The document discusses the concept of waqf in Islamic economics, its historical background, and its significance within the Muslim community. It defines waqf as a voluntary endowment meant to support charitable endeavors, detailing its different types, characteristics, and regulatory requirements. Additionally, it highlights the role of institutions in Malaysia that manage waqf and the importance of complying with established regulations to ensure the effective distribution of benefits.

1. BUS 2237 FOUNDATION OF ISLAMIC ECOMONICS
GROUP ASSIGNMENT SECTION 1
WAKAF
PREPARED BY:
AYU ATIFAH BINTI NABAWI (DBA 112030)
NORAMIRAH SHAHIRAH BINTI ADNAN (DIA 121045)
FAUZIAH BINTI MOHAMED SALEEM (DIA 112009)
SAKIRA BINTI SHAHJAHAN (DIA 121049)
PREPARED FOR:
MADAM AZIAWATI
DATE OF SUBMISSION:
22MAY 2013

2. TABLE OF CONTENTS
INTRODUCTION ..................................................................................................................... 3
HISTORY OF WAQF ............................................................................................................ 3
WAQF FROM DIFFERENT SHCOLARS PERSPECTIVES. ............................................. 4
PURPOSES OF THE ASSIGNMENT .................................................................................. 4
DEFINITION OF WAQF .......................................................................................................... 5
TYPES AND CHARACTERISTICS OF WAQF ..................................................................... 7
TYPES OF WAQF ................................................................................................................. 7
CHARACTERISTICS OF WAQF ........................................................................................ 8
WAQF COMPONENTS ............................................................................................................ 9
i.
ENDOWER (WAQIF) REGULATIONS ....................................................................... 9
ii.
ENWDOWMENT (MAWQUF) REGULATIONS ...................................................... 10
iii. BENEFICIARIES (MAWQUF „ALAIH) REGULATIONS ....................................... 10
iv. AWQAF LEGAL STATEMENT (AL-SIGHAH) REGULATIONS ........................... 11
IMPORTANCE OF FULFILLING THE REGULATIONS OF COMPONENTS.............. 11
THE INSTITUTIONS THAT HANDLES WAQF IN MALAYSIA ...................................... 12
i.
PURPOSES OR JAWHAR........................................................................................... 12
ii.
OBJECTIVES OF JAWHAR ....................................................................................... 12
iii. FUNCTION OF JAWHAR........................................................................................... 13
THE USAGES OF THE ENDOWMENT FUND ............................................................... 13
THE DIFFERENCES OF WAQF, ZAKAT, DONATION AND INHERITANCE ............... 14
i.
DIFFERENCES BETWEEN WAQF AND ZAKAT ................................................... 14
ii.
DIFFERENCES BETWEEN WAQF AND SADAKAH ............................................. 14
iii. DIFFERENCES BETWEEN WAQF AND INHERITANCE ...................................... 15
ISSUES ON WAQF ................................................................................................................. 16
i.
SUBSTITUTION (ISTIBDAL) .................................................................................... 16
ii.
SYARI‟AH COURT ..................................................................................................... 16
CONCLUSION ........................................................................................................................ 17
REFERENCE ........................................................................................................................... 18

3. INTRODUCTION
There are three mechanisms of economic distributions in Islam and one of them is
mechanism of voluntary action (MOV). Aside from hibah (gift) and sadaqah(donation)
which are commonly known when it comes to a free-will action of charity, waqf is also
classified under the same category.
HISTORY OF WAQF
Waqf has existed since the time of Prophet Muhammad. It is said that “the first known
Waqf is the mosque of Qubaa' in Madinah, a city 400 kilometre north of Makkah, which was
built upon the arrival of the Prophet Muhammad, peace and blessings be upon him, in 622
C.E”(Kahf, 2012).
A Muslim sailor named IbnuBattutah, who had visited Damascus in the year 726 M
witnessed how the institution of waqfcaused great achievements of harmony and
development in human‟s society and life. The various methods of how waqf was being done
and distributed at that time also were written in his book.
A hadith narrated by Muslim, said that, “‟Ibn Umar reported: Umar acquired a land at
Khaibar. He came to Allah's Apostle (may peace be upon him) and sought his advice in
regard to it. He said: Allah's Messenger, I have acquired land in Khaibar. I have never
acquired property more valuable for me than this, so what do you command me to do with
it?”Rasulullah SAW. said: “If you like, you arrest the land, you giving the results, not sold,
not giving and not endowed." Ibnu Umar said: "Umar giving the results of land to poor
people, family, slave, sabilillah, Ibnusabil and guests. And not prohibited for people who
managing (nazhir) of wakaf to eat from the results of wakaf or giving eat to somebody else
without intending to heaping the properties.”
Page 3 of 18

4. WAQF FROM DIFFERENT SHCOLARS PERSPECTIVES.
There are as many as four scholars of Islam that defined waqf differently according to
their benefits and understandings on it. Syafi‟i defined waqf as to “keep the benefit of certain
wealth and give its benefit to the needy or people who deserved it. It is also an affair that
suggested by Islam”. Hanafi said that “waqf can give the kindliness for comrades in this
world and will be rewarded by God for the good deeds in the day of resurrection”, Maliki
said that “waqf is an affair that suggested by Islam (Sunat)” and Hanbali said “waqf is an
affair that suggested by Islam and can make us nearer to God”(Yalawae & Tahir).
Through the four scholars, it is acceptable to say that waqf is an absolute amal related
to Islam, specifically to gain Allah‟s blessing as He has suggested. Both Syafi‟i and Hanafi
claimed waqf to be an act of benefits and kindness to the public or the needy. On the other
hand, Maliki concluded that waqf is just an action of recommendation in Islam while Hanbali
prolong the same idea as Maliki‟s with an intention of waqf is to getting close to Allah.
PURPOSES OF THE ASSIGNMENT
The aim throughout this assignment is to elaborate waqf for further understandings.
This covers its definition, components, ruling board in Malaysia that handles waqf,
differences between waqf, zakat, donation and inheritance as well as an issue relates to waqf
and inheritance and solutions taken to solve it.
Page 4 of 18

5. DEFINITION OF WAQF
Waqf, derived from the word wakafa in the Arabic language, means to stop, contain, or
preserve. In North and West Africa, Waqf (pl. Awqaf) is also called Habs (pl. Ahbas or
Hubus).
In Islamic terms, waqf refers to a religious endowment, that is, a voluntary dedication
of one's wealth or a portion of it either in cash or and its spending for shariah compliant
projects.The word Waqf is used in the Islamic Law in the meaning of holding a property and
preserving it so that its fruits, revenues or usufruct is used exclusively for the benefit of an
objective of righteousness while prohibiting any use or disposition of it outside its specific
objective.
Waqf is also the transfer of wealth from private ownership to a beneficial social
collective ownership.This definition accords continuity or perpetuity to Waqf, i.e., it applies
to non-perishable properties whose benefit and usufruct can be extracted without consuming
the property itself.
Waqf is not obligatory. Instead it is a recommended action because the main purpose of
waqf is to get closer to Allah and receive His blessings by spending wealth in the way of
Allah. It encourages on voluntary and important for social and economic functions such as
education, health, social security and construction of mosques.
The four eminent Islamic scholars have given different meaning of waqf or endowment
as well.
Al-Syafi‟i said that “waqf is to keep the wealth that can give benefit, and keep it
remaining in the same form while the original owner cannot consume it”. In another word,
waqf is to keep the wealth that is beneficial to the needy and the wealth remains in the same
condition as well as the owner is not allowed to consume its benefits.
Al-Hanafi said that “waqf is to preserve and upkeep the original wealth that belonged
to someone else and give the profit to the need”. In another word, waqf is defined as an action
of preserving and up keeping wealth that could give benefit or profit for the needy rather than
the owner itself.
Page 5 of 18

6. Al-Maliki said that “ownership of the profit from the origin of wealth which was given
for endowment and gives it to whoever the endowment was meant for or the needy”. In
another word, waqf is considered as giving the right to consummate the profit of wealth that
was given for endowment to whoever the endowment was meant for or the needy.
Lastly, Hanbali said that “waqf is keeping the original owner from consuming wealth
that he had endowed, wealth which produce benefit should remain in the same form”. In
another word, waqf is wealth that was kept from the consummation of the original owner and
give its benefit to the poor and needy, and that wealth must remain in the same condition
without being consummate by the first owner.
All four scholars contain the same idea in their definitions, that is the endowment or the
property that has been waqf must remain intact (the same) and it is to be used to help the
needy.
Since waqf is one of the Islamic economy distribution, few Arabic terms are widely
used related to it such asAwqaf, the plural form of waqf,Waqif, that isis referring to the
endower or the owner of the property, Mawquf, that is the endowment and Mawquf ‘Alaih is
used to refer to the beneficiary of the waqf.
In conclusion, waqf can simply be defined as an endowment recommended by Islam
that a portion of an individual‟s wealth or themawquf being used to help the needy and the
benefits that come from it cannot be consumed by the owner or the waqif itself.
Page 6 of 18

7. TYPES AND CHARACTERISTICS OF
WAQF
TYPES OF WAQF
There are three common types of waqf. They are special endowment, cash endowment
and endowment immovable property.
Special endowments is that where waqif strengthen the endowment for a particular
purpose.During the legal agreement or contract of waqf, the owner has clearly stated the
usages he wishes the mawquf to be used as. The owner can declare the purpose of him giving
the mawquf, such as land to build a mosque or a house for orphans, and it annotbe used for
other reasons.
Cash endowments is waqf using cash collected in a trust fund under the corporation
endowments, for example PerbadananWakafSelangor, which is being entrusted to administer
and manage the endowment shares to finance development projects and investment where the
benefits are for the welfare and continued importance of Muslims. Cash endowments are not
a direct donation, but instead it is considered as a fund or additional capital to the economy to
the usage of society‟s development.
Endowments immovable property (property cannot be moved) is provide land for
building or community activities that are useful for the growth of Islam and provide for the
use of school buildings, hospitals and so on.
Page 7 of 18

8. CHARACTERISTICS OF WAQF
1. Irrevocable
The endower or the waqif cannot revoke the endowment if it has already been declared a
waqf is created solely for philanthropic purposes and always benefits.
2. Perpetuity
This guarantees that it will benefits generation after generation and also prohibits it from
being confiscated.
3. Inalienable
It is although the benefits of the donation are beneficial to man the property itself is consider
to be returned to god. No person can ever become the owner, so the waqf become common
assets. It cannot be sold mortgaged, gifted or inherited.
Waqf involves converting private ownership to public ownership of a property, fund or
asset which disallows the original owner to use the property and anyone to change its
ownership. It is understood that, in economic perspective, buying and selling transactions can
only be done when the person has full right on the account or a private ownership. Since the
endownment is no more a private ownership, it cannot be sold or the ownership to be
transferred to another people. Otherwise, it is called as sadakah.
The benefits, however, is for everyone and it is not limited.
Page 8 of 18

9. WAQF COMPONENTS
Like other forms of amal, waqf consists of components and regulations that have to be
followed. There are four components of waqf, mainly the endower (waqif), endowment
(mawquf), Benificiaries (mawquf ‘alaih) and Awqaf legal statement (Al-Sighah).
i.
ENDOWER (WAQIF) REGULATIONS
Endower is the founder, or the original owner that wants his property to be waqf. For a
person to become a waqif, he or she must be a free person (that is not a slave). A slave cannot
be a waqif because he has no full right over his property.
Secondly, the person must be baligh that is mature. Since waqf involves transferring a
portion of his wealth, he must be mature enough to understand. Children cannot be a waqif
because they are not yet baligh and their amal is considered as donation. In fact, those who
are not yet baligh do not carry the responsible of their actions entirely.
Thirdly, the person mustbe „aqil, which is fully responsible or intelligent. Aqil is
derived from the word aql, or intelligent, means in his full sense and mind.
Lastly, He is must have the right to spend his properties to welfare and he is not forced
by anyone to do so. In another word, he must be the rightful owner of the property or a
private ownership who is willing to give away his wealth for the sake of Allah. It is important
that there is not forcing involve because waqf is considered as a charity or a form of sadakah
that its main purpose is to receive the blessings from Allah. Thus, ikhlas has to be uphold
during waqf.
Page 9 of 18

10. ii.
ENWDOWMENT (MAWQUF) REGULATIONS
Endowment refers to the properties or portion of the wealth that is either in cash or
assets or funds that wish to be waqf.
The first and foremost regulation of mawquf is that the property must be a real estate or
a thing that has real meaning. Waqf on properties with benefits without objects are not
accepted.
Secondly, the endowment must be a permanent and non-perishable. It has to be an asset
or fund that is beneficial for a quire period of time. People commonly relate this to noncurrent assets such as land, buildings or even shares, like how PerbadanaWakaf Selangor has
done whereby one can give portion of his income to waqf.
Thirdly, the endowment must be fully owned by the owner or private ownership. It is
because with the owner having full right on the property that he can make the decisions on it
to be waqf. It is also related to the status of the endowment converting from private to public
ownership.
Lastly, the usage of the properties should be liable in Islam. That is to say that the
mawquf should be used for good and beneficial purposes of society according to Syari‟ah or
Islamic law.
iii.
BENEFICIARIES (MAWQUF ‘ALAIH) REGULATIONS
Beneficiaries are people who receive the waqf.It can either be individuals or more, such
as institutions. It is also designated to Shari‟a compliant deeds or people such as in helping
the needy.
Page 10 of 18

11. iv.
AWQAF LEGAL STATEMENT (AL-SIGHAH) REGULATIONS
They are statements that can be understood words or writings for the purpose of waqf
whether it is for the public or private waqf. There are two types of al-sighah, which are
Explicit and Implicit declarations.
Explicit declaration is a clear declaration that says one meaning, for example “I give
this house to the poor people”. It is understood that the individual wishes to waqf the house to
the poor people and not mistaken as a donation and any other form of charities.
Implicit declaration is a declaration that has another meaning, for example “I give this
house as charity to the poor people”. Compared to the example given in explicit declaration,
the declaration contains the word „as charity‟ whereby it can be easily misunderstood as
simply a donation rather than a waqf.
IMPORTANCE OF FULFILLING THE REGULATIONS OF COMPONENTS
When one of these regulations is not fulfilled, the person is not considered as a waqif
and thus, the waqf is denied. For example, a man who is not sane stated that he wished to
donate (waqf) his house for the orphans. Logically, no one would take the man‟s words
seriously knowing that he is not at his full mind, so as a drunker. Thus, when one of the
regulations is not fulfilled, leading to one of the components being incomplete, the waqf is
considered false.
Page 11 of 18

12. THE INSTITUTIONS THAT HANDLES
WAQF IN MALAYSIA
Malaysia is an Islamic country even though it consists of multi-racial society. Majority
of the citizens in Malaysia are Muslims and due to that, it is important the government ensure
the needs of the Muslims are preserved, by establishing laws and board of govern to handle it.
Realizing the importance of waqf, a board under government called JabatanWakaf
Zakat and Haji or JAWHAR.
i.
PURPOSES OR JAWHAR
JAWHAR is developing bumiputera capital resources, such as land and the waqf, under
the responsibility of the state Islamic religious authorities. State religion authorities must take
responsibility and become compulsory and active in developing by playing the economic role
of Muslims and human development. It also plays the role in the establishment of the
department of waqf, zakat, hajj to ensure that the administration of waqf, zakat and hajj
affairs in the country more structured, systematic and effective. JAWHAR is also intended to
improve the effectiveness and efficiency of service delivery to the next level of excellence,
glory and distinction.
Each region is entrusted its own Islamic council to handle matters regarding Muslims
and their needs. For this assignment, it is found out that there is a board in charge of waqf in
Selangor called PerbadananWakaf Selangor or PWS. Similar to JAWHAR, PWS is entrusted
with responsible to handle waqf and ensuring that the property is not misused. They help the
society to understand the importance of waqf and how to do it correctly especially when it
comes to fulfilling the requirements of the components.
ii.
OBJECTIVES OF JAWHAR
To improve the value-added Property Management practice endowments and cultivate
towards building Ummah economic efficacy and holistic based on Islamic Law.
Page 12 of 18

13. iii.
FUNCTION OF JAWHAR
1. To advise the Council with respect to the policies, methods, measures need to be
implemented and taken to encourage the development of waqf properties and products
2. Implement and give effect to such a policy, direction or order of the Council in respect of
property development and endowment products
3. Develop, adopt and implement policies, methods and measures on the development of
waqf properties and products
4. Act as a coordinating agency in the implementation progress of property development and
endowment products is rapid
5. Plan, develop, implement and promote the development and implementation of waqf
property and products
6. Manage and carry out the operation and maintenance of the waqf, including facilities,
infrastructure, and tools in place donated property.
7. Promote, coordinate and carry out research and development in all aspects of property
and endowment products.
THE USAGES OF THE ENDOWMENT FUND
i. Economies activities such as donated land development program, purchase of real estate
lots and housing project
ii. Social activity such as help orphans, human development programs, treatment funding
and recovery.
iii. General assistance for example mosque Islamic community and public facilities and
maintenance building institutions of religion
iv. Education activities such construction of religious schools, universities, MA „had tahfiz
and scholarship.
Page 13 of 18

14. THE DIFFERENCES OF WAQF, ZAKAT,
DONATION AND INHERITANCE
Waqf is a form of amal that is beneficial to Muslims and the society. It is important for
people to understand the differences between waqf and other amal or ibadah such as zakat
and sadakah. The importance of the endowment to be preserved from inheritance is also
important in order to avoid the initial attention of waqf for the sake Allah false.
i.
DIFFERENCES BETWEEN WAQF AND ZAKAT
In Arabic linguistics,zakah, from the infinite of the verb zakaa, is meaning to grow,to
purify and to increase. When said about a person,it means to improve to become better.Zakah
helps generate a flow of funds and recruit the necessary manpower. The differences between
zakah and waqf is,waqf it has unlimited receivers,which means that they did not concern
about the rich or poor people,but in zakat they concern about the zakat receivers.Other than
that,waqfis recommended in islam but zakat is an obligation action.
Referring to the literal meaning zakat itself could differentiate it from waqf entirely,
whereby zakah has a certain amount of payment that needs to be made, on certain type and
amount of wealth, at certain time to certain people. On the other hand, waqf defined simply
as a voluntary dedication of one's wealth or a portion of it either in cash or and its spending
for shariah compliant projects. There no restriction of time to it, unlike zakah.
ii.
DIFFERENCES BETWEEN WAQF AND SADAKAH
Literal meaning of donation is called sadakah. Donation refers to a non-obligatory
action,whereby it is left to a man‟s faith and charitable nature to give without being asked
believing that Allah will compensate him and helping for a greater reward.It is the act of
voluntarily spending ones resources with one. A donation is a gift, typically for charitable
purposes and or to benefit a cause. For an example,donation is something that we own and
give to other person for his or her benefit privately,but in waqaf we give private ownership
for public beneficial.
Page 14 of 18

15. iii.
DIFFERENCES BETWEEN WAQF AND INHERITANCE
Inheritance is when a person is passed away and he or she gave his or her property to
their children through declaration (will). A Will is a declaration of a person‟s intentions
concerning the disposition and devolution of his property after his death. The person making
the Will, the testator, sets down how he wishes his property to be disposed after his death and
states the names of the persons (the executors) who are to attend to its distribution.
If one of the heirs receive the highest amount more than the third of the inheritance, it
means that he have the right to make the decision whether to give the property as waqfor not.
The difference between will and Islamic inheritance or Faraid is that, the testator has already
decided the ratio of the inheritance, while in Faraid, the inheritance is automatically divided
according to the revealed Al-Quran. In Faraid, 2/3 belongs to the sons while 1/3 belongs to
the daughters.
The huge difference between waqf and inheritance is that, waqf does not allow such
ownership to be passed down from one person to another. The beneficiary may asks other
person to continue preserving the endowment but to an extent of deciding what to do with the
endowment, such as selling it. In heritance, however, refers to a law of passing down the
private ownership from one kin to another, giving them full right on what to do with the
property, which is even selling it, is legal.
Page 15 of 18

16. ISSUES ON WAQF
Waqf has existed since the period time of Prophet Muhammad (Peace be upon him).
Back then, legal documents were not a major need in conducting waqf because even verbally
is considered as an acceptable Al-Sighah. On top of that, majority people are illiterate and
thus, they would prefer to voice out their wish rather than having it written black and white.
This has become a great issue in the future, which is now, because their descendants
would claim back the property that their ancestors have waqf with an excuse there is no legal
contract involved.
The scenario had happened in Rembau, Negeri Sembilan as published in
BeritaHarian(Harian, 2010).
Another issue is when the mawquf is damaged, increase of public interest and
government development planning on the endowment especially land.
Question rises on what actions should be taken to solve this. In Malaysia, Istibdal is
done to overcome the issues aside from Islamic law or Syari‟ah court.
i.
SUBSTITUTION (ISTIBDAL)
Istibdalmeans to substitute a waqf property with another property or with money which
is of the same or higher value than it either by substituting, purchasing, selling or any
other means in accordance with Syari‟ah. It is to ensure the benefit for the survival of
waqf property as well as to solve the problems (Hisham, Jasiran, & Jusoff).
ii.
SYARI’AH COURT
This implies to cases that involve heirs want to claim back the mawquf or the
endowment with and without the will of the testator. There are few documents and
procedures that have to be taken before the heirs could claim the property.
Page 16 of 18

17. CONCLUSION
Due to the significant benefits that could be gained from this charitable donation, the
western economics have adapted it in their system and used many names such as endowment,
trust fund and foundation.
It is realized that prosperity is no longer a private, but it can be shared as a public or in
a community. Through waqf, the status of private ownership on an amount of wealth is
converted to become public ownership. The convenience or the benefits of the wealth and is
accessible by everyone and thus, it is said that prosperity can be shared and not a private
ownership anymore.
On top of that, waqf generates economy and development of a country. Since the
endowment is a form of asset or fund, it is beneficial to the nation for a long period of time.
Aside of its main benefit, that is to achieve Allah‟s blessings, it is also a continuous amal that
even after the endower dies, the rewards from the endowment for its service and benefits to
the community will continue.
Due to this greatness that one can achieved, every human is encouraged to waqf as a
form of charity to help the society and economy development, the nation‟s growth as well as
to achieve the peace in the Hereafter.
A hadith narrated by Muslim, said that “The Prophet (Sallallahhualihiwasalam)
said:“When the son of Adam dies his actions come to an end except three things, a continuing
charity or knowledge which gives benefit or a pious child who prays for him””.
Page 17 of 18

18. REFERENCE
(21 May, 2013). Retrieved 9 May, 2013, from General Authority of Islamic Affairs and
Endowments: http://www.awqaf.gov.ae/?Lang=EN
Aziawaty, A., & Norjaimah, M. J. (2013). Chapter Six: Distribution in Islam. In Foundation
of Islamic Economics (pp. 46-48).
Berita Harian (20 November, 2010). Anak Tuntut Harta Wakaf Selepas Bapa Meninggal.
Rembau, Negeri Sembilan, Malaysia.
Hisham, S., Hazel A. J., & Kamaruzaman J. (n.d.). Retrieved 21 May, 2013, from
http://www.idosi.org/mejsr/mejsr13(cifwm)13/5.pdf
Kahf, M. (4 January, 2012). Kinds and Objectives of Islamic Waqf. Retrieved 17 May, 2013,
from
On
Islam:
http://www.onislam.net/english/shariah/contemporary-issues/islamic-
themes/452483-kinds-and-objectives-of-the-islamic-waqf.html
Yalawae, A., & Tahir, I. M. (n.d.). The Role of Islamic Institution in Achieving Equality and
Human Development: Waqf or Endowment.
Page 18 of 18