What is an Islamic trust (waqf)
Waqf: (Pl: Awqaf/waqfs) a Waqf Literally means to stop, contain, or to preserve. According to the Sharia, a Waqf is a voluntary, permanent, irrevocable dedication of a thing or of part of wealth – in cash or kind – to Allah.
Once a waqf is created, ownership of the corpus of the waqf belong to Allah and will never be gifted, inherited, or sold. The benefit (manf’a) of the waqf may be used to support any Shari’ah compliant purpose.
A waqf can be created:
- In a person’s lifetime as a inter vivors gift, which becomes effective immediately.
- At a person’s death as a testamentary endowment / gift, which becomes effective upon death.
There are more restriction to the testamentary waqf: – may not exceed one-third of a person’s net assets – may not be made in favor of a legal heir.
In most Waqf deeds, the maker explains the reason for the Waqf : “The maker is seeking “the face of God the Almighty and the abundance of His momentous reward.”\ Followed by “We waste not the wage of one righteous in works.” Qur’an 18:30
Waqfs for schools and mosques and hospitals are standard. Mansur Qalawun Waqf for a hospital in Egypt survived 600 years but here is some examples of waqf reflecting the sophistication of Islamic charitable giving and planning: Waqfs for widow and divorcees Wqafs for feeding and caring for animals Waqfs for china/dinner ware Waqfs for clothing the poor and loaning jewlery Waqfs help orphans marry Waqfs for aging horses Waqfs to free prisoners Waqf to entertain the sick in hospitals
The waqf (plural awqaf) was the most permanent form of charitable giving.
With the affects of the waqf lasting long after the initial act of creating, the waqfs sustained Islamic institution building from hospitals, to mosques, to schools, to feeding and sheltering the poor.
Muslims have waqfs that survived for more than 600 years. The waqf that Mansur Qalawun created to establish a hospital in Egypt in the 13th century survived well into the 19th century.
Despite the importance of individual almsgiving and providing assistance to the poor, the charitable act par excellence in Islamic tradition was and continues to be the waqf.
A person sets aside a property as a waqf which legally means that said property is inalienable in perpetuity. It was dedicated to the cause of God (fi sabeel illah) and became a property of God (haqq Allah).
Again, Islamic charity is God-centric.
Historians are examining endowment documents as a source for the social history of Islamic societies. In Waqfs and Urban Structures, Richard Van Leeuwen found that the waqf institution was a determining factor in the growth and structure of Muslim cities both on the level of political and economic control and on the level of social cohesion.
It is not surprise then that almost 75 percent of arable land in the area of today’s Turkey, one-fifth in Egypt, one-seventh in Iran, one-half in Algeria, one-third in Tunisia, and one-third in Greece were held in waqfs.
The institutionalization of charity in Islam was part of building the Islamic civilization and maintaining economic equity and a safety net for the poor.
What does the Quran say about Islamic Waqf (trusts).
Expend from what We provided you before death befalls any of you and then he says: ‘My Lord, if only You held me back a little while, I would have given in charity and been among the virtuous.’ — Qur’an 63:10.
Charitable giving in Islam is God-centric. Muslims give lillah—to God or for God.
The obligation to comply with the divine moral virtue of giving is not an act of altruism or generosity because the poor and those in need actually have “a rightful share” in a Muslim’s wealth. The Prophet (PBUH) said that: “When a person dies, all of his or her good deeds end, except three of them – a Sadaqah Jariyyah (an ongoing charity), knowledge that benefits people or a righteous child who prays for him or her.
With this divine moral foundation, it is not a surprise that Muslims were and continue to be the most charitable people.
Guillam Postel, a 16th century French scholar and mystic observed during his travels through Muslim lands that charity for Muslims was a way of life:
You find poor people who have nothing to give understood that offering help to people consists not only of food and drink, but all kinds of needs: some spend their life time repairing bad roads by bringing stones, wood, filling holes . . . others . . . bring water to the road and they invite the passerby to drink . . . . And these kinds of people are most respected among the Muslims because they send their charity to paradise ahead of them.”
With a crystal clear directive to be virtuous in the Quran combined with numerous ahadith of the prophet (PBUH), Muslim scholars built an entire jurisprudence governing charitable giving, including the development of the waqf – which was the most important institution – not only for charity – but for building safety nets for communities and cities all over Muslim lands.
Umar said [to the Prophet], “O Messenger of God, I have acquired property that is dear to me. May I give it away as alms?” The Messenger of God replied, “Dedicate its principal as alms, but it may not be sold, nor given away as a gift, nor inherited.”
About Waqfs Islamic Trusts in America
A revocable waqf/trust is a legal document that you create in order to transfer title ownership of your assets to the trust. In the trust, you must appoint a trustee (yourself or a third party) to manage the assets in the trust for the beneficiary (you or anyone you choose) and to distribute the trust assets after your death.
Islamic Wills and Islamic Waqf (trusts) are estate-planning tools. A major difference between a will and a trust is effective date. A will goes into effect only after you die. A trust goes into effect the moment you create it.
Another difference is when your property is distributed to your beneficiaries. When you die the will directs your legal representative to carry out your wishes of how to divide your estate. By contrast, a trust is used for you as a trustee to manage your assets during your life and to distribute your assets after your death.