Waqf – Make a social impact and earn continuous rewards

Focusing on waqf, lets start by  saying that waqf is important not just for the Muslim but the non-Muslim world too.

  • The influence of waqf on the English trust law is so huge that without waqf, there would not be the English Trust law.

 

  • Verbit states that the “Islamic waqf is not only ‘quite like’ the trust but predated it by at least five hundred years”.

  • Gaudiosi claims that the “Oxford University would seem to represent the quintessential English academic institution. Yet, in its early phases of development, Oxford may have owed much to the Islamic legal institution of waqf”.

The ethos of the Western philanthropy focuses on sympathy, compassion and benevolence towards the disadvantaged and weak, based on humanistic values. Unlike in Western philanthropy whereby the notion of giving is considered as altruistic behaviour and voluntary acts of kindness with a desire to improve well being of others, Islamic philanthropy and charitable acts, like the other Abrahamic religions, is grounded in religious beliefs and teachings.

Traditionally, the Bedouin Arab people are known for their ḍiyāfa (hospitality) and from a traditional point of view, the Bedouin people consider iḥsān (charity/ to do good), khayrāt (good deeds), karāma (generous deeds) and ṣāliḥāt (just deeds), as admirable and respectable qualities (Raja Muhn Alias, 2011). This tradition was embedded in Islamic societies as stated by Bremer (2004, p.5) “Islamic societies have a rich heritage to philanthropic institutions, a heritage that reflects the central place of philanthropy within Islam”.

Since the dawn of Islam, Islamic philanthropy proliferated globally in parallel to the spread of Islam. One of such philanthropic institution is waqf, which is instrumental in funding sophisticated community empowerment initiatives, and has the potential of solving many of the present day challenges such as poverty, sustainability and social justice. Historically, waqf institutions contributed significantly towards shaping the economy of many countries and demonstrated a remarkable tradition of Islamic philanthropy, until the late 19th century.

Waqf is multi-functional and multi-purpose faith based institution. It is like the third sector. It is voluntary act of charity under the label of ṣadaqah and infāq (provisioning). The institution of waqf has played a pivotal role in fulfilling most of the community and social services needs. For centuries, awqāf (endowments) institutions stood strong as financially self-sustainable voluntary charitable public institutions that were legally irreversible and semi-autonomous in their administrative structure (Argun, 2013). The endowment provided a platform through which various public welfare services were provided, to communities and was solely focused on the common-good.

Waqf is designed for the socio-economic development of both the Muslim and non-Muslim communities. It is a system for financing community development (Hodgson, 1974). Waqf provides a socio-economic system whereby the endowed capital is preserved in perpetuity while the income generated from investing the bequeathed capital is used as a perpetual donation for the designated beneficiaries.

 

So what is waqf?
The term waqf is not specifically mentioned either in the Qur’ān or ḥadīth (Prophetic traditions) but Islamic jurists deduced its legitimacy and its rules, primarily from authentic ḥadīth and the sunnah (the way of life prescribed as normative for Muslims on the basis of the teachings and practices of the Prophet Muhammad (SAW)) . Many aḥādīth provide evidence that the establishment of waqf was greatly encouraged by Prophet Muḥammad (SAW), as detailed later in the section entitled waqf during Prophet Muḥammad (SAW)’s era.

Waqf is the endowment of resource in perpetuity and preserving it for the benefit of certain philanthropic acts and prohibiting the use or disposition of it outside the specified objectives of the waqf and the wishes of the endower. From an economic point of view, freezing or holding māl prevents its consumption and provides a continuous extraction of its usufruct for the benefit of the objectives of the waqf.

The social inequality in terms of māl (wealth) distribution is mainly due to unfair circulation of the economic growth within societies. Waqf creates a platform to circulate māl as the poor have the ḥaqq (right) to a share of the economic pie. It can mobilise funds from markets and direct them to welfare institutions for economic development projects. Waqf institutions are designed to provide long term, sustainable solutions to many of the socio-economic needs of the community. They can provide a revenue stream for sustainable income which can help both the Muslim and non-Muslim communities in terms of socio-economic development. These institutions can fulfil the goals of many of the modern economic systems as capital accumulated by donations are channelled to finance social services that can deliver social welfare ranging from education, health care to sustaining centres of research and artistic creation.

Waqf provides a platform whereby assets are gifted as charitable capitals with the aim of investing the endowment in order to generate revenues that can be directed towards helping specified beneficiaries.

Definition of waqf
The word waqf (plural: awqāf) has the same meaning as the Hebrew word ḥabs (plural aḥbās) which can be linguistically translated to mean ‘to stop, to prevent, to restrain’.

Waqf has no equivalent translation in the English language to convey the true meaning (Ahmed & Khan, 1998). Waqf is a unique charitable endowment given away for the purpose of benevolence. These charities must have permanence and continuity so that the beneficiaries can benefit from the waqf for generations or centuries.

Anwar (2017) in her book, re-defined waqf to include social development impact, and defined waqf as: “confinement of a property (whether movable or immovable) by a founder(s) and the dedication of its usufruct in perpetuity for creating social and development impact for the common-good of communities”.

In a simplified version, the term waqf can be translated as ‘endowment’, although this translation does not convey the devotion and grace with which waqf is associated in Islam.

The rationale behind waqf being primarily in the form of immovable assets such as land and buildings is because the definition of waqf represents non-perishable assets that can provide benefits without consuming the endowment through cumulative investment. However, waqf in the form of movable endowment such as money, machinery, farmed animal, books, jewellery, and, so forth are endorsed by the majority of Islamic scholars. (Kahf, 1995 & Argun, 2013)

Historic growth of waqf

  • Waqf grew across the Muslim world simultaneously as Islam shaped and mapped the world after the death of Prophet Muḥammad (SAW).
  • Many scholars label the Ottoman Empire as ‘waqf civilization’, signifying the rich social history focused on poverty alleviation and humanity.
  • By the end of the eighteenth century, approximately, 30,000 people were fed under waqf institutions per day, in Istanbul which had a total population of 700,000.
  • It is estimated that three-fourth of all the fertile land during the Ottoman empire was waqf land. The entire health, education and welfare budget came from its waqf and government spending on the social services towards the community needs was minimal or negligible.
  • White (2006, p.7) reveals that “… waqf agricultural land constituted half of the size of land in Algeria and one-third in Tunisia; and even in the mid-20th century, one-eighth in Egypt”. In 1923 when the Republic of Turkey was formed, “three quarters of the country’s fertile land belonged to awqaf” and “at one point seventy per cent of the land in Delhi was waqf assets
  • The university of Al-Azhar in Egypt was founded on waqf in 972, even before Oxford university.

 

Women and waqf

  •  Many women contributed towards waqf. In fact, the Ottoman Sultanas constructed masājid (mosques), lodges, hospice, and so forth.
  • Women established forty per cent of waqf properties in Istanbul.
  • In the ninth century, Fātima al-Fihrī (d.880) , used her inheritance to construct a masjid (mosque) and the world’s oldest university, the al-Qarawiyyin university in Fes, Morocco. Al-Qarawiyyin University has stood the test of time and after centuries, is still a leading educational centre in the world. It has produced so many renown doctors, engineers, architects, etc who are now even working in the Western world.
  • Fatima’s sister, Maryam al-Fihri also used her inheritance to create a waqf – the Al-Andalus (Andalusian) Masjid in Fes.

 

Fiqh of waqf
The motivation for establishing waqf is grounded in the Islamic faith and is primarily religiously driven, encouraging Muslims to promote maṣlaḥah (public interest) in the charitable domains in order to purity their souls and attain good rewards through the prayers of the beneficiaries of the waqf.

The majority of Islamic jurists consider waqf as ‘recurring charity’ which is another motivation for establishing waqf. Waqf, in the form of ‘perpetual charity’ or ‘ongoing charity’, provides a continuous flow of benefits as long as the original charitable corpus is preserved and maintained.

The establishment of waqf was encouraged by Prophet Muḥammad (SAW), as detailed later in the section entitled ‘waqf during Prophet Muḥammad (SAW)’s era’. A ḥadīth reported by Abu Hurairah states that Prophet Muḥammad (SAW) said that “When a man dies, his acts come to an end, except three things, recurring charity (sadaqah jāriyah), or knowledge (by which people benefit),or pious offspring, who prays for him” (Sahih Muslim, n.d.). Due to the permanent nature of the waqf, it is believed that the rewards of sadaqah jāriah (recurring charity) continues even after death as long as people continue to benefit from the waqf. Waqf repeats the rewards of ṣadaqah due to the nature of waqf’s characteristic of perpetuity. Therefore, a single act of ṣadaqah becomes ṣadaqah jāriah as people continue to benefit from the waqf.

 

Characteristics of waqf
The three salient characteristics of waqf differentiate it, from other Islamic charitable mechanisms, as shown in the figure below, entitled ‘Characteristics of waqf’. First, the Perpetuity of waqf prevents confiscation of the waqf donated property by the government or by individuals (including the endower). This ensures continuity of the provision of social services to beneficiaries of the waqf. Waqf donated properties documented on waqf contract deeds, can only be eliminated under special circumstances and with the approval by the sharī’āh (Islamic law) local court. Second, Irrevocability of waqf ensures that once the endower vows his/her property as waqf, it is irrevocable and his/her heirs cannot change the status of the waqf. This is to prevent the endower or his/her decedents from having any right to take back the endowed property once it is declared as waqf. Finally, Inalienability of waqf ensures that no one can become the owner of a waqf donated property. Once a property is established as waqf, the ownership of the property is transferred to Allah (SWT), and the waqf property becomes a frozen property. From a legal point of view, the endowed property cannot be sold, disposed, mortgaged, gifted, inherited or be subjected to any form of alienation (Abdel Mohsin, 2009).

 

Why is waqf important?

Well the non-inclusion of marginalised and poor individuals in the circulation of wealth has caused rise in poverty levels and gap in wealth between the rich and poor.

  • Waqf is very important as a financing platform for ISE as the growth of ISE is being hampered by the lack of finance available to support social entrepreneurs’ mission of creating both profit and social impact. In fact, the Islamic Banks and Financial institution have neglected the Islamic sprit of communal common-good.
  • Waqf (Islamic endowment) is indeed a vehicle for financing ISE and the waqf-ISE investment model provides an environment that mobilises resources and provides a platform that caters for socio-economic development and poverty alleviation strategies.

 

Some of the applications of waqf

In terms of Waqf and socio economic development,

  • Waqf is designed for the socio-economic development of the communities and is the platform for financing community development.
  • Waqf provides a socio-economic system whereby the endowed capital is preserved while the income generated from investing the donated capital is used for distribution to the designated beneficiaries.

In terms of economic sustainability

  • waqf is not for a temporary period. Waqf is designed to permanently preserve the endowment.
  • Once a waqf is created, the ownership of the waqf is transferred to Allah (SWT)/God.
  • From an Islamic viewpoint, waqf is a far superior form of ṣadaqah (voluntary charitable). It is a ṣadaqah jāriyah which is charity that provides continuous benefits.
    In fact there is
  • A ḥadīth (Prophetic traditions) reported by Abu Hurairah states that Prophet Muḥammad (SAW) said that “When a man dies, his acts come to an end, except three things, recurring charity (sadaqah jāriyah), or knowledge (by which people benefit),or pious offspring, who prays for him” (Sahih Muslim, n.d.).

Now in terms of Waqf and Poverty alleviation

  • Islam teaches that wealth cannot be hoarded by a few rich people which is the cause of the growing inequality gaps in wealth between the rich and poor.
  • Therefore, a healthy and balanced economic system requires the circulation of wealth and a distribution of the economic pie for everyone.
  • Waqf considers wealth as a tool for the economic circulation of surplus from the rich to the poor in order to prevent inequality between the rich and poor.

In terms of Waqf and employment

  • Waqf was a significant provider of employment during Ottoman times.
  • In 1931 the ratio of people employed by waqf institutions to those employed by the state of Turkey, was approximately forty per cent to sixty per cent.
  • By the end of the Ottoman rule, waqf funded 12 per cent of the total wages for people employed in the public sector, and this number rose to 15 per cent during the early republican period.

 

For more knowledge on waqf, please refer chapter 2 of the book entitled: “Waqf (Endowment): A Vehicle for Islamic Social Entrepreneurship”. Please click here for details on the book.