CASH WAQF AND ITS SIGNIFICANCE IN BUILDING THE

CASH WAQF AND IT’S SIGNIFICANCE IN BUILDING THE UMMAH TOWARDS PROSPERITY Presenter: Sheikh Muhammad Issa Deputy Secretary General BASUTA

Contents • • • Introduction Defining Cash Waqf? Shari’ah rulings on Cash Waqf Models How Cash Waqf benefits the Society? Conclusion

1. 0 INTRODUCTION • Waqf is one of the means of infaaq or giving charity, that is required and should be implemented by the Islamic community • The command for giving charity generally a was declared by Allah the Almighty in Chapter 3 verse 92 saying “ Never will you attain the good [reward] until you spend [in the way of Allah ] from that which you love. And whatever you spend - indeed, Allah is Knowing of it”.

Introduction (Contd. . . ) Abu Hurayrah (Allah be pleased with him) reported Allah's Messenger ﷺ saying; “When a man dies, his acts come to an end, except for three, recurring charity, or knowledge by which people benefit, or a pious son/daughter, who prays for him” ( )ﺭﻭﺍﻩ ﻣﺴﻠﻢ The rewards for Waqf and Charity will be continue to benefit the giver even if he dies as long as it is used for the welfare of the community

Introduction (Contd. . . ) • Waqf means to stop, to withhold a thing (e. g. the house is withheld for the mosque, which means that the revenue of the rent or usufruct by owner of the house, is withheld to spend on the mosque). • Waqf is a financial charitable institution established by withholding one's property to eternally spend its revenue on fulfilling certain needs depending on the choice and conditions made by the founder/giver • Once the property been created as waqf, it can never be given as gift, or to be inherited, or sold. It belongs to Allah and the corpus/waqf property always remains intact.

2. 0 Definition of Cash Waqf The terms, Waqf, habs and tasbil mean ‘to stop, to restrain’ and devoting a property or its usurfruct in the way of Allah. Cash Waqf, therefore is; “The confinement of an amount of money by a founder(s) and the dedication of its usufruct in perpetuity to the welfare of society”

Types of Cash Waqf There are two kinds of Waqfs: • Immovable property Includes land, fields, farms, or buildings such as mosques, schools, hospitals, or basic infrastructures such as bridges, roads, water supply etc. • Movable property Includes cattle, books, money/cash, crops and weapons, shares of Joint-Stock Company, etc. • Previously, waqf of building and land are the most popular forms of Waqf. Nowadays, cash waqf has become increasingly well-known, particularly because of its flexibility, which allows distribution of the Waqf’s potential benefit to be benefited by the poor anywhere

Beneficieries of Cash Waqf Beneficiaries of Cash-Waqf • Waqf Khayri, Waqf ‘Am (Public Waqf) is a cash endowment made by the founder to support the general good and welfare of society, the poor and the needy. • Waqf Ahl, Waqf Khas al-waqf al-dhurriy and Waqf ‘al-awlad are all the same and refer to family waqf/specific waqf. • Waqf Mushtarak (combined Public and Family Waqf) is a cash waqf

Characteristics of Cash-Waqf Irrevocability: This means that once the founder created the cash-waqf he cannot revoke it back, however, he/she can benefit from its investment/revenue. Perpetually: Once the cash-waqf is created it must be perpetual. This will ensure regular and continual support from the cashwaqf to financing needy areas in the Muslim society. Inalienability: this means that once cash is created as waqf no one can ever become the owner to alienate it, i. e. it becomes a ‘frozen asset’. It cannot be the subject to be given as gift, inheritance, or any alienation whatsoever.

3. 0 Shari’ah Ruling on Cash Waqf

Shari’ah Ruling on Cash Waqf Muslim scholars differ on legal permissibility of Cash Waqf into three main opinions namely; - One: Not permissible This is the position of Ibn Shash and Ibn Al-Haajib from malik Madh-hab and it’s the most correct position of Shaafii Madhhab and a prominent position of Hambali Madh-hab and Abu Hanifa and Abuu Yusuf of Madh-hab Hanafi

Shari’ah Ruling on Cash Waqf Second: Permissible with detestful Which is the official position of Maalik Madh-hab. (6/22) ( )ﻣﻮﺍﻫﺐ ﺍﻟﺠﻠﻴﻞ 3/16) ( )ﺍﻟﻬﺪﺍﻳﺔ ﺷﺮﺡ ﺍﻟﺒﺪﺍﻳﺔ 5/373) ( )ﺍﻟﻤﻐﻨﻲ 5/315) )ﺭﻭﺿﺔ ﺍﻟﻄﺎﻟﺒﻴﻦ Third: It is permissible This is the official position of Madh-hab Maalik and one of the two positions of Madh-hab Shaafi and a position from madh-hab Hambali. Imam Ibn Taymiyah accepted this position too. It is also the position of Muhammad ibn Al-Hassan As-shaybaaniy ﺣﻴﺚ ﻳﺮﻯ ﺃﻦ ﺍﻟﻤﻨﻘﻮﻝ ﺇﺫﺍ ﺟﺮﻯ ﺍﻟﺘﻌﺎﻣﻞ ﺑﻮﻗﻔﻪ ﺻﺢ ﻭﻗﻔﻪ ، ﻭﻫﻮ ﻣﻘﺘﻀﻰ ﻗﻮﻝ ﻣﺤﻤﺪ ﺑﻦ ﺍﻟﺤﺴﻦ (6/21) )ﺍﻟﺘﺎﺝ ﻭﺍﻹﻛﻠﻴﻞ ﻭﺗﻌﺎﻣﻠﻬﻢ ﺑﺬﻟﻚ ، ﻭﺍﻟﻔﺘﻮﻯ ﻋﻠﻰ ﻗﻮﻝ ﻣﺤﻤﺪ؛ ﻟﺤﺎﺟﺔ ﺍﻟﻨﺎﺱ : ﻗﺎﻝ ﻓﻲ ﺍﻻﺧﺘﻴﺎﺭ ( (3/48) )ﺍﻻﺧﺘﻴﺎﺭ ﻟﺘﻌﻠﻴﻞ ﺍﻟﻤﺨﺘﺎﺭ

4. 0 Legality of Cash Waqf • Cash Waqf falls under one of the three categories of Waqf i. e Waqf Al Manquul as opposed to Waqf Al ‘Uqaar.

Legality of Cash Waqf • Pillars of a Waqf There are four Pillars of Waqf ﺍﻟﻮﺍﻗﻒ -The Waqf Giver of Property (Movable or Immovable) ﺍﻟﻤﻮﻗﻮﻑ -The property given as Waqf ﺍﻟﻤﻮﻗﻮﻑ ﻋﻠﻴﻪ -The Usufruct (or benefit obtained) ﻭ ﻟﻲ ﺍﻟﻤﻮﻗﻮﻑ - The Waqf Manager ﺍﻟﺼﻴﻐﺔ The actual wording of the Waqf document • Cash Waqf falls under pillar three of these pillars

Legality of Cash Waqf ﺍﻟﺴﻨﺪﺍﺕ -Bonds (Hati Fungani)

Importance of Cash Waqf

5. 0 Cash Waqf Role in Bringing Properity • The establishment of Awqaaf institutions all over the world from Prophet’s era culminating in Ottoman Khilaafah was not only a religious duty by the Muslim but a philanthropic revolution • Currently, the potential of Awqaaf institutions is substencially unrealized since the abolition of The Ottoman Khilaafah in 1924 • Currently, it’s the conventional philanthropic institutions that are functioning effectively and one of the reasons is lack of Cash Waqf in our Awqaaf

Cash Waqf Role in Bringing Properity • Therefore, there is a strong need to re-evaluate the current Waqf system in Tanzania, its needs and develop a better approach for it financial management in order to increase its efficiency and benefits • One way to realize the full potential of any Waqf is to bring about Cash Waqf model, which will enable Awqaaf to increase and stimulate economic growth and bring about social and economic transformation to our society hence contributing to our national development

5. 0 Investment of Cash-Waqf • Mudarabah (partnership) has been recommended by earlier Muslim jurists. • The latest fatwa issued by Fiqh Academy Islam we have seen above, agreed that cash waqf can be invested in any shari’ah compliant mode of investment, such as Mudharabah, Murabaha, BBA, Musharakah, Istisna, etc. • The last two decades witness the revival of the institution of waqf and the creation of movable waqf i. e. cash waqf in almost all Muslim countries and Muslim minority countries.

Investment of Cash-Waqf The Waqf system had played a vital role in achieving development in the following areas: • Reduces government expenditure • Solve the problem of unemployment • Creates cities and commercial activities • Creates financial institutions. • Enhances the different sectors in the Muslim countries, agricultural, education, health, industrial, social and service sectors.

Cash Waqf Certificate Framework 4. 1. Cash Waqf Certificate Framework • Wa’qif is a person who donate some money as waqf by purchasing cash waqf certificate • Wa’qif expects return of the managed fund to be assigned for certain purpose, e. g. public facility development, poor people rehabilitation, etc. • The certificate can be bought in the name of family member, even if he/she is already dead.

Investment of Cash-Waqf • Nadzir (Cash Waqf manager) invests the collected fund in various investment portfolios. • In investing the Cash Waqf, Nadzir may; (1) invest the fund in Shariah (non interest) banking products of both domestic and overseas banks (2) Finance selected businesses (3) Establish new prospective businesses, or (4) Finance small and medium scale enterprises (SMEs). (See Figure 1 Below)

Cash Waqf in Indonesia

Investment of Cash-Waqf • To equip banks and other waqf management institutions with cash waqf certificate • To help collect social savings through cash waqf certificate (cash waqf certification can be done in the name of other beloved family member to strengthen family integration among rich families) • To help transform the collected social savings to social capital, as well as to help develop social capital market

Investment of Cash-Waqf • To increase social investment, to encourage rich communities’ awareness on their responsibility for social development in their environment • To stimulate integration between social security and social welfare. • In this way, cash Waqf will duly serve the underprivileged Muslim society and bring prosperity to them and the nation at large

Allocation of Profit from Cash Waqf Fund

Conclussion • Cash Waqf can bridge the gap between IFI’s and the society as it is easier to apply and can work free from conventional entanglements currently depriving the would be beneficiaries of Islamic Financial system • The is a need to have a national Waqf Board preferably comprising of CIFCA and Islamic Institutions currently holding Awqaafs. The board should be duly registered and should have both trained manpower and legality to do its job well • As cash waqf practice has not yet been popular in. Tanzania, cash waqf management institutions in Tanzania can replicate successful practices from other countries, such as Indonesia, Malaysia, Turkey, Bangladesh etc