Funding higher education through waqf: a lesson from Malaysia

• DOI: https://doi.org/10.1108/IJOES-12-2021-0217
• Published date: 12 April 2022
• Date: 12 April 2022
• Pages: 107-125
• Subject Matter: Economics,Social economics
• Author: Muhammad Usman,Asmak Ab Rahman

Funding higher education through

waqf: a lesson from Malaysia

Muhammad Usman

Department of Economics, College of Economics and Social Development,

Institute of Business Management (IoBM), Karachi, Pakistan, and

Asmak Ab Rahman

Department of Syariah and Economics, Academy of Islamic Studies,

University of Malaya, Kuala Lumpur, Malaysia

Abstract

Purpose –This paper aims to highlightthe importance of waqf in financing higher educational institutions

(HEIs) and itspotential as an alternative source of generatingadditional funds for the HEIs, and discourseson

waqf practice, fundraising, waqfmanagement and utilisation of waqf income for the development of higher

educationin Malaysia.

Design/methodology/approach –This paper is based on the informationgathered through interviews

with 12 participants who are activelyengaged in waqf in different capacities. The participants can easily be

classified into three expert groups; personnel of waqf-based universities, personnel of the respective State

Islamic Religious Councils (SIRCs) and waqfpractitioners. In addition, archival records, relevant documents

and librarysources have been used in the research.

Findings –The study learnt that waqf in Malaysia is centralised and exclusively controlled by the

SIRCs, which are, as a r ule, sole trustees of all cat egories of awqaf in the respec tive states; hence, any form

of private trusteeship is considered illegal. It is a prerequisite for the establis hment of a waqf fund to

obtain permission from the respective SIRCs, and bring it under the purview of the council prior to setting

up a waqf. The ministry of higher education has taken some initiatives to encourage HEIs to use waqf as

an alternative source of generating funds. Subsequently, numerous public universities have set up waqf

funds and developed a comprehensive mechanism for raising the fund through traditional and modern

methods and technologies. A major chunk of the waqf funds is collected in the form of cash, but the

amount falls short of reaching criticalmass to enable the waqf to b ecome self-sustaining. The s tudy found

that the universities also involved themselves in various social welfare programmes, especially in health

care, and some income-generating projects besides seeking support from the waqf fund for their acade mic

and educational activities.

Practical implications –The paper brings out the fact that waqf offersthe best features as an alternative

fiscal instrument to finance projectsof public good, including higher education at three selected waqf-based

universitiesin Malaysia.

Social implications –The study’sfindings will be helpful to the ummah in general and Malaysia in

particular. It can help policymakers, legislators and academicians in formulating new strategies for the

The researchers express their gratitude to the Ministry of Higher Education Malaysia and the

University of Malaya for allocating funds for this project under a research grant [LRGS/2013/SME-

UM/SI/02] and [PG006-2014B]. The authors are especially thankful to Associate Professor

Dr Siti Mashitah Mahamood and Ustaz Azizi bin Che Seman of the Academy of Islamic Studies,

University of Malaya, for their unrelenting support throughout this study.

Funding: The researchers were able to accomplish this study with the help of research grant LRGS

entitled “Models of Waqf Financing, Investment and Development of the Higher Educational

Institutions: A Study in Malaysia and Some Selected Countries”[grant number LR001A-2013B] and

“Models of Waqf Financing, Investment and Development of Higher Educational Institutions: A

Comparative Study of Malaysia and Pakistan”[grant number PG006-2014B].

Funding

higher

education

through waqf

107

Received5 December 2021

Revised2 February 2022

Accepted9 March 2022

InternationalJournal of Ethics and

Systems

Vol.39 No. 1, 2023

pp. 107-125

© Emerald Publishing Limited

2514-9369

DOI 10.1108/IJOES-12-2021-0217

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/2514-9369.htm

common good and sensitizethe countries facing a huge fiscal deficit and lack of developmentto the viability

and potentialof waqf as a catalyst for progress and economic activity.

Originality/value –The paper shares the experience of Malaysia’swaqf-based universities, waqf

fundraising, managementand income utilisation. It accentuates the fact that waqfcan help finance academic

activities at universities and sheds light on some useful examples of waqf-based universities founded in

earlierperiods of Islamic civilisation.

Keywords Waqf, Waqf-raising, Waqf-management, Waqf-income, Waqf-university, Malaysia

Paper type Research paper

1. Introduction

Waqf (pl. awqaf)orhubs (pl. ahbas) is an Arabic word,which is normally translated into “to

detain”,“to prevent”and “to restrain”. The Islamic jurisprudence defines waqf as “a

dedication of property either in express terms or by implication, for any charitable or

religious object, or to secure any benefit to human beings (Abdul Shukor et al.,2019;

Abdullah, 2016;Cizakca, 1997;Çizakça, 2004;Doumani, 1998;Layish, 1983;Mahamood and

Rahman, 2015;Haneef,2016;Mohsin et al.,2016; Monzer Kahf, 1999).

It is community development, and social finance institution found to be established in a

systemic unity of well-being by symbiotic complementarities of sustainability (Choudhury

et al.,2019;Levin, 2000;Usman and Ab Rahman, 2020). It affords a model of a charitable

society that is found in different forms across all civilisationsand religions and has been in

existence since the advent of Islam. It is similar to a conventional endowment or a welfare

foundation that generatesperpetual income to assist certain sectionsof society.

The beneficiaries of waqf may compriseindividuals and organisations such as hospitals,

religious institutions, schools, colleges and universities (Choudhury, 2018;Çizakça,1998,

2000;Mahamood and Rahman, 2015;Usman and Ab Rahman,2020, 2021). In economics,

waqf is described as an ongoing public service that uses private wealth to establish

institutions for public benefit. Therefore, waqf is a private institution or a trust which

provides assistanceto the government in public services. Though the state in Islamis solely

responsible for ensuring the welfare and well-being of its citizens, Islam also permits the

functioning of the third sector, includingwaqf to help the state in works of public welfare. In

that sense, waqf is a unique source of assistancefor a society that may cater to all activities

of life from birth to death atzero cost (Çizakça, 2000;Mohsin et al., 2016; Monzer Kahf, 1999).

In Islamic law, the waqf institution permits an individual or organisation to donate his/

her assets in the name of Allah, for the well-being of mankind(Barakat, 2014;Çizakça, 1998;

Kader Sharifah Zubaidah Syed and Mohamad Nor, 2019;Kahf, 2004;Mohamed Asmy Bin

Mohd Thas Thaker, 2018;Nik Ahmad Nik et al., 2019).It is in reality devoted to Allah for a

welfare purpose specified by waqif(donor); hence waqf becomes a perpetual public property

that means it cannot be sold, mortgaged andinherited (Cizakca, 2002;Mahamood and Kahf,

2011;Mohsin et al.,2016; Monzer Kahf, 1999;Sherif,2012).

Every waqf has two main objectives, namely, individual and societal. In the individual

waqf, the donor performs an altruisticAct to please (taqarrub) Allah Almighty by endowing

his/her assets to a waqf as a charitable deed. The Act determines the level of gratitude for

the bounties enjoyed and acknowledgement of the blessingsof Allah Almighty. In the light

of Islamic teachings, waqf acts as a reminder to keependeavouring towards the attainment

of forgiveness in the hereafter as it may well be possible the process of wealth creation and

accumulation trap a person completely. Belief in seeking the pleasure of Allah Almighty,

forgiveness and reward in the hereafter is reflected in historical inscriptions and waqf

documents (Hasan, 2007;Raissouni, 2001). The societal waqf is the embodiment of the help

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