1. MODERN ISLAMIC LAW & ECONOMICS
Waqf (Endowment)
Mohamed Firdaus Kader Mohideen
Head, Group Shariah
Malaysian Industrial Development Finance
2. Ladies and Gentlemen,
The wealth that we have presently
in hand is to fulfil responsibility and
upholding trust (Amanah) that the
Almighty Allah had bestowed upon
us.
3. Our asset is considered as the worldly
beautification in this temporary world.
The existence of these adornment makes things
easier for our life in this world, like the land
which we had bought, it facilitates us to build
house, farming, planting trees and vegetables,
and creating space and any other activities that
we wish and would like to do.
4. The cars that we owned allow us to move to
and fro from one place to another place ,
carrying out our daily activities.
Our home enable us to make transaction
with people and so on. In other words, what
is termed as wealth is a facility for us.
5. When we are busy every day accumulating wealth,
Allah explained that we should give some of our
wealth whether it is a mandatory donation like the
payment zakat or voluntary charity (Sadaqah) like
donation that is voluntary in action such as
endowments, grants , wills, charity,.
6. The order for this charity is described in the
Holy Quran in Surah Baqarah verse 195:
And spend in the way of Allah and do not throw
[yourselves] with your [own] hands into destruction [by
refraining]. And do good; indeed, Allah loves the doers
of good.
7. Waqf is one of the means to infaq or give charity
that is required and should be implemented by
the Islamic community.
The command for this Waqf was declared by Allah
the Almighty in Surah Ali Imran verse 92 : Never
will you attain the good [reward] until you spend
[in the way of Allah ] from that which you love.
And whatever you spend - indeed, Allah is
Knowing of it.
8. A companion of the Prophet, Abu Talhah (RA),
when he heard of this verse, quickly meet
Rasulullah S.A.W and read this verse to him and
gave his most valuable wealth, his garden that he
named “Bairuha” located in a prime position near
the Masjid Nabawi as Waqf and also advised him
as to its distribution i.e. to his relatives
9. This garden was frequently visited by the Prophet
whether to rest or to drink the water from the
pool and also because it was nearby the mosque.
Once Abu Talhah had endowed his garden,
Rasulullah S.A.W repeatedly congratulated him,
for his wealth
would certainly give
him the advantage.
10. In fact, not only Abu Talhah but other companions
were racing to give their property like Saidina Umar
Al-Khattab, R.A endowed a piece of land "Khaibar",
Saidina Uthman R.A endowed a well for the use of
the Muslims and so on.
It is also reported that every Sahabah (companion),
including the abovementioned companion, made a
Waqf.
For example, Abu Bakr Siddiq, Uthman Ghani, Ali
Ibn Abu Talib, Zubair, Muaz ibn Jabal, Zaid ibn
Thabit, Saad ibn Waqqas, Khalid ibn Walid, Jabir ibn
Abdullah, and Abdullah ibn Zubair (RA) had all
made a Waqf.
11. • It is reported on the authority of “Abdullah
ibn ‘Umar (ra) that ‘Umar Ibn Al-Khattab (ra)
acquired land in Khaibar (153 km to the north
of Madinah) . He went to the Prophet (saw) to
consult him about it saying:
• “Oh Messenger of Allah, I obtained some
land in Khaibar better than any I ever had,
what do you suggest that I do with it?” The
Prophet (SAW) said, “If you like, you can
give the land as an endowment and give
the fruits in charity”.
12. So ‘Umar gave the land as an endowment on
condition that it would not be sold or given to
anybody as a present and it would not be
inherited, but its yield would be given in charity to
the poor people, to the kith and kin, for freeing
slaves, for Allah’s Cause and for the travelers
and guests; and
that there would be no harm if the guardian of the
endowment ate from it according to his need
with good intention, and fed others without
storing it for the future”
(Al-Bukhari (5/354, no 2737, Muslim (3/1255,no
15/1632)
13. When the Muslim migrated to Madina there was severe shortage of
water which troubled the Sahabah (RA). There was only one sweet
water well (known as the well of Rauma) owned by a Jew who used
to charge exorbitant amount of money for his water.
Our beloved Prophet Sayyidina Rasulullah (Sallallahu Alaihi
Wassallam, SAW) promised house in paradise for the one who buys
this well and dedicates it to the believers for their water needs.
Sayyidina Uthman Ibn Affan (RA) went to the Jew and offered to
purchase his well which the Jew declined.
14. Sayyidina Uthman Ibn Affan (RA) persisted in his offer and paid
enormous money for half of the well. It is mentioned that
Sayyidina Uthman (RA) paid somewhere around 20,000 Dirhams
for half of the well which is enormous price even by today’s
standards. Sayyidina Uthman Ibn Affan (RA) then made an
agreement to have the well to him for one day while the Jew had
the other day, on his day Sayyidina Uthman Ibn Affan (RA) gave
out free water to anybody.
The Islamic Dinar is a specific weight of 22k gold (917.) equivalent to 4.25 grams.
The Islamic Dirham is a specific weight of pure silver equivalent to 2.975 grams.
7 dinars is equivalent to 10 dirhams.
15. Nobody came to fill on the day of the Jewish
brother so he eventually sold off his half share
due to absence of business.
Sayyidina Uthman Ibn Affan (RA) dedicated the
well for free water and it continues to pump
water even until today.
16. Over 1400+ years due to abundant water the area around the
well become fertile and developed a garden of high quality dates
with as many as 1550 trees during the Ottoman rule of Madina.
The entire area was endowed to Muslims by Sayyidina Uthman
Ibn Affan (RA) and he never took a penny while the profits keep
growing and growing.
17. • The Accounts (today) are kept in a Bank Account
in Madina even today of all the profits in the
name of Sayyidina Uthman Ibn Affan (RA).
• Saudi Government has decided to build a Hotel
with this money and the yearly earning are
estimated to be 50 million Saudi Riyals. Half of
the profits will be spent on the poor while the
other half (of the profits) will be deposited back
into the Account.
18. In this case, how can the property be beneficial to
him again after he endowed it to Allah?
This question is answered by the Prophet through
the following hadith:
• Abu Huraira (Allah be pleased with him) reported
Allah's Messenger ﷺas saying:
• “When a man dies, his acts come to an end, except
for three, recurring charity, or knowledge (by
which people) benefit, or a pious son, who prays
for him (for the deceased).”
• The rewards for Waqf and shadaqah will be
continuous to the giver even if he died as long as it
and is used for the welfare of the Muslim
community.
19. Waqf are alms deeds that give profit to the
owners even after they passed away and no
more in this world.
This means that the rewards will remain constant
to the person donating the property as long as it
continues to benefit the Muslim community and
is allowed by the Islamic legislation.
20. This is exactly the business we're doing with Allah
swt that He promised we will not be at loss forever.
Allah said in Surah Fatir, verse 29:
Indeed, those who recite the Book of Allah and establish
prayer and spend [in His cause] out of what We have
provided them, secretly and publicly, [can] expect a
profit that will never perish.
21. The terms, Waqf, habs, tasbil mean ‘to stop, to
restrain’ i.e. devoting in the way of Allah
“The confinement of an amount of money
by a founder(s) and the dedication of its
usufruct in perpetuity to the welfare of
society”
DEFINITION OF CASH-Waqf
22. What is meant by Waqf?
The term Waqf has not been specifically mentioned in
the Al-Quran or al-hadith but are interpretations made
by the fuqaha on sadaqa jariya
What is meant by Waqf (singular); Awqaf (plural)?
A Waqf is an act of holding certain properties and
preserving them for the confined benefit of certain
philanthropic purposes that disallows any use or
disposition of them outside the specific objective (Kahf,
1998). According to Imam Mohammad al-Khatib Syarbiniy
Waqf is holding something that could be used to
perpetuate the form (‘ain). Therefore, all transactions are
subject to the laws of Islamic law.
23. In Malaysia, management of Waqf assets are under
the purview of State Religious Islamic Councils (SIRCs)
under the respective state rulers/sultans. Each state
has its own Waqf enactment laws. Under these
enactments SIRCs are deemed to be the sole-trustee
of Waqf assets in the state.
The administration of Waqf assets in Federal
Territories of Labuan, Kuala Lumpur and Putrajaya is
under the King and centralised under the Islamic
Religious Council of the Federal Territory.
24. TYPES OF Awqaf
Generally, the creations of Awqaf in Malaysia fall
within 3 major categories:
a.Waqf `am (General Waqf)
b. Waqf khas (special Waqf)
c. Waqf al-mushtarak (Hybrid)
25. Waqf `am refers to any form of Waqf dedication aimed at general
welfare or khairat without specifying any particular beneficiaries
(individuals or organisations/institutions) or specific purposes.
This category of Waqf is applicable to things or objectives
directed towards general social welfare and charitable purposes.
In contrast, Waqf khas is a type of Waqf with specified
beneficiaries or purposes. Under this form of Waqf, the Waqif
will identify the persons who are to benefit from the Awqaf or
the purpose for which the Waqf must be applied.
26. The combination of Waqf `am and Waqf khas
forms the hybrid category called as Waqf al-
mushtarak.
Waqf which is created from any type of property
or established under any type of scheme will
use either the Waqf `am or the Waqf khas
concept.
27. Each type is treated differently in
accordance with Islamic principles.
It follows that for a Waqf khas, the
mutawalli or the trustee has the
responsibility to implement all the
stipulated conditions of a Waqif unless
they are opposed to Shariah and the law
of the country.
28. The development of Awqaf properties in Malaysia has increased a great
deal. Various approaches have been applied and these centre on the
physical type of Waqf land developments. Awqaf hotels are the recent
trend in the development of Waqf property.
Four hotels have been built under the Waqf concept in the states of
Malacca (Pantai Puteri), Perak (The Regency Seri Warisan), Terengganu
(Grand Puteri) and Negeri Sembilan (Klana Beach Resort).
Klana Beach Resort hotel, Port Dickson Negeri Sembilan, which is
located at the Baitul Hilal Complex, also has an observatory with the
largest telescope in the country, measuring 26 inches in diameter.
The above hotels were built on Awqaf lands entrusted to the
mentioned SIRCs. These huge projects were funded by the Malaysian
government, and the respective SIRCs of those states are the sole
trustees for their administration.
The hotels are operated by the appointed companies through leasing
contracts. Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
29. Waqf development is also significant in the area of medical and
health services.
For example, JCorp, through WANCorp and in cooperation with some
of the SIRCs and support from KPJ Healthcare Berhad has developed
and manages 20 Waqaf An-Nur Clinics (KWAN); one hospital Waqaf
An-Nur Hospital (HWAN); and two mobile clinics in Johor on the
fundamental of charity through Waqf concept’s adaptation.
The main objective of their establishment was to provide healthcare
treatment and dialysis facilities to the general public, in particular
those in greatest need, regardless of their ethnicity and religion.
Up to June 2014, a total of 1,001,115 treatments had been given to
patients in the chain of KWANs. Out of those, 73,542 treatments
were given to non-Muslim patients.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
30. The total number of patients with kidney failure that have
been receiving dialysis treatment in HWAN and KWANs are
now 124. In addition, HWAN and the chain of KWANs not only
provide healthcare treatment for a nominal charge of RM5
inclusive of medication but also offer dialysis treatment at a
subsidised rate to the needy.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
31. Imarah Wakaf (Menara Wakaf) is another unique example of a Waqf
development project in Malaysia.
It is a 34-storey Waqf building under the administration of MAIWP,
located at Jalan Perak within the Golden Triangle vicinity of Kuala
Lumpur City Centre.
The building was built on 1.21 acres of Awqaf lands endowed by a
wealthy Gujarati Muslim, the late Ahmad Dawjee Dadabhoy.
The building incorporates Islamic architectural features with the latest
in international building design. It was developed using Build Operate,
Transfer (B.O.T) as well as the Islamic concepts of wakala, ijara and
istisna`.
Imarah Wakaf was the first large-scale commercial development
project in the country constructed on Waqf land.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
32. It involved 3 leading Islamic
organisations, namely the MAIWP,
Tabung Haji (TH,Malaysia
Pilgrimage Fund Board) and Bank
Islam Malaysia Berhad (BIMB). The
project was funded by the TH at a
cost of RM151 million, and has a 25
year leasing period. MAIWP as the
land owner (i.e., the trustee) will
receive RM56.6 million over that
period.
Imarah Wakaf is now being used as
the Bank Islam Headquarters and is
well known as Menara Bank Islam.
33. MAIWP has been provided with one storey of the
building and there is also a place for prayer called
Surau(Musolla) Wakaf Ahmad Dawjee Dadabhoy,
(SWADD) named after the Waqif. It is believed and trust
that MAIWP will receive RM700 million worth of this
commercial Waqf building upon the completion of the
BOT period.
The above mentioned types of development clearly
show that Awqaf are not just confined to traditional
subjects, such as mosques and graveyards which are
always associated with ritual or `ibadah purposes only,
but also take into account commercial aspects.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
34. What is important is that the profits or revenues
of such mawquf (beneficiary) should ultimately
satisfy Waqf purposes and benefit mawquf `alayh
(i.e., Waqf beneficiary/ies).
In fact, there are many other instances of property
developments in Malaysia established under the
Waqf concept which aim to meet the various
needs of society, such as orphanages, business
premises, educational complexes and women’s
shelters.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
35. The Corporate Waqf introduced by the Johor Corporation
Berhad (JCorp) falls under the category of Waqf of shares,
whereby part of the units of shares owned by this
corporation in its subsidiary companies are dedicated as
Awqaf.
The dividend income from these Shariah Compliant shares
are distributed as follows:
1. SIRC of Johor (5 percent),
2. JCorp (70 percent) and ;
3. 25 percent to general
purpose charities.
Credit to ISFIRE January 2014 article by Dr Siti Mashitoh Mahamood
36. Waqaf An-Nur Corporation Berhad (WANCorp) has been
entrusted with managing all equity shares transferred by
JCorp to Awqaf.
WANCorp is a company established under limited
guarantee by the JCorp and the appointment of the Nazir
Khas (Specific Manager) to manage the shares,
particularly the Awqaf.
37. There are two kinds of Waqf:
• Immovable property
Includes land, fields, farms, or buildings such as
mosques, schools, hospitals, or basic infrastructures
such as bridges, roads, water supply etc.
• Movable property
Includes cattle, books, money/cash, crops and
weapons, shares of Joint-Stock Company, etc.
Movable and immovable properties have been made
Awqaf for general and specific purposes or
beneficiaries, depending on the wishes of Waqifs.
38. Previously, Malaysians preferred their Awqaf to be
established from immovables, consisting of landed
properties, especially for the erection of Masjids
(mosques), graveyards and Islamic religious schools.
In the current context, Awqaf from movables are also
included. These include cash Waqf, Waqf shares and
Waqf of gold.
The latter is a new kind of mawquf accepted by Yayasan
Waqaf Malaysia (YWM, the Malaysia Waqaf
Foundation).
39. Cash Waqf is also accepted in the country.
Although its validity has been debated by some
Muslim jurists in Islamic jurisprudence due to its
impermanent character, the Malaysian Waqf
authorities have approved a cash Waqf provided
that it is converted into or used towards creating
permanent benefits.
Normally, the funds collected will be used to
purchase immovable assets or be added to
existing Waqf development projects.
40. Beneficiaries of Cash-Waqf
• Waqf Khayri, Waqf ‘Am (Public Waqf) is a cash endowment made
by the founder to support the general good and welfare of
society, the poor and the needy.
• Waqf Ahl, Waqf Khas al-Waqf al-dhurri and Waqf ‘al-awlad are
all the same and refer to family Waqf/specific Waqf.
• Waqf Mushtarak (combined Public and Family Waqf) is a cash
Waqf created by a founder to support both the public and his
family or specify certain persons, group of people or needy areas.
41. Characteristics of Cash-Waqf
• Irrevocability: This means that once the founder created the cash-
Waqf he cannot revoke it back, however, he/she can benefit from its
investment/revenue.
• Perpetually: Once the cash-Waqf is created it must be perpetual. This
will ensure regular and continual support from the cash-Waqf to
financing needy areas in the Muslim society.
• Inalienability this means that once cash is created as Waqf no one
can ever become the owner to alienate it, i.e. it becomes a ‘frozen
asset’. It cannot be the subject to be given as gift, inheritance, or
any alienation whatsoever.
42. Investment of Cash-Waqf
Mudarabah (partnership) has been
recommended by earlier Muslim jurists.
The latest fatwa issued by Fiqh Academy Islam,
agreed that cash Waqf can be invested in any
Shariah compliant mode of investment, such as
Mudharabah, Murabaha, BBA, Musharakah,
Istisna, etc.
43. Can Non-Muslim Create Cash-Waqf?
The Shafie School permitted the creation of Waqf from a non -Muslim even if it is for the benefit
of a Mosque. He based his opinion on the following hadith :
قال عنه هللا رضي مالك بن انس عن
:
هللا رسول قال
)
ص
" (
ان هللا
االخرة في بها ويجزى الدنيا في بها يعطى حسنة مومنا يظلم ال
افضى اذا حتى الدنيا في هلل بها عمل ما بحسنات فيطعم الكافر واما
بها يجزى حسنة له يكن لم االخرة ”الى
The Prophet (pbuh) said “Allah will not oppress any Muslim from his
good deeds, as he gives it in this world and he will be rewarded in
this world and in the hereafter. But for the non- Muslim he will be
rewarded for all his good deeds only in this world”
44. MODERN APPLICATIONS OF CASH Waqf
The last two decades witness the revival of the
institution of Waqf and the creation of movable Waqf
i.e. cash Waqf in almost all Muslim countries and
Muslim minority countries.
45. The Role of Waqf in Development
The Waqf system had played a vital role in achieving
development in the following areas:
• Reduces government expenditure
• Solve the problem of unemployment
• Creates cities and commercial activities
• Creates financial institutions.
• Enhances the different sectors in the Muslim countries,
agricultural, health, industrial, hotel, social and financial
services sectors.
46. Challenges
• Awareness and willingness of the Muslim society to
contribute to the Waqf fund.
There exists the perception that Waqf assets are only in
the form of mosques, cemeteries, religious
schools/madrasahs. However the religious scholars
have allowed other forms of Waqf such as cash, shares,
corporate Waqf.
• There is no complete data base on Waqf assets. Not all
Waqf land had been developed. The State Islamic
Religious Councils have limited capital to develop the
Waqf assets under their jurisdiction.
47. Opportunities
Redistribution of wealth and income
• Macro
– Awqaf provided public utilities (roads, water and
sewage), educational institutions and hospitals
• Micro
– Awqaf can also directly affect entitlements by
providing education (scholarships) and health
(service and medicines) for the poor
48. Therefore, let us reignite this charity practice
again. Hopefully the endowments that we do,
even if it is a little, would give benefits for us in
this world and the Hereafter. Hopefully the
endowments that we do will make us slaves who
fear Allah.
