Prof. Habib Ahmed

Durham University, UK

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Agenda● Waqf: From Past to Present

● In Search for Efficiency

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Introduction• The voluntary sector is increasingly playing an important

role providing many social goods and services• Third sector is increasingly playing an important role (1999-$1.1 trill.,

4.6% GDP in 22 countries)• Islam instituted the institution of waqf—historically

played a very important role• Historically waqf played a significant role in providing

social and public goods• Recent expansion of the third sector has not included

growth of waqf institutions

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Waqf-Introduction● Waqf—”Stand still, hold still, not to let go”

(Maliki- habs)● Voluntary act of charity—sadaqah jariyah● Hadith:

“When a child of Adam dies, his/her deed comes to anend except for three things: a continuous sadaqah,knowledge that benefits (others) and a righteous childwho prays for him/her.”

[Muslim, Tirmithi, Abu Dawud, Nasa’i and Ibn Majah ]

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Waqf—Features● Founder (waqif) through the waqf deed

determines:● Objectives for which waqf is created—birr (cannot

violate principles of Shari’ah)● Way(s) its revenues/fruits/services can be used● Management process and procedures of succession of

managers (mutawalli)● “…as if ownership belongs to God”

TypeBeneficiaries

Religious Philanthropic

Family(ahli or khass)

A B

General Public(khayri or aam)

C D

• Type A—Not too common (graveyards, tombs)• Type B—Waqf for family members• Type C –Mosques, cemetery, etc.• Type D—Waqf for providing social services and

enhancing general welfare

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Potential of Waqf in Enhancing Welfare

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Waqf—Historical Experience● The first waqf created by the Prophet (PBUH) was

Masjid in Medinah● Other than these, the first known awqaf were established

for social purposes● Umar bin Khattab—land of Khaybar● Uthman bin Affan—well in Madinah● Thereafter many different kinds of waqf were created● Public utilities, education and research, health care, etc.● Property, cash, grains for seeds, etc.

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Waqf—Historical Experience (2)● At the dissolution of Ottoman empire—¾ of the

land and buildings in some Turkish towns wereawqaf

● In some Muslim countries awqaf reached 1/3rd ormore of cultivable land

● At the beginning of 20th century● In Palestine, 233 waqf deeds recorded (owning 890

properties) compared to 92 private ownership deeds(with 108 properties)

● al Quds had 64 operating schools supported by awqaf(more than the no. of mosques)

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Awqaf during Contemporary Times—Status

● Due to different reasons, awqaf have degeneratednow—both as a concept and in practice

● The concept of waqf is corrupted:● Waqf is only for religious purposes● Waqf can be established in real estate only ● Lack of awareness that waqf can be productive

asset/organization used for philanthropic purposes

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Awqaf during Contemporary Times—Practice

● In practice—many awqaf have becomeunproductive assets

● Most waqf are created for religious purposes● Lack of institutional/organizational development● Management—inefficient mutawallis or

government● Many waqf assets lost● Not too many new social waqf are created

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Types of Waqf in Karnataka state. IndiaType Number PercentageMosques 7315 32.9Graveyards 5419 24.3Tombs (mazaar) 6626 29.8Ashoor Khanas 2907 13.0Total 22267

● Most of the awqaf are religious (types A and C)● No social waqf (type D)

Concept of waqf as a tool for social development is absent

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Causes of Decline of Waqf• Rigidity and unresponsiveness of the legal doctrine

of waqf to changing socio-economic conditions• Supremacy given to the waqf deed and the

irrevocability of the waqf.• Operational inflexibility limits the ability of

mutawallis to undertake operational changes thatmight enhance productivity and efficiency

• Lack of organizational development

World Giving Index 2011Charities Aid Foundation WGI has three components: % givingmoney, % volunteering time, and % helping a stranger

Region WGI Index %Australasia 58North America 57

Western & Southern Europe 40South Eastern Asia 37Southern Asia 37South America & Caribbean 33Western Asia/Middle East 32Northern Africa 31

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World Giving Index 2011Charities Aid Foundation WGI has three components: % givingmoney, % volunteering time, and % helping a stranger

Country WGI Index % WGI RankingUSA 60 1Ireland 59 2Australia 58 3New Zealand 57 4

United Kingdom 57 5Morocco 48 12Qatar 45 19Saudi Arabia 35 57Indonesia 37 49

Malaysia 29 87

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Agenda● Waqf: From Past to Present

● In Search for Efficiency

Waqf during contemporary times • To revive waqf, there is need to examine

various aspects of the organizationalarchitecture

• Organizational Type & Legal Status• Governance and Management• Input Types• Output Type• Income Generating Process

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Waqf—Management Issues• One of the reasons of decline of waqf was mismanagement

by mutawallis• The response of mismanagement was that the governments

took over• In most countries the experience has not been good (mis-

management and corruption)• Approaches to managing waqf

• Public bodies• Private entities

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Management :Public Bodies• Management by government bodies/ministries

• Most cases have not been efficient• Management by specialized public institutions—some

cases of good management• Johor—MAIJ• Kuwait—KAPF• Singapore—MUIS

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Waqf Management in Johor• Like all other states, State Islamic Religious Council

(MAIJ) manages waqf in the State of Johor• Johor Corporation (Jcorp) manages the waqf assets of

MAIJ• Waqf certificates launched by MAIJ

• First project by using cash waqf—RM $4 ml. 6 storied building in1995

• Rental income until 2005 was RM 1.2 ml.• First waqf-based hospital established in 2006—AnNur

hospitals/clinics has expanded to other states• An-Nur Plaza Kotaraya Mosque—mosque cum shopping

centre

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Private Entities• Specialized corporate entities can provide

various services for fees/compensation• Reasons of using corporate entities• Permanence— Ensures continuity and permanence (in case

of death or disability of donor)• Expertise— Ensure professional and expert management

of the assets• Objectivity—administration without any bias

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Organizations Providing ManagementServicesTwo major types:

• Banks and financial institutions• Department—some banks offer trust services• Subsidiary—many major banks have trust subsidiaries

• Example: Waqf Trust Services Ltd (UAE)—owned by DubaiIslamic Bank & DIFC Investments LLC (July 07)

• Independent Companies• Example: Amanah Raya Malaysia—provide both conventional

and Islamic trust services

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Services Provided by Waqf Management Companies

• Services of Trustee/Mutawalli• Custody Services• Estate Management Services• Investment Management Services• Securities/Fund Services• Advisory Services

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Services Provided by Management Companiesto different Sectors

Services Personal/Private

Corporate Charitable

1. Services of Trustee X X X

2. Custody Services X X X

3. Estate ManagementServices

X X

4. Investment ManagementServices

X X X

5. Securities/Fund Services X

6. Advisory Services X X X0

Thank You!

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