3 Reasons Why You Should Establish a Waqf

Published on
August 7, 2023

We all know that donating to charity is a virtuous act in Islam. There are many different ways to donate in the path of Allah SWT, such as through Zakat, Sadaqah, Lillah, among others.

Each form of charity in Islam holds its own unique value and is appropriate for specific situations. Therefore, it is wise to diversify our donations across various types of projects and causes to ensure that we can address a variety of needs.

One underutilized way to donate is via establishing a Waqf. A Waqf is an Islamic endowment wherein an asset or cash is donated, with the income generated used to sustainably fund charitable causes.

It’s a structure that offers several advantages for both the donors and the communities they serve. Here are three compelling reasons why one should consider establishing a Waqf.

1. A Waqf Delivers Sustainable Impact

One of the key advantages of establishing a Waqf is the long-term, sustainable impact it creates. Unlike one-time donations, a Waqf continually generates income from its endowed assets, providing ongoing support for the chosen cause.

Look at the Waqf established by Uthman RA for example in the 7th century, where he purchased a well for the Muslim community. Over time, his donation has grown and today, it even encompasses a hotel. It has been reported that the money paid out from his Waqf is over 50 million Saudi Riyals each month. That’s equivalent to 13.3 million dollars.

The continuous stream of resources from a Waqf allows for developing and maintaining essential services such as schools, hospitals, and mosques, over an extended period. This offers a reliable foundation for communities, enabling them to build and grow with confidence and security.

2. A Waqf Enables Self-Sufficiency and Helps Solve Key Problems

Awqaf can be vital in building resilient and self-sufficient Muslim communities by allocating resources effectively, to create lasting, positive change for generations.

Awqaf can be established to fund sustainably:

  • Mosques, schools and universities - allowing everyone the opportunity to learn, empowering them to be value-generating members of society
  • Healthcare - by providing accessible and affordable healthcare services, Waqfs can ensure that community members lead healthier lives, reducing the burden of illness and increasing the overall quality of life
  • Social services - addressing the needs of vulnerable community members by establishing orphanages, shelters for the homeless, and support for widows and the elderly
  • Economic development - financing local businesses, community and infrastructure projects to boost economic growth, fostering self-reliance and financial stability

3. A Waqf Creates a Lasting Legacy

The ongoing income from a Waqf creates a lasting legacy for the donor, amplifying the blessings you gain from your initial donation and continuing to benefit you even after your death.

Allah SWT promises in the Quran to multiply the rewards for the charity you give; just imagine how much greater these rewards could be when your charity continues to grow and provide benefits to others over time.

“Indeed, those men and women who give in charity and lend to Allah a good loan will have it multiplied for them, and they will have an honourable reward.” (Qur’an 57:18)

Final Words

As Muslims, we must consider establishing and supporting Awqaf to strengthen our communities and address pressing challenges. By doing so, we can leave a lasting impact on the world, create a brighter future for generations to come, and gain good deeds that continue to benefit us even after our deaths.

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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.

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