What Role Does Waqf (Endowment) Play in Economic and Social Development?

Answered By Shaykh Dr. Muhammad Fayez Awad

Question

What role does waqf (endowment) play in economic and social development?

Answer

Praise be to Allah, Lord of the worlds, and peace and blessings be upon His noble messenger, his family, and all his companions.

Allah has blessed His servants by providing them with various ways to earn rewards and perform good deeds, among which is the institution of waqf (endowment).

Linguistic Meaning of Waqf

Waqf means to “hold” or “stop” something. For example, when someone says “I endowed this house (waqaftu al-dar),” it means they have dedicated it to the cause of Allah.

The Islamic Definition of Waqf

Waqf refers to dedicating a property or wealth that can be used for its benefit while preserving the original asset, and it must be allocated for a permissible cause. [Shirbini, Mughni al-Muhtaj]

Islam places great emphasis on the waqf system, encouraging people to race toward its rewards through various means. Waqf serves both worldly and religious purposes, protecting society from dangers such as hatred, envy, and the spread of chaos due to theft and robbery, which often result from poverty and need. By addressing the needs of the underprivileged, waqf acts as a preventative measure against crimes that arise from desperation.

Early Examples

One of the earliest examples of waqf in Islam was when ‘Umar Ibn al-Khattab (Allah be pleased with him) endowed a piece of land in Khaybar for the benefit of the poor in the Muslim community. Ibn ‘Umar (Allah be pleased with him) narrated that ‘Umar acquired a piece of land in Khaybar and sought the Prophet’s (Allah bless him and give him peace) advice, saying: “O Messenger of Allah, I have acquired land in Khaybar that I have never possessed more valuable property than it. What do you advise I do with it?” The Prophet (Allah bless him and give him peace) said:

“If you wish, you can hold the property (as waqf) and give its fruits in charity.”

So, ‘Umar made the property a waqf and declared that it should not be sold, gifted, or inherited, and its proceeds should go to the poor, relatives, slaves, the cause of Allah, travelers, and guests. [Bukhari; Muslim]

Similarly, Uthman Ibn Affan (Allah be pleased with him) bought the well of Ruma when the Prophet (Allah bless him and give him peace) said:

“Who will buy the well of Ruma so that he can share its water with the Muslims, and for him, there will be a better reward in Paradise?” [Ibn Khuzayma; Tirmidhi]

Uthman bought the well and made it a waqf for the Muslims.

Social and Economic Impacts of Waqf

Waqf has many social and economic impacts:

Social Impacts of Waqf

Islam has made waqf a means of protecting society and fostering cohesion among its members. It serves as a tool to remove hatred and envy by promoting cooperation and mutual support. Waqf protects the sanctity of private wealth, which often belongs to the wealthy and affluent, while also safeguarding the needy from hunger, poverty, and illness.

This charitable institution allows wealthier individuals to voluntarily contribute to causes that benefit the broader community, unlike zakat, which is obligatory. Waqf supports the needs of all segments of society, including the poor, students, widows, orphans, and travelers, and contributes to public welfare projects such as building mosques, schools, houses, canals, and digging wells.

Economic Impacts of Waqf

These include:

Developing Human Capital

Waqf plays a significant role in human capital development, including skills, ideas, knowledge, and physical abilities, which are just as essential to economic development as financial resources. [Asar al-Waqf fi Injaz al-Tanmiya al-Shamila, Shawqi Dunya]

Waqf has supported a wide range of sectors, such as education and healthcare, through the establishment of schools, educational institutions, and hospitals. These contributions improve the quality of the workforce by providing opportunities for learning various professions and skills.

Combating Wealth Hoarding

Islamic waqf also helps combat wealth hoarding, which is a major obstacle to societal progress and development. Hoarding prevents an essential component of wealth and production from contributing to economic activities, leaving resources inactive. [Asar al-Waqf ‘Ala Tanmiyat al-Mujtama‘, Mashhur]

Promoting Wealth Circulation

Waqf encourages the circulation of wealth. When wealthy individuals endow a portion of their savings in ways that generate profits for the beneficiaries, part of their wealth enters the commercial market. This increased demand stimulates production to meet consumer needs, which in turn lowers production costs and fosters healthy competition—both in terms of quality and quantity.

Thus, the Islamic economic system, through the institution of waqf, achieves a balance by ensuring the fair distribution of wealth and facilitating the circulation of money among the people.

Please refer to these books on waqf, its impacts, and rulings:

• “Al-Islam wa al-Tanmiya al-Iqdisadiyya” (Islam and Economic Development) by Shawqi Dunya;
• “Asar al-Waqf ‘Ala Tanmiyat al-Mujtama‘” (The Impact of Waqf on Community Development) by Mashhur;
• “Asar al-Waqf fi Injaz al-Tanmiya al-Shamila” (The Role of Waqf in Achieving Comprehensive Development) by Shawqi Dunya.

May Allah grant us the ability to seek rewards in ways that please Him, and all praise is due to Allah, the Lord of all worlds.

[Shaykh] Dr. Muhammad Fayez Awad

Shaykh Dr. Muhammad Fayez Awad, born in Damascus, Syria, in 1965, pursued his Islamic studies in the mosques and institutes of Damascus. A graduate of the Islamic University of Medina in 1985, he holds a Ph.D. in Islamic Studies from Bahauddin Zakariya University in Pakistan.

He has extensive experience developing curricula and enhancing the teaching of various academic courses, including conducting intensive courses. Shaykh Awad has taught Fiqh, Usul al-Fiqh, Quranic sciences, the history of legislation, inheritance laws, and more at several institutes and universities such as Al-Furqan Institute for Islamic Sciences and Majma‘ al-Fath al-Islami in Damascus.

He is a lecturer at the Sultan Muhammad al-Fatih Waqf University in Istanbul, teaching various Arabic and Islamic subjects, and teaches at numerous Islamic institutes in Istanbul. Shaykh Awad is a member of the Association of Syrian Scholars, a founding member of the Zayd bin Thabit Foundation, a member of the Syrian Scholars Association, and a member of the Academic Council at the Iman Center for Teaching the Sunna and Quran.

Among his teachers from whom he received Ijazat are his father, Shaykh Muhammad Muhiyiddin Awad, Shaykh Muhiyiddin al-Kurdi, Shaykh Muhammad Karim Rajih, Shaykh Usama al-Rifai, Shaykh Ayman Suwaid, Shaykh Ahmad al-Qalash, Shaykh Muhammad Awwama, and Shaykh Mamduh Junayd.