 and 5 million Iranians. Technically religious charitable organizations, they have evolved into "giant private monopolies with no governmental oversight", and are now described as channeling revenues to groups supporting the Islamic Republic, while providing limited and inadequate charity to the poor. Exempt from taxes and benefiting from "huge subsidies from

government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...

," they have been called "bloated," and "a major weakness of Iran's economy," that siphons off production to the lucrative black market.Mackey, Sandra ''Iranians, Persia, Islam, and the soul of a nation'', New York: Dutton, c1996 (p.370)

Background

Monarchy

Founded as royal foundations by

Shah Shāh (; ) is a royal title meaning "king" in the Persian language.Yarshater, Ehsa, ''Iranian Studies'', vol. XXII, no. 1 (1989) Though chiefly associated with the monarchs of Iran, it was also used to refer to the leaders of numerous Per ...

Mohammad Reza Pahlavi Mohammad Reza Pahlavi (26 October 1919 – 27 July 1980) was the last List of monarchs of Iran, Shah of Iran, ruling from 1941 to 1979. He succeeded his father Reza Shah and ruled the Imperial State of Iran until he was overthrown by the ...

, the original bonyads were criticized for providing a "smokescreen of charity" to patronage, economic control, for-profit wheeling and dealing done with the goal of "keep ngthe Shah in Power." Resembling more a secretive conglomerate than a charitable trust, these bonyads invested heavily in property development, such as the

Kish Island Kish ( ) is a resort island in Bandar Lengeh County, Hormozgan Province, off the southern coast of Iran in the Gulf. The island constitutes the city of Kish, Iran, Kish. Owing to its free trade zone status, the island is marketed as a consumers ...

resort; but the developments' housing and retail was oriented to the middle and upper classes, rather than the poor and needy.

Islamic Republic

After the 1979

Iranian revolution The Iranian Revolution (, ), also known as the 1979 Revolution, or the Islamic Revolution of 1979 (, ) was a series of events that culminated in the overthrow of the Pahlavi dynasty in 1979. The revolution led to the replacement of the Impe ...

, the bonyads were nationalized and renamed with the declared intention of redistributing income to the poor and families of

martyr A martyr (, ''mártys'', 'witness' Word stem, stem , ''martyr-'') is someone who suffers persecution and death for advocating, renouncing, or refusing to renounce or advocate, a religious belief or other cause as demanded by an external party. In ...

s, i.e. those killed in the service of the country. The assets of many Iranians whose ideas or social positions ran contrary to the new Islamic government were also confiscated and given to the bonyads without any compensation. Today, over 100 bonyads exist, and they are criticized for many of the same reasons as their predecessors. They form

tax-exempt Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, redu ...

, government subsidized,

consortium A consortium () is an association of two or more individuals, companies, organizations, or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a ...

s receiving religious donations and answerable directly (and only) to the

. The bonyads are involved in everything from vast

soybean The soybean, soy bean, or soya bean (''Glycine max'') is a species of legume native to East Asia, widely grown for its edible bean. Soy is a staple crop, the world's most grown legume, and an important animal feed. Soy is a key source o ...

and

cotton Cotton (), first recorded in ancient India, is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure ...

fields to

hotel A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality beds, a dresser, a re ...

s to

soft drink A soft drink (see #Terminology, § Terminology for other names) is a class of non-alcoholic drink, usually (but not necessarily) Carbonated water, carbonated, and typically including added Sweetness, sweetener. Flavors used to be Natural flav ...

s to auto-manufacturing to shipping lines. The most prominent, the '' Bonyad-e Mostazafen va Janbazan'', (Foundation for the Oppressed and Disabled), for example, "controls 20% of the country's production of textiles, 40% of soft drinks, two-thirds of all glass products and a dominant share also in tiles, chemicals, tires, foodstuffs." Some economists argue that its chair, and not the Minister of Finance or president of the

Central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

, is considered the most powerful economic post in Iran. In addition to the very large national bonyads, "almost every Iranian town has its own bonyad," affiliated with local clerics. Estimates of how many people the bonyads employ ranges from in excess of 400,000 to "as many as 5 million."Katzman, Kenneth. Iran's Bonyads: Economic Strengths and Weaknesses. 6 Aug 2006
accessed 15-May-2009 Bonyads also play a crucial role in the spread of Iranian influence through extensive transnational and international activities, including philanthropy and commerce as soft power as well as providing hard power support.

Criticism

Bonyads are criticized as an enormously wasteful use of Iran's resources: overstaffed,"Business: A mess; Iranian privatisation", ''The Economist''. London: Jul 21, 2001. Vol. 360, Iss. 8231; pg. 51

corrupt Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...

, and generally unprofitable. In 1999 Mohammad Forouzandeh, a former defense minister, reported that 80% of Iran's Bonyad companies were losing money. Iran's unprotected private sector has difficulty competing with Bonyad companies, whose political connections provide government permits and subsidies which eliminate worries over the need to make a profit in many market sectors. Thus Bonyads, by their very presence, hamper healthy economic

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...

, efficient use of capital and other resources, and growth.

Unification of Iran's social security system

As charity organizations they are supposed to provide

social services Social services are a range of public services intended to provide support and assistance towards particular groups, which commonly include the disadvantaged. Also available amachine-converted HTML They may be provided by individuals, private and i ...

to the poor and the needy; however, bonyads do not fall under Iran's General Accounting Law and, consequently, are not subject to financial audits. Unaccountable to the

Central Bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

governor, the bonyads "jealously guard their books from prying eyes." With this lack of information for over 100 bonyads operating independently, "the government doesn't know what, why, how and to whom this help and assistance is given." Lack of proper oversight and control of these foundations has also hampered the government's efforts in creating a comprehensive, central and unified

social security Welfare spending is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance ...

system in the country, undertaken since 2003. Iran has 12 million people living below the

poverty line The poverty threshold, poverty limit, poverty line, or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for ...

, six million of whom are not supported by any foundation or organization.Tehran Times - Poverty in Iran
So as to clearly distinguish its activities from the formal Social Security Organization (SSO), bonyads would have to be in charge of vocational training centers, rehabilitation centers, socioeconomic centers, all drug-related rehabilitation centers,

cooperative banking Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world. Cooperative banking, as discussed here, includes retail banking carr ...

(while financing these activities with the bonyads large commercial holdings, which then could be

privatized Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...

). The SSO, on the other hand, could have sole responsibility for unemployment-insurance, professional-rehabilitation/training costs, retirement-pensions, disability funds, etc. Rather than charitable organizations, the bonyads have been described as "patronage-oriented holding companies that ensure the channeling of revenues to groups and milieus supporting the regime," but don't help the poor as a class.Roy, Olivier, ''The Failure of Political Islam'' by Olivier Roy, translated by Carol Volk, Harvard University Press, 1994, p.139 Another complaint describes them as having kept to their charitable mission for the first decade of the Islamic Republic, but having "increasingly forsaken their social welfare functions for straightforward commercial activities" since the death of the revolution's founder

Ruhollah Khomeini Ruhollah Musavi Khomeini (17 May 1900 or 24 September 19023 June 1989) was an Iranian revolutionary, politician, political theorist, and religious leader. He was the founder of the Islamic Republic of Iran and the main leader of the Iranian ...

.Millionaire mullahs by Paul Klebnikov, July 7, 2003, ''The Iranian''
Originally printed in ''Forbes'', accessed 15-May-2009 Local city and town bonyad have been accused of sometimes using extortionate techniques to draw the traditional

Shia Shia Islam is the second-largest branch of Islam. It holds that Muhammad designated Ali ibn Abi Talib () as both his political successor (caliph) and as the spiritual leader of the Muslim community (imam). However, his right is understood ...

Islamic 20% khums donations from local business owners.

List of major bonyads

* Mostazafen Foundation of Islamic Revolution, one of the largest welfare organizations, is a semi-public foundation founded in 1979 with the assets of the last

's family. It operates a wide variety of charitable activities with a reported $10 billion in assets (2003). * Astan Quds Razavi (

Imam Reza shrine The Imam Reza shrine (; ) is a Shi'ite shrine, imamzadeh and mausoleum complex, located in Mashhad, in the province of Razavi Khorasan, Iran. The shrine contains the grave of Ali al-Rida, who is regarded as the eighth Imam in Shia Islam. Als ...

Foundation), with $15 billion in assets (2003). * NAJA Cooperation Bonyad * IRGC Cooperation Bonyad * Bonyad Shahid va Omur-e Janbazan (Foundation of Martyrs and Veteran Affairs), one of the biggest with over 100 companies. Provides welfare assistance to families of the

Martyr A martyr (, ''mártys'', 'witness' Word stem, stem , ''martyr-'') is someone who suffers persecution and death for advocating, renouncing, or refusing to renounce or advocate, a religious belief or other cause as demanded by an external party. In ...

s of the

Iran–Iraq War The Iran–Iraq War, also known as the First Gulf War, was an armed conflict between Iran and Iraq that lasted from September 1980 to August 1988. Active hostilities began with the Iraqi invasion of Iran and lasted for nearly eight years, unti ...

. * Pilgrimage Foundation * Housing Foundation * Imam Khomeini Relief Committee, provides sickness, maternity, and work injury benefits to some workers in the private sector. * Bonyad-e-Barekat (Barakat Foundation) * Execution of Imam Khomeini's Order (Setad) has a stake in "nearly every sector of the Iranian economy, including energy, telecommunications, and financial services". It adds to its wealth by confiscating "land and property from opponents of the regime, including political opponents, religious minorities, and exiled Iranians". (Barakat Foundation is a subsidiary of Setad)

References

External links

Imam Khomeiny Relief Foundation

''Bonyad Shahid va Isaar-Garaan'' (Foundation of the Martyrs and the Affairs of Self-Sacrificers)
* ''Bonyad Shahid va Omur-e Janbazan'' (Foundation of Martyrs and Veteran Affairs)
''Bonyad-e Mostazafan va Janbazan'' (Foundation for the Oppressed and Disabled)
* ''Bonyad Panzdah Khordad'' (Foundation of the 15 Khordad)
''Astan Quds Razavi'' (Imam Reza Shrine Foundation)
{{Webarchive, url=https://web.archive.org/web/20080303154414/http://www.aqrazavi.org/ , date=2008-03-03 Economy of Iran Charities based in Iran