Waqf in Islam (Endowments)

Waqf (referred as pious endowments) long held a crucial place in the political, economic, and
social life of the Islamic world. Waqf were major sources of education, health care, and
employment; they shaped the city and contributed to the upkeep of religious edifices. They
constituted a major resource, and their status was at stake in repeated struggles to impose
competing definitions of legitimacy and community. Closer examination of the diverse legal,
institutional, and practical aspects of waqf in different regions and communities is necessary
to a deeper understanding of their dynamism and resilience.

Generally they had to consist two main elements, first; a source of revenue, such as a
building, land, public bath, a warehouse etc.; and second; a beneficiary, such as a mosque, a
hospital, the poor, members of the founders family, freed slaves, or any other recipient of the
founders choosing. Usually the asset given as waqf are benefits the society, community and
the public. To be valid, a waqf had to consist of an object or objects originally held in full
property; the founder had to be of sound mind and body, and able to dedicate the property
in question to God. The waqf had to be permanent, which meant that the revenue it
generated had to be renewable, the property had to be subject to renewal or renovation, and
the founder had to stipulate means of ensuring the perpetuity of the waqf and the continual
disbursement of its revenues.

The components of waqf are Waqif (donor), Mauquf (assets/objects to be waqf), Mauquf
Alaih (beneficiary), Sighah (manifest intention to the contract) by Ijab and Qabul (offer &
acceptance), Waqf mutawalli (trustee) for Waqf Al Wasiyyah.

History and early establishment

Waqf institutions (endowment foundations) have been long established and successful in
many Middle East countries such as Egypt, Syria, Palestine, Turkey, and Anatolia, and also in
South Africa.

In Malaysia, State Islamic Religious Council (SIRC) or (Majlis) is a sole trustee or a

mutawalli in any waqf arrangement. Majlis refers to the body constituted under the provisions
of the Islamic Administrative legislation of each state as passed by their respective Legislative
Assemblies and for the Federal Territories of Kuala Lumpur, Labuan and Putrajaya.

Majlis is an authority body in every state assigned by the Rulers of the states (called as
Sultan) respectively to govern a religious related matters. Since waqf is under religious matter
of the states, therefore, for the purpose of standardization and uniformity of the operation,
the role of trustee or Mutawallis is totally parked under the custodian of the Majlis.

Corporate Waqf
Corporate waqf is an innovative adaptation of the Islamic waqf institution that can be made a
key organisational strategy to translate the business jihad energy into real and sustainable
business and economic success. It is a creative and innovative act to use the waqf concept
and apply it to achieve business and corporate objectives.

The waqf need to be privatised by returning their assets to private management by creating
waqf boards of trustees. They will help managing the assets of waqf in a professional manner.
Apart from that, there is also a need a complete revitalisation of the management of waqf
especially, immovable assets of waqf, in order to fulfil two objectives: (i) to increase the
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efficiency and productivity of the waqf properties; and (ii) to minimise fraudulous practices
and corruption by the mutawalli/waqf managers. Furthermore, there is also a need to provide
a new style of management that suits the waqf institutions, keeping in mind that their
properties are not owned by those who manage them.

Difference between Conventional and Corporate Waqf:

Conventional Waqf

Corporate Waqf
Not only individual, private

Waqif

Mostly individual

corporation or GLCs can be part of

the waqif.

Mutawalli

Mainly individual and the court

Usually limit itself within charitable

Activities

or pious activities or limited

businesses

Mutawalli can be a company

With resources in its disposal may
spread its wing to venture to
sustainable business and corporate
activities.

With effective and efficient corporate-style of management, waqf may have better chance to
produce high and sustainable return to beneficiaries.

In short, corporate waqf is an effort to revive waqf role by inserting the efficiency of
corporate mechanism.

Type of waqf
Essentially there are two types of waqf; Specific waqf and General waqf. Specific waqf also
known as waqf khas is where the donor declare beforehand what is the purpose of the waqf,
for example, build of a mosque or school or for any other purpose he specifies. The purpose
will then be specified in a waqf deed and the manager (mutawalli) who is entrusted to
administer the waqf as specified by the deed. General waqf on the other hand, is an open
ended waqf where the manager of the waqf may use the waqf properties for whatever
purpose as long as it benefits the public and the purpose is not against the Shariah
principles.

The Fatwa Decision

SELANGOR FATWA

Gains from the Saham Wakaf Selangor Scheme must be used for the purchase of permanent
assets. While money from waqf benefits may be used to provide aid and other expenses
deemed appropriately the Selangor Islamic Religious Council.

NATIONAL FATWA

Wakaf in the form of money is allowed in Islam.

Source: http://www.wakafselangor.gov.my/en2/index.php/2012-04-27-03-02-07/fatwa-decision

General Duties and Responsibilities of Mutawalli (Trustee)

Waqf manager and his/her responsibility is to administer that waqf property to the
best interest of the beneficiaries and then to maximize the revenues of the
beneficiaries.
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A mutawalli will monitor a waqf property in a proper way to ensure the continuity of
the existence of the assets and the beneficiaries will continue gain the manfaah of
the said property.

A mutawalli is not only a waqf keeper but he is also responsible to act in a corporate
style in order to increase the value of the assets and to enhance the cash inflow of
the institution and thus will maximise the revenues of the beneficiaries.

The State Islamic Religious Council was appointed by the states enactment governing the
Islamic affairs as the sole trustee of the waqf property for the purpose of improve the
efficiency and effectiveness of the management of waqf. SIRC are provided with the authority
to appoint any individual or a committee to act as its representative to execute the
administrative duties of the trusteeship of the waqf property.

As outlined by Siraj (2012), the main responsibilities, role and functions of SIRC as a trustee
on waqfs are:

To ensure that the waqf property manage and administer by them is being used,
spend or utilised in accordance to the purpose and terms and conditions set out by
the waqif. All the relevant documents in relation to the waqf property shall be in the
safe keeping of the SIRC. If the waqf property is involving land, SIRC shall be
responsible to transfer the rights of ownership from the waqif to SIRC and to
maintain the waqf land or building.

To safeguard of the waqf property where the SIRC may develop and apply specific
laws, rules and procedures to govern the management and administration of waqf
property both on the administrative and financial aspects.

To develop the waqf property manages and administer by them. The SIRC is
responsible to find investors or to create a joint development with an investor, to
develop the waqf property in accordance to the terms and conditions sets by the
waqif when he created the waqf.

Reporting of the performance of the waqf management. Asserted that the lack of
transparency in the management of waqf contributed to the lack of public confidence
to endow their assets and funds as waqf. Each state enactment states the requirement
to produce relevant financial statements and accounts mainly for the purpose of
auditing and reporting (gazetting).

Development of Waqf in Malaysia

Institution / Project
Yayasan
(YWM)

Waqaf

Information
Malaysia

https://www.ywm.gov.my/home
Officially formed by Jabatan Wakaf, Zakat & Haji (JAWHAR),
PM Department in 2008. Developing and promoting the
waqf property and assets throughout the country with
cooperation from State Islamic Religious Council (SIRC) as
the sole trustee of awqaf at state level.

Board of Trustees: Chaired by the Minister in the Prime

Minister

Department

and

its

membership

consist

of

representatives of each SIRC. Responsible for approving

groundwork and policies of YWM.

Formed a subsidiary, Perbadanan Wakaf Nasional Berhad in

2015 as implementers to the corporate waqf programmes
with support and collaboration with all SIRC.
Perbadanan Waqaf Selangor

http://www.wakafselangor.gov.my/en2/

(PWS)

Established in 2011 by Majlis Agama Islam Selangor (MAIS)

under the provision of the Administration of the Religion of
Islam (State of Selangor) enactment by the approval from
Sultan of Selangor. Source of authority from the Islamic
Religious

and

Waqf

Enactments

of

Selangor,

and

establishment Command of the PWS with objectives to

increase management of waqf property and inculcate the
waqf practice.

Introduced Cash-based waqf via PWS Corporate Associates

(Sahabat Korporat PWS) programme by inviting GLCs,
private and corporate sectors to appreciate and practise
waqf and contribute in developing waqf property; to present
the corporate and private sectors as icons for Muslims in
nurturing the practice of waqf; and to make the instrument

of waqf a CSR for Muslims.

Perbadanan Waqaf Negeri

http://www.wakafnegerisembilan.com/

Sembilan Berhad (PWNS)

Established in 2005 and owned by MAINS Holdings Sdn.

Bhd., a corporation under MAIN Negeri Sembilan.
Source

of

power:

State

waqf

Enactment

&

State

administration Enactments.
PWNS roles in carrying out waqf management within the
state in organised and professional manner. Become the first
state introduce Corporate waqf in Malaysia.
Waqaf

An-Nur

Corporation

Berhad (WANCorp)

Established by Johor Corporation Group of Companies to

manage the assets and shares of endowed for waqf.
Managed 1 Waqaf An-Nur Hospital & 21 Clinics. Other
projects, Waqaf Brigade and Waqaf Dana Niaga. These
projects

basically

with

cooperation

from

SIRCs

and

supported by the companies group.

Waqaf Selangor-Mualamat

http://www.wakafselangor.muamalat.com.my
Collaboration project between Bank Muamalat Malaysia Bhd
and Perbadanan Waqaf Selangor. Cooperate through Joint
Management

Committee

from

both

organisation

key

persons to manage waqf funds received from individual and

corporation

as

together.

Funds

specifically

used

for

healthcare and education and invested according to Shariah

principle.
Saham Waqaf Johor

http://www.e-wakafjohor.gov.my/v2/

A scheme for Muslims community to buy waqf shares from

RM10 per unit through MAIN Johor. All donations received
will be used and concentrated for the Muslims needs.
MAIN Johor to manage and administer the waqf fund as the
Trustee and; as a trustee of the assets donated by Muslims
for certain purposes.
Al-Waqf Lil-Hayah

http://wakaf.org.my/bi/index.php?lang=en
A religious endowment programme under Islamic Aid
Malaysia (IAM). IAM in its effort to raise funds to help
finance the construction of Islamic Aid Malaysias Residential
Complex for Orphans and the Poor which is located at
Kubang Pasu, Kedah. Appointing advisors i.e. Ustaz Ghazali
bin Ibrahim and Ustaz Tuan Asmawi Tuan Umar. Essentially
an endowment for life project aimed at encouraging
Muslims to practice virtuous religious attributes by donating
cash contribution.

As-Salihin Trustee Berhad

http://www.as-salihin.com/en/products-services/family/wakaf
Provide waqf services such as advice on formation of waqf
and preparation of waqf agreements. Focusing waqf for
retail clients i.e. individual and families.

Figure: Organisational Structure of Waqf Institution in Malaysia

Source: Muhammad (2010)

Securities Commission (SC) Guidelines

The SC has taken a number of initiatives to explore effective ways to revive the role of Waqf
in economic and social development through the ICM. Various key issues surrounding the
development of waqf assets and its potential were discussed among policy makers, senior
industry practitioners, Shariah scholars and academia. The book Waqf Assets: Development,
Governance and the Role of Islamic Capital Market is made possible by the collective effort
of staff members of the SC. Parts of the book have been extracted from the deliberations
during the SC-OCIS Roundtable. The book focuses on leveraging Islamic capital market to
enhance the development of waqf assets. It serves as a guide for interested parties who wish
to explore opportunities of developing waqf assets through the Islamic capital market and
provides recommendations on governance best practices.

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About the Book: The growing focus on waqf is in line with overall efforts to identify new
growth drivers to broaden and strengthen the development of the Islamic finance industry.
With Islamic finance gaining traction across many parts of the world, the development of
waqf can play a significant role in attracting greater interest and participation in the Islamic
finance industry and indeed entrenching Islamic finance activities This publication is intended
to serve as a guide for waqf institutions, religious bodies, practitioners and other interested
parties who wish to explore opportunities in developing waqf assets through the Islamic
capital market and provide recommendations on governance best practices for waqf
institutions that intend to undertake Islamic capital market related activities specifically for
fundraising and investment.

The book is priced at RM80 per copy. For every purchase, RM20 will be donated to initiatives
supporting waqf development. To purchase please contact: SIDC Bookshop, Ground Floor, Securities
Commission Malaysia, 3 Persiaran Bukit Kiara, Bukit Kiara, Kuala Lumpur. Tel: +006 036204 8665; +006
036204 8644 Email: sidc@sidc.com.my
Further

info:

http://www.sc.com.my/waqf-assets-development-governance-and-the-role-of-islamic-

capital-market-book/

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Conclusion
Corporate waqf is seen to be able to generate higher return on the undeveloped waqf
properties. Previously mentioned, Johor Corporation (Jcorp) through Waqaf An Nur
Corporation (WANcorp) is a proven success in its development of extensive programs for the
benefit of the ummah.

From the findings in Malaysian practise, there is no specific requirement or guidelines by the
relevant authorities on waqf in Malaysia. Although trustees must be appointed to administer a
waqf, the various Islamic Administration enactments throughout the country now mandate
that only State Islamic Statutory authorities or Majlis Agama Islam Negeri may act as such.
Bank Muamalat Malaysia Berhad is the first banking institution carrying out cooperation in
the management of waqf funds with States Islamic Council of Selangor through PWS.

Key Terms:
Awqaf

Plural form of waqf

Mutawalli

Trustee

Waqif

Donor / founder

Mauquf-alaih

Donee / recipient(s)

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