Non-profit organisations seek to build resources that enable them to continue their mission without making their programmes dependent on a new grant or the success of a seasonal fundraising campaign. Waqf may be one way of supporting this, provided it is established for a clear purpose and managed appropriately.
However, a waqf does not mean that an organisation will receive a steady income as soon as contributions have been collected. It is an arrangement in which an asset is dedicated to a specific purpose, managed according to its terms and the applicable regulations, with its benefits or returns used within the approved framework. The asset might be property, funds or investment units, but the forms available and the rules governing them vary between countries. For example, the Saudi General Authority for Awqaf lists forms that include physical and value-based waqf assets, as well as waqf investment funds.
For this reason, the decision to establish a waqf should not begin with choosing a campaign name. It should begin by identifying the need it will address, the size of the asset required, the party responsible for managing it, and the organisation’s ability to meet its costs and manage its risks over time.
1. What is waqf, and how does it differ from an ordinary donation?
In its familiar form, waqf involves dedicating money or an asset to a defined benefit, while managing the asset and using its benefits or returns according to the waqf’s terms and applicable requirements. An ordinary donation, by contrast, may be used directly to fund a programme, service or current need, in line with the purpose for which it was given.
The difference lies in the purpose and how the contribution is used:
| Type of contribution | Purpose and use |
|---|---|
| Contribution to a waqf asset | To create an asset or support an existing waqf according to its structure and terms |
| Donation to an ongoing activity | To fund a current service, programme or need in line with the stated purpose |
| Donation to a recurring campaign | To support a stated need through ongoing fundraising; repeating the campaign does not automatically make the funds a waqf |
Rules and practices relating to cash or investment assets may differ, so an organisation should not assume that every contribution collected for a long-term campaign is a waqf, or that it can use the funds as it sees fit. Contributors should be told clearly what they are helping to fund, who will manage the money and how its benefits will be used.
2. How can waqf support sustainability?
A waqf may help provide a recurring resource for a continuing purpose, such as scholarships, healthcare or the operation of a charitable facility. However, this support depends on the asset’s value and performance, the costs of managing it, and the terms governing its use. Returns and asset values can change, and investments may go through periods of poor performance.
It is therefore important to distinguish between the value of the asset, its gross return and the net amount available for distribution. Gross return is not necessarily the amount that can be allocated to programmes: management and maintenance costs may apply, and the waqf’s policy may require some returns to be reinvested to preserve the asset.
A hypothetical example to illustrate the size of the asset
Suppose an organisation wants to support scholarships with SAR 60,000 each year. For calculation purposes only, it assumes that the net annual proportion available for distribution, after costs and amounts set aside to preserve the asset, may be 4%.
On this assumption, the estimated asset required would be:
SAR 60,000 ÷ 0.04 = SAR 1,500,000
This example does not recommend a particular rate of return or guarantee that it will be achieved. If the net return available for distribution is lower, the organisation may need a larger asset or an additional contribution. The example also excludes the costs of establishing the waqf and does not replace an investment assessment or legal and Sharia review.
This type of calculation turns the idea of ‘a waqf for education’ into a question that can be assessed: how much annual support is needed, and what size of asset might be required under different scenarios?
3. Waqf does not replace every funding source
Waqf is not the most suitable solution for every need. A charity may need urgent funding to provide assistance, a grant to deliver a specific project, or donations to cover current costs. These needs differ from the creation of a long-term asset.
| Funding route | Typical purpose | Nature of support |
|---|---|---|
| Project funding | Delivering defined activities and outcomes | Linked to the project period and funding conditions |
| Fundraising campaign | Covering a stated need | Governed by the campaign’s purpose and conditions |
| Waqf | Dedicating and preserving an asset, then managing its benefits | Linked to the asset, its returns and the waqf’s terms |
An organisation may use more than one route at the same time, but each serves a different purpose. If a charity has a serious operating deficit, it should not assume that establishing a waqf will resolve it quickly; creating and managing an asset may take time and resources. Nor should contributions designated for a current activity be used to create a waqf, or the reverse, without a clear basis and any required approval.
4. When is waqf suitable for an organisation?
There is no single financial threshold or stage that determines whether waqf is suitable for every organisation. A charity can assess its readiness across four areas:
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Need: Is there a continuing or long-term purpose that could benefit from waqf returns?
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Scale and viability: Can the organisation raise an asset that is proportionate to the need, after accounting for set-up and management costs?
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Organisational readiness: Is there a qualified party to manage it, along with accounting, oversight and disclosure policies?
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Regulatory and Sharia suitability: Does local law allow the proposed structure, and what approvals or licences are required?
If the organisation does not yet understand its future needs or lacks the capacity to manage an asset, it may need to strengthen its financial planning, controls and existing income streams first. Delaying a waqf until the organisation is ready is not the same as rejecting it; it may protect both the organisation and its contributors from an arrangement it cannot manage.
5. What should be settled before inviting public contributions?
Before launching a waqf campaign, the organisation should be able to explain its main elements.
Purpose: What need will the waqf serve? Will it support education, healthcare, a particular group of beneficiaries or a charitable facility?
Asset and creation process: Will contributions create a new asset, purchase an existing one or support an established waqf? What process will turn the contributions into a waqf asset under local law?
Management and trusteeship: Which party will safeguard and manage the asset, oversee it, and monitor whether it is being used for the stated purpose?
Returns and costs: How will the amount available for distribution be determined? What are the costs of establishing, managing, maintaining and investing the asset? What portion, if any, will be reinvested under the waqf’s policy?
Risks: What might happen if returns fall, the asset requires major maintenance or it cannot be operated? How will the organisation respond?
Regulatory and Sharia framework: Which authority is responsible, and is registration, licensing or approval required before fundraising or establishing the waqf? This must be checked in the relevant country. In Saudi Arabia, the General Authority for Awqaf states that fundraising to establish waqf falls within its remit. This is specific to the Saudi context and should not be applied to other countries.
6. Explain the difference between a waqf contribution and funding for an ongoing activity
If a campaign aims to create a waqf asset, it should say so and explain the asset’s purpose and how its benefits will be managed, without presenting returns as guaranteed.
If a campaign is funding a current activity, such as providing meals, paying for treatment or delivering a training programme, it should describe that purpose accurately rather than use the term ‘waqf’ simply to suggest sustainability.
An organisation may run both types of campaign in support of the same mission: one to fund an education programme this year, and another to create an asset whose returns are intended to support education in the future. The campaign descriptions, budgets, accounts and uses of funds should clearly distinguish between them so contributors understand what each contribution supports.
7. Governance and disclosure continue after fundraising
A successful campaign does not, by itself, prove that an organisation is ready to manage a waqf. Managing the asset requires clear responsibilities and authority, documented decisions, performance monitoring, risk management and procedures for addressing conflicts of interest.
The roles of the parties should be clear: who created the waqf or dedicated the asset, who is responsible for its trusteeship or management, who reviews the accounts, and who benefits from the returns under the waqf’s terms. Depending on the asset’s size and nature and on local regulations, a greater separation between management and oversight may be appropriate. Specialist work on waqf development also highlights the importance of professional management and a suitable governance framework.
The organisation should also have a regular way to share appropriate information with stakeholders, such as the asset’s condition, returns, expenditure, use of funds and any material changes. Disclosure should comply with applicable regulations and the waqf’s terms, while protecting beneficiaries’ and stakeholders’ personal information.
8. The role of a digital platform in a waqf campaign
A digital platform may help present a campaign and make it accessible to contributors, provided that this type of campaign is supported by the service and permitted under the platform’s terms and local regulations. Publishing a campaign on a platform does not, by itself, legally establish a waqf or make the platform the owner or trustee of the asset.
When using a platform such as Ensany, each party’s role should be described according to the actual arrangements: the organisation leading the initiative is responsible for defining its purpose and structure and identifying the managing party; the platform provides its technical services under its terms; and contributors decide whether to participate based on the information presented. Ensany’s website describes campaign-launch services for charities, but that alone does not establish that the platform creates or manages waqf assets. The organisation should therefore verify campaign eligibility and service terms before referring to the platform in its campaign materials.
9. How should an organisation monitor a waqf?
The amount raised at launch is not enough to measure a waqf’s success. The organisation needs financial indicators and measures of whether the waqf is fulfilling its purpose:
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Net returns available for distribution after costs and amounts retained to preserve the asset.
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Changes in the asset’s value and condition, as appropriate to its type.
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Management and maintenance costs in relation to the asset and its returns.
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Compliance with the waqf’s terms and designated uses.
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Regularity of reporting and financial review.
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The amount that has actually reached the relevant programme or beneficiary group.
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Existing risks and the actions taken to manage them.
These indicators should be considered together. An increase in the asset’s value is not sufficient if its benefits are not being used for the stated purpose. Conversely, a lower return in one year does not necessarily mean that the waqf has failed, but it should prompt a review of performance, context and obligations.
10. Practical steps for making the decision
An organisation can organise its decision in four steps:
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Define the long-term need: Which programme or service requires recurring support, and what annual amount is being targeted?
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Estimate the asset required: Use hypothetical scenarios for net returns available for distribution, and include set-up, management and maintenance costs. Do not treat any expected return as guaranteed.
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Check readiness: Define the structure, managing party, oversight and accounting arrangements, and complete the local regulatory and Sharia review before fundraising.
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Explain the plan clearly: Tell contributors the purpose, nature of the asset, how returns will be managed, the costs and risks, and what will happen if the campaign does not reach its target.
The organisation can then decide whether to launch the waqf, delay it until it is ready, or use another funding route at this stage.
Conclusion: sustainability requires a suitable asset and responsible management
Waqf can support a non-profit’s sustainability when it addresses a long-term need, is proportionate in scale, and is managed according to clear terms and a sound regulatory framework. It is not simply a long-running fundraising campaign, a guaranteed source of income or an automatic replacement for grants, donations and earned income.
Before launching, the organisation needs to know: What need will the waqf serve? What size of asset might be required? Who will manage and oversee it? What are its costs and risks? Which approvals are needed?
If the organisation cannot answer these questions, it should complete its planning and checks before inviting public contributions. If the answers are clear, waqf may become a considered part of its funding mix, preserving the purpose for which it was established and enabling its benefits to be used according to its terms.
