Islamic Good Governance for Waqf Institutions: A Proposed Framework

Introduction

Waqf refers “to making of ownership and donating the usufruct of that property to beneficiaries.” (AAOIFI, 2015). There are various types of Waqf in Islam; charitable Waqf, the family Waqf, the joint Waqf, and self-dedicated Waqf. For charitable Waqf, the income is channeled to charitable purpose. Through the family Waqf, the income or usufruct will be channeled to specific members of the donors. However, if no family members exist, that income will be dedicated to charity. Meanwhile, joint Waqf refers to the case whereby the donor donates the property to their family, and the income or usufruct is then shared accordingly. Lastly, for the self-dedicated Waqf, the donor holds the income from the donated property for himself as long as he is alive. Nevertheless, when the donor dies, the income will be dedicated to a charitable purpose (AAOIFI, 2015). It is based upon the hadith in which, the Messenger (May peace be upon him) of Allah (Subhanahu wa Taala) said: “When a man dies, his deeds come to an end except for three things: Sadaqah Jariyah (ceaseless charity); a knowledge which is beneficial, or a virtuous descendant who prays for him (for the deceased).” (Hadith narrated by Muslim, Book 13, Hadith 1383). Based on this hadith Islamic jurists have characterized the nature of Waqf as follows: Irrevocable, which refers to the lack of power for the Waqif to cancel his donation once the declaration had been undertaken by him; Perpetual, which has three different meanings; first, after the donor makes a declaration, a legally binding Waqf is automatically affected. Second, the Waqf cannot be limited to time, and lastly, the subject matters of Waqf remain eternal; Inalienable means that the donated property cannot be sold, given as a gift or inherited by family members (Iman & Mohammad, 2014).

In Islamic history, the Waqf institution has proven to be a major role for the socio-economic development of the Muslim Ummah in various fields such as education, health, social activities, and various others (Kahf, 2003). However, research to date on the governance of Waqf highlights the issue of poor governance of Waqf institutions in various aspects such as mismanagement of Waqf property, lack of regulations, accountability issues of the Mutawalli, and many others (Yaacob, Petra, Sumardi, & Nahar, 2015; Ihsan, 2014; Ihsan, Eliyanora, & Septriani, 2016; Awaludin, Nahar, Yaacob, & Bakar, 2018). In this regard, improving the accountability of the Waqf institution has become the most focused subject in most literature as part of finding the best remedies to the issue of poor Waqf governance. It is important to note that accountability has become the most crucial issue that is hampering the Waqf institutions. Many Waqf trustees fail to demonstrate their accountability as Waqf trustees and they have always been perceived negatively and are associated with dishonesty, corruption, and mismanagement. In addition, there is also a lack of evidence regarding how accountability has been operating in Waqf institutions (Ihsan et al., 2016). Some studies also indicate that there is no clear guideline as to how accountability in Waqf should be discharged (Ihsan et al., 2016).