Waqf Practices and Its Sustainability: The Case of Universiti Sains

Islam Malaysia

Mariam Saidona Tagoranao

, Alizaman D. Gamon

and Lutfi Muhammad Zain

Universiti Sains Islam Malaysia, Malaysia

International Islamic University Malaysia, Malaysia

Keywords: Waqf Practices, USIM Pusat Waqf Dan Zakat, Sustainability.

Abstract: Waqf practices in the higher education has been adopted in the past centuries by well-known Islamic

universities in the world for educational financial sustainability. In Malaysia, for the past few years, some of

the government higher educational institutions have implemented the waqf system under the Malaysia

Higher Education Blueprint 2015-2025 (MEB) to ensure the universities long-term sustainable funds. But

before the MEB was implemented, the Universiti Sains Islam Malaysia (USIM) has developed its own

Waqf Center in 2013 as a sustainable funding for the university’s programmes and activities. The USIM

Waqf and Zakat Centre (PWZ) has been well-developed through its Cash Waqf, Site Waqf and Education

Waqf programmes. The objectives of this paper will explore the sustainability of the University waqf

programmes and activities to the students and other target group of beneficiaries. For this purpose, analysis

of the waqf implementation in other higher educational institutions in the Southeast Asia region will be

undertaken. In this study, the data collection will include observation, interview and library documents and

texts. The result of the research will anlayse the impressive sustainability programmes and activities

(students’ residential college, health specialist clinic, mosques, hospital and mobile clinic.) that have been

implemented by USIM as mutawalli. The paper forms a part of an ongoing research on the importance of

waqf in enhancing the universities income generation.

1 INTRODUCTION

Background

The waqf development in the universities is not

relatively new in the Muslim world. Its evolution

can be found in the Muslim and non-Muslim

countries in several decades prior to colonial era.

Waqf in the educational institutions has a long

historical roots that can be traced back at the time of

the Islamic Golden Age. There are many old famous

high educational institutions, such as Al Azhar

University in Egypt (970 AD), the Al-Qarawiyyin

University in Fez, Morocco (859 AD) and the

Merton College, Oxford (1274) which were founded

through the waqf system. Knowing the dynamics

roles of waqf institution in the transformation of

Muslim societies, particularly in the ASEAN region,

there is a need to explore the sustainability of waqf

programs in the Islamic higher education,

particularly on its contribution to research, students’

scholarships as well as health and religious services

to the Muslim communities.

Tracing the origin of waqf is not the prime

concern of the study. Rather, it would be sufficient

to recognize its development and sustainability in

response to the increasing demand for contemporary

education and research financial problems. The

sustainable waqf system, which the higher

educational institution had introduced is generally

regarded as incomparable with other man-made

institution i.e. charity, since its operation and

management is deeply imbedded with Islamic

worldview. Waqf becomes a holistic instrument in

upgrading the legal, social and economic growth of

Islamic educational institutions. In the olden days,

waqf funds became the only financial source for

Muslim schools maintenance, teachers and scholars

sustenance by providing them a secure means of

livelihood, and gave them the freedom to engage in

research and produce considerable scholarly output

that contribute to the development of the Muslim

cultural and scientific activities. Another way of

186

Tagoranao, M., Gamon, A. and Zain, L.

Waqf Practices and Its Sustainability: The Case of Universiti Sains Islam Malaysia.

DOI: 10.5220/0010119900002898

In Proceedings of the 7th ASEAN Universities International Conference on Islamic Finance (7th AICIF 2019) - Revival of Islamic Social Finance to Strengthen Economic Development Towards

a Global Industrial Revolution, pages 186-192

ISBN: 978-989-758-473-2

fulfilling the functions of waqf was collecting cash

from individuals and some private institutions to

build schools or classrooms for disadvantaged

students. It becomes an important part for

educational institutions in fulfilling their

responsibilities for the welfare of the society.

The waqf practices and its development in the

higher education within the context of Malaysia as a

secular state has always been an appealing subject to

many researchers. The Malaysia Higher Education

Blueprint 2015-2025 and the collaborative efforts of

the universities are instrumental towards the

development and sustainability of waqf practices in

their respective campuses. The University Sains

Islam Malaysia is one of the public universities that

has been empowered in essence to become a

mutawalli or waqf administrator in uplifting the

socio-economic development of the ummah. The

gradual success and sustainability of waqf practices

in the Universiti Sains Islam Malaysia has no doubt,

been inspired by other waqf educational institutions

in the Muslim world. USIM becomes one of the

pioneering forefront for waqf financing when Dato’

Prof. Dr. Asma Ismail was the Vice Chancellor of

the University. She was inspired to share the

knowledge and experience of the Singapore Islamic

Religious Council for the successful implementation

of waqf management innovations (USIM, Website).

USIM has also visited the Universitas

Muhammadiah and Universitas Darussalam in

Indonesia which are fully established through waqf.

The Centre for Awqaf Financing Development of

USIM started to operate on March 2013 with a total

number of three (3) workers. On July 23, 2013, the

Majlis Agama Islam Negeri Sembilan (MAIS)

recognised the USIM Waqf Centre as a “mutawalli”,

where it was given a power to deal with the

fundraising as well as the distribution of the waqf

properties in Negeri Sembilan. The USIM academic

staff and administrators are made to understand the

concept behind waqf particularly the increasing

realization of the need for support and subsidy for

the poor university students and other purpose for

the welfare of the needy people.

Objective

The main objective of the study is to explore and

examine the sources and factors that contributed to

the development and sustainability of USIM Waqf

Centre and its activities, particularly on education

and health matters. It will determine the growing

need for an innovative waqf financing mechanism

for socio-economic development. It will also

identify the appropriate level of sustainable waqf

financing for other programs and activities in USIM

campus. Issues and challenges faced by the Waqf

centre as a mutawalli will be identified. The study

will assess the persistence participation of the

University stakeholders and the engagement of local

financial institutions in providing quality services to

the Muslim ummah. The goals and missions by the

University on waqf management are mostly

achieved particularly after zakat has been integrated

to the USIM Waqf centre. The USIM Centre for

Awqaf Financing Development has been

restructured and renamed as the “Pusat Wakaf dan

Zakat (PWZ)”. But the contribution for zakat and its

distribution will not be discussed in this study.

2 LITERATURE REVIEW

Islamic Relevant Sources

The important concepts for waqf management and

development are based on the principles of

perpetuity, inalienability and irrevocability of waqf

properties. As the Qur’an says to the effect, O ye

who believe! Give of the good things which ye have

(honourably) earned, and of the fruits of the earth

which we have produced for you, and do not even

aim at getting anything which is bad, in order that

out of it ye may give away something, when ye

yourselves would not receive it except with closed

eyes. (Surah Al Baqarah, 2:267), Another important

Qur’anic verses on waqf provides “And spend of

your substance in the cause of Allah, and make not

your own hands contribute to (your) destruction; but

do good; for Allah loveth those who do good”

(Surah Al Baqarah, 2:195. During the time of the

Prophet (s.a.w), it was reported that Umar ibn al-

Khatab had a land in Khaibar. He consulted the

Prophet on what to do with it. The Prophet said, “If

you like you can give it in charity (as an

endowment). So Umar gave it in charity as an

endowment on the condition that it should neither be

sold, nor given to anybody as a gift. (Dar al kotob al

Ilmiyyah, 2008) Another Hadith was reported by

Muslim from Abu Huraira (r.a) that the Prophet

(saw) said: when a son of adam dies, so does their

deeds except for three things: alms giving, benefited

knowledge and pious son who pray for them (Ṣaḥīḥ

Muslim 1631). It has bee narrated that Mukhairiq

made his will that his seven orchards in Madinah be

given after his death to Prophet (saw). After his

death, the Prophet distributed the property to the

poor and the needy .

Waqf Practices and Its Sustainability: The Case of Universiti Sains Islam Malaysia

187

One of the famous story on waqf at the time of

the Prophet (saw) was the case of of a water well

bought by Uthman (Radiyallahu ‘anhu) in Madinah

during first year of Hijra. The well was originally

belonged to a Jew who used to sell the water to the

poor and needy people of Madinah at an exorbitant

price. The Prophet (saw) promised Paradise to the

person who would buy the well and donate it to the

residents of that city. Upon hearing this, Sayyidina

Uthman at once set out for the owner and purchased

the well in two instalments, paying a total sum of

38,000 silver dirham, which was a hefty sum of

money at the time. He then registered the well

as waqf and allowed everyone, Muslim and non-

Muslim, to draw water for free (Nazrin Muizuddin

Shah, 2018). The well became a sustainable waqf

property that has been used by the people until the

present time in watering the surrounding farmlands

and other tress including the date palms. In fact,

the mutawalli, have invested the money or the

income of fifty millions (Saudi Riyal) from the

products produced by the farm and other waqf

investment related to the use of the water well.

Related Studies

Waqf practices today may not be totally the same

with the previous traditional practices by

considering the present requirements and

innovations needed for a corporate and professional

waqf management like in the case of Singapore

experience. The Majlis Ugama Islam Singapore

(MUIS) through its subsidiary Warees Investments

Pte. Limited successfully developed the wakaf land

on Bencoleen Street from an abandoned wakaf site

to a commercial residential building (USIM

Website). Another example to be considered that has

been practiced is the cash transfer funds and the

concept of a sukuk musyarakah by involving mutual

funds between investors and MUIS. This practice

provides a huge returns for the MUIS and able to

finance the needs of the ummah.

Waqf sustainability has been widely and deeply

discussed in some previous studies and research

program. Rashed Al-Jayyousi explained that waqf

fund can promote partnerships among all relevant

players within and between countries of the world.

In Malaysia, the state of Negeri Sembilan succeed in

putting forward the waqf agenda to higher

educational institutions. It supports the social and

economic activities and other research and

educational programs by the local government.

George Makdisi (1981) discussed all the rights

and duties pertaining to the administration of waqf

including the rebuilding and preservation of waqf

properties, distributing the proceeds among the

objects of the waqf, paying its beneficiaries, taking

all precautions to preserve the properties and

handling all disputes and litigations. As an instance

are the rights and duties which was delegated by the

Majlis Agama Islam Neger Sembilan to USIM as an

administrator and mutawalli for the state’s waqf

properties. He defines the mutawalli’s authority over

the waqf properties and its proceeds. This is in

accordance with the practices of the Prophet (saw)

by appointing others somewhere else. But mutawalli

must be established as responsible and with integrity

as well as transparent and rational.

The special features of waqf properties

ownership has been explained by Muhammad

Nejatullah Siddiqi (1996) by clearly emphasizing

that it is not a private or public property but vested

on the Almighty. Therefore, it has to be guarded

against irregularities such as, fraud,

misappropriation and mismanagement by

individuals or organisations. It should be the subject

for public welfare and Shariah objectives under

maqasid As-Shariah. Other universities in the West

were successfully established through endowment or

waqf properties which are not only favourable to the

Muslims but also other people with different

religions.

According to Hussein Elasrag, prudent waqf

management requires preservation and development

of waqf assets, investment and generation of returns,

ensuring that the returns or benefits flow to the

beneficiaries as intended by the waqif. He pointed

out that investment of waqf assets can be a necessity

to generate an income which can be avail of for

other matters related to the real intent in creating the

waqf.

As the high educational institutions are currently

working for a long-term sustainable financial funds

due to an increasing cost and financial constraint, the

government provides in 2015 the Malaysia

Education Blueprint (MEB) for the universities that

laid out some shifts to spur continued excellence in

Malaysia’s higher education. It is a blueprint that

provides the tools that can be used and develop by

the public universities to acquire an income

generations from collaborative activities. One of the

important sources for income generation is waqf

collection funds. MEB highlights the necessary

elements to be achieved for sustainable waqf funds

for government universities. The basic concepts and

challenges on waqf practices have been discussed to

guide the stakeholders.

The State Islamic Religious Council (SIRC) has

been recognized under the State List, Ninth

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188

Schedule of the Federal Constitution the right to

govern and develop the waqf management of the

state. The SIRC of Negeri Sembilan can be a khalifa

or vicegerent to supervise the waqf institutions and

create partnership with the higher educations to

enhance good governance. The waqf management in

the state is governed by the Waqf Enactment (Negeri

Sembilan) 2005 (Enactment No. 5). This enactment

has been utilized and implemented to enhance the

management of Negeri Sembilan waqf institutions,

including the USIM Waqf and Zakat Centre. The

enactment is a state law that defines the appointment

of waqf registrar, the establishment of waqf

management committee, the creation of a wide range

types of waqf, such as waqf ahli, waqf irsod and,

waqf muabbad including stocks, cash waqf and waqf

funds.

With the power vested on SIRC as a sole trustee

of waqf properties in Negeri Sembilan, a

Memorandum of Understanding was signed between

them and USIM on 21 January 2014 to jointly

develop a number of projects to nurture the waqf

culture especially through the establishment of the

USIM Medical Specialist Clinic and the

Haemodialysis Clinic (M, 2018). SIRC assigned the

amount of RM1 million through USIM as a waqf

grant. Another RM1 million was allocated for

qardhul hassan to cover the costs of renovation and

to purchase medical equipment for the medical,

haemodialysis and special eye clinic. This loan has

been already been paid after its few years operation.

3 ANALYSIS MODEL

The study utilizes the qualitative research methods.

Inspired by the philosophy of integration of Naqli

and Aqli, current literatures on Islamic and

conventional social finance are consulted to

understand waqf practices and its sustainability in

the higher education. Various practices that had

contributed to the development and sustainability of

waqf centre in USIM are examined intensively. In-

depth interviews with the officers of Pusat Zakat and

Waqf in USIM had been conducted to assess the

innovative financing mechanism and to understand

the challenges faced the waqf centre as mutawalli. In

addition, the blue print of Malaysian government in

enhancing university income generation through

endowment and waqf is examined to determine the

sustainability of the programs and activities of waqf

centers in USIM.

Development and Achievement of USIM Waqf

Centre

The Universiti Sains Islam Waqf Centre has a great

potential to achieve its own goals and missions

because of having a dynamic nature in providing a

continuous benefit to the social and economic

development of the Muslim ummah. Although,

waqf financing has been practiced in the past, but it

is considered as something new in the context of

USIM as a higher education. For the past few years,

USIM was able to develop the best and most

competitive model of financial development that

gives a positive impact to education and health

development. With the dedicated support of the

SIRC to the USIM’s waqf programs, right incentives

in collecting the waqf endowment has been

successfully implemented in the following ways:

a. The Wakaf Tunai (Wakaf Al-Abrar Fund) or

cash waqf has been practiced by collecting cash

money from those who donated and who

cannot endow a land or immovable properties.

It is known as “waqf musytarak”, which means,

the gathering of several waqf endowment

including money waqf. The cut-off salary and

deduction from other claims are part of cash-

waqf scheme. It provides an opportunity for the

academic and administrative staff to take part

in a charity as a kind of good deeds that will be

rewarded in the Hereafter. The cash money has

been used to fund the USIM Health Specialist

Clinic for its medicinal, dental, primary care

and haemodialysis. Other parts of the cash

waqf has been used towards the development

of mosques, hospitals, specialist clinics, student

accommodations, Islamic kindergartens,

playgrounds and many other aspects, all for the

benefits of current and future generations

(USIM Website).

b. Wakaf Tapak or waqf site, refers to the

endowed rental double-storey shop lots that

accommodate the USIM Health Specialist

Clinic (formerly named as USIM Eye

Specialist Mobile Clinic) that provides

health services among the needy people. It

operates since 2015 to treat the asnaf patients

who need a haemodialysis treatment due to

an end-stage-renal disease.

c. Education Waqf Programme is an endowment

that has been contributed by different agencies

beyond the USIM campuses and other donation

from private individuals for the benefit of

USIM undergraduate students who are not

financially capable of maintaining their studies.

Waqf Practices and Its Sustainability: The Case of Universiti Sains Islam Malaysia

189

The main focus of the funding is for USIM to

distribute and share the benefits for collective

use. The scholarships are allocated for study

fees, allowances, and other relevant financial

assistance (USIM Website).

For the past few months, the PWZ was able to

succeed in promoting the Wakaf and Zakat Boost by

scanning the QR Code in a particular assigned

strategic places around the main University campus.

The cashless contribution from individual through

Boost Application has increased the waqf collection

from the past few months. Table 1 shows the amount

collected from individuals by using the Boost QR

Code from January-May 2019.

Table 1: Report on the contribution of individual waqf

through BOOST.

Source: Al-Abrar Bulletin 2019.

Cash wakaf scheme has been stated in Section 11

of Wakaf Enactment of Negeri Sembilan 2005. One

of the methods to implement this Cash Wakaf

Scheme is by salary deduction (potongan gaji skim

wakaf). This scheme was introduced by USIM

Wakaf Centre after it was established in 2013. The

applicant staff needs to fill-up the application form

and determine the amount to be deducted from the

staff’s monthly salary. Table 2 shows the amount

deducted from the salary of 421 staff (out of 1,455

USIM staff) from January to May 2019.

Table 2: Report on Waqf collection from USIM staff’s

salary deduction.

Source: Al-Abrar Bulletin 2019.

Table 3: Report on Annual Waqf collection from USIM

staff’s salary deduction.

Source: Al-Abrar Bulletin 2019.

Table 3 shows the waqf contributions of USIM

stafft from 2015-to June 2019. The waqf funds have

been used for USIM Specialist Health Clinic, the

maintenance of the students’ residence college and

the Qur’anic Study Centre for Disabled people.

Aside from funding those projects mentioned above,

the PWZ has been providing financial funds and

services to a number of educational and social

activities such as:

a. The Annual ASEAN Seminar on Muktamar

Waqf Iqlimi, the “Waqf sustainability and

Islamic Social Finance in Empowering Global

Ummah Development”. This seminar was held

four times in Malaysia and Thailand for the

past years. It disseminate information on the

sustainability of establishing waqf that will

strengthen the global community development

by expanding the levels of teaching, research

and industrial networking activities. The annual

seminar was used to be co-sponsored by the

Majlis Agama Islam Negeri Sembilan and

other organisations and agencies.

b. There are workshop sponsored by PWZ such

as, Bengkel sumbangan projek pendanaan

wakaf (Februari 14, 2019), Bengkel Pelan

strategic dan Garia Panduan Zakat PWZ

(March 28-30, 2019) and Bengkel Pemurniaan

GAris Panduan Agihan Zakat (April 26-28,

2019). These workshops were able to gather

some experts on waqf and zakat to contribute

their expertise to produce waqf products on

education.

c. One hundred deserving USIM students were

given a free rebate and free prepaid on March

2019 for the purpose of helping them

financially.

d. With the help of Petronas in Bandar Baru Nilai,

PWZ provided the free petrol for some

motorists on May 2019.

Since January 2019, the USIM Wakaf and zakat

centre have received the contribution from

Perumaham Kinrara Berhad, Tenaga Nasional

Month Contribution/Donation

January -----------

February RM47.00

March RM102.20

April RM109.09

May RM310.94

Month (2019) Contribution/Donation

January RM12,238.00

February RM13,722.00

March RM14,411.00

April RM14,956.00

May RM15,659.00

Year Contribution/Donation

2015 RM68, 280.00

2016 RM89,020.00

2017 RM123,040.00

2018 RM165,210.00

2019 RM85,629.00 (January-June 2019)

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Berhad, Etiqa General Takaful Berhad, Bank Islam

Malaysia Berhad, Maybank Islamic Berhad and

Swiss Retakaful as well as Syarikat Takaful

Malaysia (Al-Abrar Bulletin, 2019).

Analysis

The increasing amount of waqf contribution every

month through Boost and also the salary deduction

from the USIM staff implies the growing awareness

on the importance of waqf and its benefit to the

beneficiaries and the waqif or donors. It shows that

Muslims are encourage to cultivate the Islamic

culture of sharing for charitable purposes for the

sake of the Ummah. Through Boost and deduction

from the staff’s salary, they are able to practice the

waqf in their lifetime based on the concept of

mahabbah or love and brotherhood, although they

cannot afford to provide a high-valued waqf

properties such as, lands, houses, and others.

With the trust and transparency that have been

shown by PWZ as a mutawalli, the government and

private agencies have extended their support to the

different activities sponsored by PWZ. The health

services brought by USIM Specialist Medical Clinic

to 2,690 patients over the period 1st January 2016 to

8 June 2018 may have developed an effort to trust

the waqf system in a higher educational institution.

In fact, the observed success of PWZ in providing

the medical and dental services has brought the

attention of Perbadanan National Berhad to

contribute the RM700 thousand waqf fund for the

purchase of two intermediate shop-lots, premises for

the USMC and USIM-MAINS Haemodialysis

Centre (Muhd. Fadzli Rosli, 2018).

The PWZ was able to sponsor the activities with

a high positive impact to the development and

sustainability of University. It becomes a dedicated

unit that support the income-generating programmes

and incentives of the University. In 2019, PWZ has

given much attention and planning in developing the

students’ comfort as part of intellectual capital

through the building of students’ hostel, the Ummi

Maktum Research Centre and the students’ medical

hospital (Al-Abrar Bulletin, 2019).

In spite of those increasing amount of

contribution and additional number of people joining

the waqf practices, there are other normal issues to

be considered that usually associated with waqf

management in SIRC including the PWZ, such as,

the workforce is still at a low level compared to

other states (Johor and Selangor) with a more

systematic management. There is a need to increase

the number of staff and experts in relation to the

different programs and activities handled by the

institution. Another challenging issue, is how to

maintain the participation and cooperation given by

the public in continuing their waqf contribution. In

order to overcome this problems, the SIRC and the

PWZ must work hard in promoting more awareness

as to the benefits of waqf and also to develop more

sustainable activities for public purposes.

4 CONCLUSION

Conclusion

The study shows that creation of waqf funds in a

higher educational institution can increase its

dynamic and sustainable programs for social and

economic development. The PWZ strategies and

initiatives for the past years have assisted the

Universiti Sains Islam Malaysia to expand its

economy and also promote the marketing agenda in

attracting more agencies and organizations to

provide financial assistance to the objectives and

missions of the PWZ. In conclusion, the PWZ has

provided an alternative for a long-term and

sustainable source of income to the University’s

programs related to education, health and other

activities.

Recommendation

This study strongly recommends that PWZ has to

adopt the funding expansion mission provided in the

Malaysia Education Blueprint 2015-2025. The

University has to increase its global prominence

through the waqf financial fund providing

assistance to deserving international students,

especially those who are coming from Muslim

minority countries to attract international

collaborations.

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