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Awqaf a Way Forward (Finance for development week4 final project)
- 1. INTRODUCTION “Wealth is growing in the Muslim world. So is the poverty. Where have we gone wrong?” Tariq Cheema, president of the World Congress of Muslim Philanthropists (WCMP)
- 2. SDGs
- 3. AWQAF (ENDOWMENTS) Social Responsibility Motive: “Around the Muslim world, there is an increased awareness that if we manage our ‘Awqaf’ effectively, we can bring revolutions in terms of development - not only for the Muslims, but people around the world.” – this is a duty on every Muslim
- 4. AWQAF (ENDOWMENTS) – AN INTEGRATED APPROACH TO SOCIAL DEVELOPMENT
- 5. Strategic Giving Conventional Generous Giving INITIATIVE OVERVIEW How do we develop a solution globally to capitalize on this opportunity? There has never been any organisations either locally or globally thought of modelling two seasonal global industries Qurbani and Zakat Al Fitair of the Islamic Economy based on Waqf concept Towards Development and Value creation We believed that “Professionalisation of the Institution of Awqaf Globally” will be an important starting point in order to realise improved results in this new journey towards revival. There is clearly a need • for better planning • for better performance management • for better alignment and continuous improvement globally based on the concept of ‘Ihsan’ • We need a shift in the culture
- 6. STRUCTURE OF THE SOLUTION Integrated approach Partnerships Planning and delivery Customer/ Stakeholder Commercial Culture Policy/ Legislation Finance/ various Sectors of the economy The people driven by Obligation
- 7. BUSINESS MODEL IN ACTION Source: Pew Research Center’s Forum on Religion & Public Life VISION MATERIALSIATION Muslim world - approx1.6bn(2010) to 2.2bn (2030) - annual charitable giving $200bn +(min.) Key Stakeholders - Governments - Global agencies - Aid industry Inudustry Partners - Agriculture/ Food processing - Financial institutions - Investors - Techonology/ innovation Middle East/ North Africa Asia - Pacific Sub- Saharan Africa Europe Americas Target muslims in the west - approx50m(2010) to 68m(2030) - Qurban/ZakatAlFitair annual est. $1.2bn Key Satekholders - Dubai Govt/ AMAF (Strategic partner) - New Zealand Govt - United Nations / WFP Inudustry Partners - Aotearoa Fisheries / Prepared foods Ltd (Endowment owned) - Farmers/meat suppliers Awqaf Australia Awqaf Canada Awqaf NZ Awqaf UK Awqaf USA
- 8. STRUCTURE OF THE FINANCING SOLUTION STEP 1: CF/S ISSUANCE Awqaf (Endowment)Project Prospectus Crowdfunding (CF) or Sukuk Approved No Amended Yes Issuance of the Awqaf CF or Awqaf Sukuk STEP 1STEP 2: GOVERNANCE S-WAQF STEP 2 Qard Hasan (Interest free loan) is Given to Awqaf Success Asset Bought Finish Payment (repay investment and distribute profits to beneficiaries) Stop Sell Asset Return Cash No Annual Payment No Yes Yes Transfer ownership to Awqaf (Endowment) Organization that will run in perpetuity Replicate the model somewhere else STEP 3 STEP 3: APPLICATION CF or Sukuk Returned to Owners or reinvested in new project STEP 4 Revenues generated from the investemtn asset (social enterprise) continue feeding WAQF-S S-WAQF 1st Step towards World Class Cash Waqf development STEP 4: REPLICATION
- 9. OTHER RELEVANT INFORMATION Two critical models developed in 2011 used as a guide to develop our journey so far Global AWQAF Performance management framework Peoplecapability Awqaf Culture and Behaviours Values & Competency framework built on Islam and commercial principles based on sustainability and need Workforce plans & Skill gap analysis Embedding core soft skill development focusing on financial skills, customer first and leadership skills as the foundation Develop tools and methodology for training and education on technical skills Organisationcapability Direction InformationTechnology HumanResources FinancialStrategy BusinessProcesses Transform Transform Direction Awqaf Vision and Direction Global Awqaf Vision Development plan Regional and Local Awqaf plans 10 Year implementation plan
- 10. OTHER RELEVANT INFORMATION A VALUE MAP FOR AWQAF Develop and maintain relationships with key stakeholders Strategic Information Management Strategic Financial Planning and management Strategic Human Resource Management Create an open and performance driven culture Continuously improve & innovate the service delivery Develop our knowledge, skills and expertise - High performing sector Ensure happy and dedicated employees and trustees Promote a positive image and reputation Quality advice and evidence based decision making Effective communication – internally and externally Awqaf takes a leading role in improving quality of life now and for future generations of people in need by making it the World's Most Sustainable Humanitarian Development model Provide leadership and strategic direction for shaping, developing and managing Awqaf - Underpinned by Strategic priorities Meet the needs of people all over the world through the Effective Delivery of Quality and Customer-Centric Services
- 11. Name: Mohamed Nalar Designation : Trustee Organization: Awqaf New Zealand Email: m.nalar@actrix.co.nz
Editor's Notes
- Islamic financial analysts estimate. Every year, somewhere between US$200 billion and $1 trillion are spent in “mandatory” alms and voluntary charity across the Muslim world, At the low end of the estimate, this is 15 times more than global humanitarian aid contributions* in 2011. However Islamic finance experts, researchers and development workers say much of the money spent in `zakat’ (mandatory alms) and `sadaqa’ (charity) is mismanaged, wasted or ineffective.
- I do not have to spell out the areas we need to focus on. The SDGs are applicable across all communities as to the challenges we need to over come in the next decade or so. The global population has now surpassed 7Bn and counting. According to the World bank the most recent estimates, in 2012, 12.7 percent of the world’s population lived at or below $1.90 a day. That’s down from 37 percent in 1990 and 44 percent in 1981.
- Awqaf New Zealand was established in 2011 in New Zealand as a charitable trust with a primary focus of generating Awqaf (Endowment) revenue from un utilised or wasted charitable resources mainly form the Islamic world and re direct them towards social development across the globe. We believe that whilst identifying new sources and new ways of doing things to resolve some of these pressing issues facing humanity we also need to start managing and utilising what we already have better and in a more coordinated manner and efficiently “Billions of dollars worth of giving in `zakat’ (mandatory alms) and `sadaqa’ (voluntary giving) in the Muslim world are unfortunately ineffective by and large, Very little of the money goes towards sustainable development. Our giving shouldn’t be driven by our desire to prove that we are good people… Our giving should be smart and effective. “We are here to bring that shift in the culture: the paradigm shift from conventional and generous giving to strategic giving… There is a lot of money around that needs to be channelled towards development.”
- In the early years of Islam, `zakat’, `sadaqa’ and `awqaf’( religious endowments) played a large role in society - not only in poverty alleviation, but in the building of infrastructure and provision of social services. In Ottoman times, some Turkish towns were almost entirely based on religious endowments - the real estate donated, with the rent going towards charitable or social ends: educational and health facilities, research institutes, even the lighting of streets. The endowments are credited as one of the reasons for the “Golden Age” of Islamic civilization from the eighth to the 13th centuries. But due to colonization, the stagnation of Muslim institutions, mismanagement of `awqaf’ and the inability of their laws to adapt to changing times, these charitable traditions lost their central place in the organization of society. So we believe that reviving the institution of Awqaf (Endowments) will lead to much better outcomes and we can now align the areas of focus to the SDGs themselves. As we already are learning and know that money is critical to eliminating poverty this source of financing represents a huge pool of potential in the world of aid funding. Awqaf New Zealand has a specific focus on animal farming through establishing endowment farms in New Zealand and Australia linked to the annual seasonal Qurban industry where animals and the meat are donated to feed the poor by Muslims all over the world.
- If we were to go down this path it was critical we take an integrated approach to planning, communication and delivery will be crucial and developed a number of strategic models / frameworks to guide us though the implementation process and to build confidence with the donor world. The goals and the focus is to • maximise the value of existing donations • which will provide maximum benefit and satisfaction to the "donor" • establish and develop Awqaf (Endowment) assets that will generate sustainable revenue streams towards sustainable community and social development Awqaf New Zealand has a specific focus on animal farming via developing endowment farms in New Zealand and Australia linked to the annual seasonal Qurban industry where meat is donated to feed the poor by Muslims all over the world
- The idea was innovative, ambitious and the same time very complex given it involved a number of different stakeholders the ordinary Muslim public from different parts of the world, agriculture and food industry players, government agencies both international and local, aid industry participants, religious institutions, the finance industry and the like. We had to make sure we take a partnership based approach between the Muslim world, Government agencies and Industry players. To build confidence with the
- The idea was innovative, ambitious and the same time very complex given it involved a number of different stakeholders the ordinary Muslim public from different parts of the world, agriculture and food industry players, government agencies both international and local, aid industry participants, religious institutions, the finance industry and the like. We decided very early in the project the "Awqaf" sector was the vehicle we will use to develop this concept because it has the best possible structure and background that Muslims can easily relate to as donors and investors and the sector is in a revival state
- We have developed a performance management framework that can be used as a model across the globe with Awqaf institution which will bring consistency to the implementation, delivery and monitoring of our goals
- We also believe it is important to have a consistent “value” system that will drive the results and confidence with out stakeholders. We can now align ourselves to SDGs and the wider global initiatives to ensure our work will align and complement and contribute towards these wider global goals. We are an organisation run by volunteers and we identified very early in the project initiation phase that in order to succeed we had to have "Sincere intention", "focus" followed by a well thought out "strategy" to materialise this vision. To date we have had achieved good progress and some outstanding outcomes and look forward to continue our mission and it is a privilege to share our thoughts and ideas and experience with the wider community.