UNIVERSITI UTARA MALAYSIA

SEMESTERS (A222) 2022/2023

BIFS 3063

ESTATE AND WAQF PLANNING (B)

GROUP ASSIGNMENT 1

INDIVIDUAL ASSIGNMENT

Tittle:

Leakage in cash waqf property management (Ketirisan)

Submitted to
DR. AHMAD KHILMY BIN ABD. RAHIM
Prepared by
Rozanah Binti Razman (279682)

Date of Submission: 12 July 2023

Table of Content
Introduction…………………………………………………………………. 1
Concept of Waqf and Cash Waqf…………………………………………… 1-2
Pillars in Cash Waqf………………………………………………………… 2-3
Issues in cash waqf………………………………………………………….. 3-4
How to resolves the issues…………………………………………………... 5-6
Summary of Discussion……………………………………………………… 6
1.0 Introduction

Waqf is a charitable practice that is encouraged in Islam and highly recommended by The prophet
Rasulullah SAW.
The words of Allah swt in surah al-imran verse 92:

َ ‫ش ْى ٍۢء فَإِن ٱّللَ ِب ِهۦ‬

٩٢ ‫عل ٌِۭيم‬ ۟ ُ‫وا مِ ما تُحِ بُّونَ ۚ َو َما تُن ِفق‬
َ ‫وا مِ ن‬ ۟ ُ‫وا ٱ ْل ِبر َحت ٰى تُن ِفق‬
۟ ُ‫لَن تَنَال‬

'You, will never be able to achieve (the fact of) virtue and (perfect) devotion before you, donate part of
what you love and whatever you donate then indeed Allah knows it'.

In a hadith narration from Umar bin Sa'ad:

‘We ask about the beginning of waqf in Islam? The emigrants say it is the waqf of Umar, while the Ansar
say it is the waqf of Rasulullah saw’.

Therefore, cash waqf not only contributes continuous rewards to the mawquf alaih but also contributes
to the economic and social development of a country. Waqf in Islamic history is very effective in helping
those in distress and helping the government at that time govern the country. Nevertheless, the effectiveness
of cash waqf as an instrument and method of implementation to help those in difficulty has become a
question in the community about the extent to which the effectiveness of cash waqf can contribute to the
socio-economic development of the community and the country. Therefore, in this assignment, I will
discuss the issue of leakage in the management of cash waqf, which is an instrument of charity to help the
government reduce national expenditure and help the socio-economics of the community. (Muhammad
Hisyam Omar)

1.1 The concept of waqf and cash waqf

Waqf comes from the Arabic word ‘waqafa’, which means to prevent, and to hold. In terms of the
terminology, waqf means handing over property silently or openly. In other words, by withholding the
property, only the benefits are donated and given for the welfare of the community. The meaning of
withholding and preventing property is that the waqf property cannot be physically transferred, for example,
the property is sold, the waqf property is inherited through inheritance, mortgaged, and so on. whereas cash
waqf is the use of monetary instruments to carry out the charity of waqf. The money donated will be
collected, and the nazir (the manager of cash waqf) will be entrusted to manage the money and funds. Nazir
will collect the funds in a special fund, when the funds are enough then the money will be used for the
development of public facilities for the benefit of the community. For example, the construction of surau
facilities, mosques, public toilets, educational facilities, health facilities, and many more. Cash waqf is a
flexible and easy waqf alternative. The proof is that the Ottoman Empire managed to ease and reduce its

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administrative expenses, which thus helped the government provide various facilities that the Turkish
people needed at that time. Muhamad Asni, F. A. H., & Sulong, J. (2017).

In addition, the widespread use of cash waqf has resulted in a type of cash waqf, which is stock waqf
managed by the Islamic State Religious Council. Cash waqf funds will be collected into shares, and these
shares have value. These shares will be offered to anyone who is interested in buying them, and the proceeds
of the sale of the shares will be used for waqf for the socio-economic development of the community,
following the wishes of the participants. The difference is that stock waqf is more specific according to the
wishes of the participants. This means that the waqf contribution will be channelled to forms of facilities
according to the specifications of the participants. With the existence of this cash waqf, it helps people who
do not have property to perform the ibadah of waqf, and for those who cannot afford it, they can also
participate in cash waqf. (Mohd Ali 2019)

According to (Mohammad 2019), cash waqf is a form of charity that differs in process and procedure
from waqf. The definition of cash waqf is the freezing of a sum of money where the cash waqf proceeds
will be collected and the benefits will be donated to the community's needs and also for their welfare. Other
definitions of cash waqf are investment and shares. Cash waqf is also often linked to investment activities;
they waqf the cash after it is collected and linked to the investment element, which is liquidity. If the money
is liquid, then it has a positive effect because it is easy to liquidate. Individuals who contribute money to a
project such as the construction of a madrasah are considered to be among the owners of shares in the
project. However, the owners of the shares will not take the profit but rather make a cash waqf to worship
Allah SWT and do good deeds.

1.2 The Pillars of Cash Waqf

Hidayu, N. (2023) There are 4 pillars of waqf which are:

1. Al-Wakif (those who endow)

- The conditions for the first pillar, which is Al-wakif, are that a person must be the full owner of the
property and he must not be a slave. In this case, the cash waqf must identify the real owner of the
money donated. (Majlis Agama Islam Wilayah Persekutuan)

2. Al Mauquf (endowed property)

- The waqf must be a person of sound mind; otherwise, the waqf is a lunatic, intoxicated, and forced.
The next pillar of Al-mauquf, the waqf property must be clear in its existence or essence, and be
able to benefit from the property over a long period of time, the property must have value. In the
case of cash waqf, there is a difference of opinion among scholars. The majority of scholars think
that the nature of waqf property must be permanent and not perishable. In the context of cash as a

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 waqf instrument, opinions are based on the Hanafi and Syafie schools, where cash waqf is not only
limited to real estate; books, vehicles, and jewellery can also be waqf. Therefore, the National
Fatwa Council decided that cash waqf is allowed. Provided that the benefit of the cash waqf does
not depreciate in value. (Majlis Agama Islam Wilayah Persekutuan)

3. Al Mawqul'alaih (the beneficiary)

- The conditions of receiving waqf are that the person who receives it must exist and also be able to
receive the waqf property as well as utilise the waqf property to get closer to Allah SWT.
(MAIWP)

4. Sigh
- Sigha is a contract offer and acceptance, either in terms of speech, writing, or gestures, to express
the waqf's wishes as well as the utterance of the recipient of the waqf. Sighah must happen instantly,
not followed by other invalid conditions or a specific time limit. (MAIWP).

1.3 Issues: The Leakage in cash waqf management

1.3.1 Weak management structure.
Among the issues that arise in the management of cash waqf is the occurrence of problems in the
management structure. The approach and solution taken to raise awareness among the community about
cash waqf are not very effective and efficient. The proof is that the advantages of cash waqf are still under-
promoted. There are still people in the community who lack awareness or even have no awareness at all
about implementing waqf practises. This also happens because the parties involved in managing cash waqf
are not very consistent in providing information materials and cash waqf information.

Therefore, the source of information and community information becomes limited because the source
to get the information only needs to enter the website for each respective state or meet physically in the
office. As a result, in Selangor, we can see that not many individuals are interested in buying waqf shares
in cash through monthly salary deductions. Between 2004-2006, data shows that only 438 individuals were
interested in participating in cash waqf through monthly salary deductions. In addition, most of these
participants are public sector workers, such as workers from the Selangor Islamic Religious Council, the
Selangor Zakat Board, and the Selangor Islamic University College. At the same time, we can see that the
management involved, such as the Islamic Religious Council of Selangor, has not been very successful in
attracting the interest of private sector workers to be involved in this charity activity, which is cash waqf.
Ultimately, the community faces the problem of the limitations of the cash waqf concept itself. Their
perception of the concept of waqf itself is limited. Some of them only know that real estate is eligible for
waqf. However, other waqf instruments can also be implemented, for example, cash waqf. If they have
extensive knowledge of cash waqf, perhaps the benefits of this cash waqf will be able to be spread more
widely.

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1.3.2 Risk of embezzlement, corruption, and scammed.
(Mohammad 2019) In addition, the issue of the risk of misappropriation of cash waqf benefits is
very high due to widespread corruption and scam activities. In some foreign countries, such as Africa and
Latin America, the implementation of cash waqf is also used as a small loan facility for the poor. In this
developing country, this financial loan alternative is one of the most effective ways to help improve their
standard of living. This is because these small loans are used as a source of capital for them to do business.
Malaysia also does the same thing; that is, there are institutions that give small loans to the community to
cover their daily expenses. However, they charge certain fees on the loan.

The authorities that manage this cash waqf consist of the state Islamic religious council, the Malaysian
waqf foundation, and JAWHAR. There are several other organisations also involved, including NGOs,
Public Universities, Private Universities, Corporate Companies, financial institutions, and many more. The
proof is that the amount of cash waqf almost reached USD 35 billion as a result of management by various
parties. The development of cash waqf donation channels will make it easier for the community to do cash
waqf charity at their fingertips. This can be proven when the Federal Territory introduces ways of donating
cash waqf through CDM, internet banking, salary deductions, toyyib pay, waqf websites, and more. Cash
waqf contributions also show effectiveness by proving in 2021 that the total amount of cash waqf is different
from the amount of cash waqf collected through waqf agents. In 2021, cash waqf collection will be as much
as RM 567,605, while collection through waqf agents will be as much as RM 205,003. This raises some
questions among the community because they still have doubts and lack trust in the appointed waqf agents.
They are not very confident about the appointment of the waqf agent. because all financial transactions and
financial affairs are handled through waqf administrator agents. Dishonest individuals who have no
integrity in themselves will make the process and cash waqf transactions more risky. As a result, problems
such as misappropriation of money and corruption will occur. In fact, when waqf management is not
sensitive to the appointed employees and agents, it will cause major issues and problems in cash waqf
management. In addition, there are other issues that are quite worrying when the age of technology is
advancing and hackers are becoming more active with their very unethical and immoral work. Donating
cash or waqf online may expose you to scammers and hackers. (Ab. Halim, M. H., Wahid, H., & Mohd
Noor, M. A. 2023)

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1.4 How to resolve the Issue

1.4.1 The awareness and management system

Mokhtar, F. M., Sidin, E. M., & Abd Razak, D. (2015) among the suggestions to resolve the issues
raised above is to increase the level of understanding and awareness of the community towards the concept
of cash waqf and the management of the waqf system in a more systematic way. As we all know, there are
still many people out there who do not understand the implementation of cash waqf. Therefore, authoritative
parties such as Majlis Agama Negeri (MAIN), Yayasan Wakaf Malaysia (YWM), Jabatan Wakaf, Haji dan
Mal (JAWHAR), etc. need to work together to further increase the public's understanding of the cash waqf
concept. The way that can be implemented is through the dissemination of information through TV stations,
utilising social media such as Facebook, Instagram, TikTok, Twitter, and so on. Through this platform, the
community will gain awareness that there are many benefits and advantages to doing cash waqf. Apart from
that, they can get closer to Allah SWT. For example, the Selangor Islamic Religious Council Waqf website
and the Johor Islamic Religious Council Waqf website. Although this step has already been implemented,
it needs to be intensified and further refined. This is because not all communities in Malaysia have good
internet access. Therefore, another step that can be taken is to meet with the community, talk with them,
and so on. As a result, the community will have a broad understanding of the cash waqf concept. Their
understanding is not only limited to the definition of immovable property as a waqf method, but they also
understand that immovable property such as money is also allowed as an element of waqf. A systematic
management procedure that can be done by the State Islamic Religious Council (SIRC) is to create a bank
account to ensure that cash waqf collections are kept regularly and to prepare official forms such as
participation forms, official receipt books, mont hly salary deduction authorization forms, cash waqf receipt
statements, and cash waqf certificates. They can also help people who are in trouble. This will indirectly
increase the moral values of each individual. Among the steps already implemented by this authority is the
provision of websites in each respective state.

1.4.2 Transparency

In addition, Mokhtar, F. M., Sidin, E. M., & Abd Razak, D. (2015) Transparency in the management
of cash waqf funds needs to be improved. In the federal constitution of Malaysia, the ninth schedule, item
3(1), stipulates that all religious matters and affairs are under the jurisdiction of the sultan or the Yang-
Dipertuan Agong. Therefore, each state is allowed to set standards, guidelines, procedures, in the religious
laws of their respective states. Therefore, the State Islamic Religious Council was created to advise the king
on the matter. Every individual who is assigned to manage cash waqf must have high levels of honesty,

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trust, and integrity. In order to appoint those who will work in cash waqf management, some important
things need to be examined, such as education, cost taken, work experience, and some other aspects that
need to be emphasised. In addition, the staff selection and work sessions also need to be done in detail, and
before appointing staff, they need to be reminded of the rules that need to be followed. Employees also
need to be warned if they are not trustworthy when working to manage waqf funds. Among the procedures
that can be implemented by SIRC is to give authority in writing to the officer or staff assigned to receive
cash from the waqf to prevent the occurrence of malpractice issues. Another suggestion is that SIRC can
form a waqf management board that is in charge and responsible for managing waqf funds. The organisation
of this Board must be clear, and the officers involved must be people who have knowledge and
understanding of Islamic law, such as scholars and professionals. Furthermore, SIRC also needs to carry
out regular monitoring of the collection and contribution of cash waqf funds.

1. 6 Summary of Discussion

In conclusion, Islam is a religion that is complete and suitable for all ages; the characteristics of Islam
are comprehensive, and Islam is a religion of the true path. In fact, this religion provides many examples of
the best acts of worship that we can do. Among them is the cash waqf. Cash waqf can provide an opportunity
for those who are less able to do the charity of waqf. They also have the opportunity to make a long-lasting
waqf in their lives as well as get closer to Allah SWT. Cash waqf actually opens up great opportunities in
the Malaysian economy. This is because cash waqf activities are now increasingly being carried out. There
are even NGOs opening a waqf fund to donate to those in need. For example, well water waqf funds are
carried out in foreign countries, such as Africa. Even in Malaysia, there are waqf funds that are used for the
construction of mosques, madrasahs, and lodges. In short, the management of the collection and donation
of waqf funds must be done with a sense of servitude to Allah SWT so that the characteristics of mazmumah
such as fraud, dishonesty, corruption, and so on can be avoided. Being honest in managing cash waqf funds
can give us the best reward from Allah SWT.

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