CONTENTS 2/5/2014 INCEIF 2

Transcription

1 INCEIF 2/5/2014 1

2 CONTENTS 1. Flexible Shariah Aspect of waqf 2. Main objectives of creating waqf 3. Current situation of waqf properties 4. Parameters for redeveloping the waqf properties 5. Innovation and creativity in redeveloping old waqf properties (current cases) 6. Modern applications of cash waqf 7. Proposal for CWFI as a fund raising scheme 2/5/2014 INCEIF 2

3 1. FLEXIBLE SHARIAH ASPECT OF WAQF i. Definition of Waqf ii. Essence of Waqf in Al-Quran & Hadith iii. Flexibility in deriving its law iv. Activating the ten stipulations to meet the current needs 2/5/2014 INCEIF 3

4 i. DEFINITION OF WAQF The terms, waqf, habs, tasbil all mean to stop, to restrain i.e. devoting in the way of Allah The confinement of an asset, movable or immovable, by a founder and the dedication of its usufruct in perpetuity to the beneficiaries 2/5/2014 INCEIF 4

5 ii. ESSENCE OF WAQF IN AL-QURAN & HADITH ب ه ع ل يم ل ن ت ن ال وا ال ب ر ح ت ى ت ن ف ق وا م م ا ت ح ب ون و م ا ت ن ف ق وا م ن ش ي ء ف إ ن للا By no means shall ye attain righteousness unless ye give (freely) of that which ye love; and whatever ye give, of a truth God knoweth it well. (Surat al- Imran, 3:92) إذا مات االنسان انقطع عمله إال من ثالث صدقة جارية وعلم ي نتفع به وولد صالح يدعو له The Prophet (s) said: When a man dies his acts come to an end, except three things, recurring charity, knowledge (by which people benefit), and pious offspring, who pray for him. 2/5/2014 INCEIF 5

6 iii. FLEXIBILITY IN DERIVING ITS LAW No clear reference to the word waqf in the Qur an, Early Muslim jurists relied on the Sunnah of the Prophet (pbuh) and the practices of his companions to derive its laws. Being a deduced law, this allows the different schools of fiqh a certain measure of flexibility in deriving its law, based on the following Qur anic verse; ي ر يد ه للا ب ك م ال ي س ر و ال ي ر يد ب ك م ال ع س ر God intends every facility for you; He does not want to put you in difficulties (Surat al-baqarah, 2:185). 2/5/2014 INCEIF 6

7 iv. ACTIVATING THE TEN STIPULATIONS (Give flexibility according to current needs) 1. Ziyadah (Increase) and Nuqsan (Decrease) 2. Idkal (Addition) and Ikhraj (Removal) 3. I ta (Granting) and Hirman (Dispossession) Beneficiaries 4. Taghyir (Replacement) and Tabdil (Conversion) 5. Istibdal (Substitution) and Ibdal (Exchange) Waqf Assets 2/5/2014 INCEIF 7

8 2. MAIN OBJECTIVES OF CREATING WAQF Avenue for founders to get continuous rewards. Fulfill the needs of beneficiaries according to the different societies and the different needs. Opening jobs for the majority of people. Ensuring the perpetuity of the waqf property. 2/5/2014 INCEIF 8

9 3. SITUATION Of WAQF PROPERTIES WITHIN THE PAST DECADES Huge number of old waqf properties are undeveloped. Founders condition are not fulfilled for many years. Rights of the beneficiaries are not met. Many unresolved court cases between trustees and family members. Role of waqf becomes idle, unproductive, and a burden to the different governments. The recent revival of this institution in Muslim and Muslim minority countries shows an optimism approached in galvanizing its role again. 2/5/2014 INCEIF 9

10 4. PARAMETERS FOR REDEVELOPING WAQF PROPERTIES i. Legal conditions ii. Types of waqf iii. Economics and investment climate iv. Financing options 2/5/2014 INCEIF 10

11 i. LEGAL CONDITIONS WAQF DEED/WAQFIAH Land title registered as waqf (masjid, religious school, hospital, agricultural land, etc.) Founder s condition (has to be respected) Beneficiaries (rights have to be met) Perpetuity of the waqf (has to be ensured) 2/5/2014 INCEIF 11

12 ii. TYPES OF WAQF Religious waqf: Mosques, Islamic school, cemeteries, shrines, etc. Investment waqf: Residential, commercial agricultural, industrial, cash. Social waqf: Schools, universities, hospitals, clinics, orphanages, elderly homes, etc. 2/5/2014 INCEIF 12

13 iii. ECONOMIC AND INVESTMENT CLIMATE Legal feasibility: Legal requirements fatwa/permits Market and sector study: which project to selected, and how to be implement it without violating founder s condition Project description: Location environemtn / religious, investment or social. Total cost: Budgeting of waqf project and which mode of finance to select. 2/5/2014 INCEIF 13

14 iv. FINANCING OPTIONS Traditional Modes of Finance Modern Modes of Finance Cash waqf finance 2/5/2014 INCEIF 14

15 5. INNOVATION AND CREATIVITY IN REDEVELOPING OLD WAQF PROPERTIES 1. Rumah well waqf in Madinah 2. Waqf al-baghdadi in Sudan 3. Al-Awqaf al-sinnariah of Sudan in Makkah 4. Mosque in Bencoolen in Singapore 5. Mujama al-zahab al-tijari in Sudan 6. Redeveloping old waqf buildings in Kuwait 7. Al-Khan Residential Building in Sharjah 8. Bandar Abbas in Iran 2/5/2014 INCEIF 15

16 CASE 1: RUMAH WELL WAQF/MADINAH Founder: S. Uthman Ibn Afan (during the 1 st century of Hijrah he bought the well from a Jewish for 20 thousand Dirham and donate it as waqf to benefit the community Waqf property: Rumah well Beneficiaries: Muslims and Non-Muslims to drink water 2/5/2014 INCEIF 16

17 Cont As time past and during the Ottoman, the trustees realized that the surrounding area is a fertile land to grow date palm tree. This act was continued and more trees were planted during the current Saudi Regime until 1550 date palm trees were grown. Through selling the dates, half its revenue is spend on poor and orphanage and the other half was saved in the bank. Objectives met: Continuous rewards to the founder. Feeding beneficiaries rather than providing water to drink Open jobs for farmers and traders. Saved money as a source of capital to finance other projects according to community s need. 2/5/2014 INCEIF 17

18 Cont Recently the amount saved in the bank was used to buy a land near al-haram and build 5 stars hotel. Again objectives met: - Continuous rewards to the founder from other channel. - Open more jobs for contractor, workers and hotel staff. (initial stage) - Shelter for visitor from the different countries The revenue generated from this hotel half of it for the poor and orphanage and the other half will be saved again in a bank under the name of S. Uthman for new productive project in the future. 2/5/2014 INCEIF 18

19 CASE 2: WAQF AL-BAGHDADI/SUDAN Waqf Property : Waqf al-baghdadi, a waqf land established in Trustees: Islamic Endowment Corporation IEC Beneficiaries: Part for the medical students of Khartoum University, part for the maintenance of the medical faculty, and part to create new waqfs. Finance: The IEC entered with the Islamic bank through traditional mode, long lease contract to redeveloped this idle waqf property into 8 story commercial building for 99 years. To ensure its perpetuity: Renting contract follows ijrat al-mithl /market price. IEC put a signboard on this property declaring it Waqf Property. Note: objectives of waqf has been met. 2/5/2014 INCEIF 19

20 CASE 3: AL-AWQAF AL-SINNARIAH SUDANESS WAQF IN MAKKAH Founder: Sultan of Sinar created a waqf in Makkah in 1880s Trustees: Islamic Endowment Corporation Beneficiaries: Sudanese pilgrims Mode of investment traditional: al-istibdal /substitution (since extension is needed for al-haram in Saudi Arabia, the trustee agreed to this mode - general Maslahah). The Saudi government replaced the Sudanese waqf, with another property in Makkah for the same beneficiaries. Note: objectives of waqf has been met. 2/5/2014 INCEIF 20

21 CASE 4: MOSQUE IN BENCOOLEN/SINGAPORE Waqf property: Mosque in Bencoolen Founder: Syed Omar Ali Aljunied in 1845 (simple structure) Trustee: In 1906 Rajab Ally bin Kassim Jeammedah requested that the mosque to be used as a place of worship and to receive rent and profit for the maintenance and payment of salaries to the khatib, Imam and Bilal. (inclusion of beneficiaries) (In 2000 the government wanted to make istibdal to this mosques in order to build a huge commercial building) 2/5/2014 INCEIF 21

22 Cont Trustees: MUIS Provider of funds: Baitualmal/Muslim treasure Mode of Finance: The project was financed through Musharakah Sukuk ($35million Musharakah sukuk was issued for the development of a mixed-use property) Warees : Provide the management expertise. In 2001 the mosque was redeveloped as part of a mixed development comprising of a commercial block and a 12-storey residential complex which was operated in May The mosque accommodate about 1,100 Muslims. 2/5/2014 INCEIF 22

23 INNOVATION/CREATIVITY IN DEVELOPMENT Objectives of waqf has been met. Met government demand. Condition of the founder respected Right of beneficiaries were met. Open jobs for a number of sellers, and provide goods and services to a number of customers. Provide accommodation for many people. 2/5/2014 INCEIF 23

24 CASE 5: MUJAMA AL-ZAHAB AL-TIJARI /SUDAN Waqf property: Waqf land left idle for almost a century, situated in the capital city of Kharotum Founder: unknown Beneficiaries: unknown Trustees: The Islamic Endowment Corporation Financer: The IEC entered with an Islamic bank through Musharakah Mutanaqisah/Decrease Sharing to redevelop the old waqf property into Gold Commercial Center which is situated in a good location. New Beneficiaries: Gold trader, sellers, works, customers, besides part of the rent is channeled to the poor and needy. 2/5/2014 INCEIF 24

25 CASE 6: REDEVELOPING OLD WAQF BUILDINGS/KUWAIT Waqf properties: idle waqf buildings (in total generated KD 511,968 only) Trustees: Kuwait Awqaf Public Foundation KAPF Financer: Islamic bank through Murabahah managed to reconstruct 38 old waqf buildings into new residential towers generating KD2,563,560 (5 times the previous amount) Beneficiaries: Accommodation for many families in Kuwait and a channel for poor and needy people in other countries. 2/5/2014 INCEIF 25

26 KAPF - PROJECT DEVELOPMENTS. Old waqf buildings. Redeveloped 2/5/2014 INCEIF 26

27 Case 7: AL-KHAN RESIDENTIAL BUILDING/SHARJAH UAE Founder: Ruler of Sharjah Trustees: Sharjah Awqaf Trust. Financier: IDB finance the construction of 12-storey residential building under ijara//lease finance worth $3.22 million. Beneficiaries: Poor and needy children of Comoros Islands, (situated off the south-east coast of Africa, to the east of Mozambique and north-west of Madagascar) 2/5/2014 INCEIF 27

28 AL KHAN RESIDENTIAL BUILDING SHARJAH, UAE Objectives of waqf has been met. Founder conditions has been fulfilled. Open jobs for contractors and workers to build it (initial stage) Accommodation for 48 families in Sharjah (i.e. 48 apartments). Open job for grocery shop/supermarket to service these area. Beneficiary are poor and needy people in other country (Comoros Islands) 2/5/2014 INCEIF 28

29 CASE 8: BANDAR ABBAS, IRAN Trustees: Iran Endowment Fund. Financier: IDB finance the project worth $8.04 million under Build-Lease-Transfer BLT for the construction of a residential and commercial complex. Beneficiary: 300 medium cost housing units. 2/5/2014 INCEIF 29

30 RESIDENTIAL AND SHOPS, BANDAR ABBAS, IRAN 2/5/2014 INCEIF 30

31 6. MODERN APPLICATIONS OF CASH -WAQF The last two decades witness the revival of the institution of waqf and the creation of movable waqf i.e. cash waqf in almost all Muslim and Muslim minority countries. Definition: The confinement of an amount of money by a founder(s) and the dedication of its usufruct in perpetuity to the welfare of society 2/5/2014 INCEIF 31

32 HOW TO CREATE CASH-WAQF {MOVABLE WAQF} THREE PARTIES TWO KINDS 1. Waqif/founder 1. Direct 2. Mutawalli/trustee 2. Indirect 3. Beneficiaries 2/5/2014 INCEIF 32

33 DIRECT CASH-WAQF 1. Waqif/founder 2. Mutawalli/Trustee 3. Beneficiaries Individuals Organizations Institutions cash-waqf INSTITUTION/ORGANI ZATION/ NGO ====== Accumulated cashwaqf accumulated amount 20% 80% Waqf school, college/university Waqf hospital, clinic, Old Waqf properties To ensure the perpetuity of direct cash-waqf the accumulated funds must be channeled directly to re-develop waqf buildings.

34 1. Waqif/founder INDIRECT CASH-WAQF 2. Mutawalli/Trustee 3. Beneficiaries Individuals Organizations cash-waqf INSTITUTION/ORGANI ZATION/ NGO ====== Accumulated cashwaqf 10% management 20% SFD Institutions School/college/ University Invested according to shariah evenue 70% Beneficiaries Hospital/clinic Any specified property To ensure the perpetuity of indirect cash waqf the accumulated funds must be invested in any halal project and only the revenue generated can be channeled to the beneficiaries, the management expenses and to add to the capital as a Self- Finance Device (SFD). 34 2/5/2014

35 CASE 1: WAQF SHARES/SUDAN Waqf property: Idle waqf land located in the capital city (Abu- Jinzir) Founder: Unknown Beneficiary: unknown Trustees: Islamic Endowment Corporation Financier: self funding through waqf shares, the IEC issued waqf shares for an amount of SP 90 million the cost of building 10-storey shopping complex (i.e. 88 shops). Beneficiaries: open jobs for trader, sellers and services for customers, besides allocating part of the rent to the poor and needy. 2/5/2014 INCEIF 35

36 CASE 2: COMPULSORY CASH-WAQF MODEL/SINGAPORE Trustees: MUIS Founders: - Semi-compulsory monthly contributions are made by Muslim employees in Singapore depending on their monthly gross income through an automatic check-off system. The amount deducted from the salaries is channelled through the Central Provident Fund CPF, to Singapore Islamic Council (MUIS) who acts as the trustee. Beneficiaries: The collected amount is channelled to finance charitable purposes such as building mosques, educational programs dau a centre, building old waqf buildings, etc. 2/5/2014 INCEIF 36

37 7. PROPOSAL FOR CWFI AS A FUND RAISING SCHEME Trustees: Islamic religious councils Founders: individuals, institutions, organizations, companies, banks etc. Fundrasing: cash waqf through salary dedication scheme similar to zakah Beneficiaries: redeveloping the old waqf buildings to regain their role in fulfilling the condition of the founders and in meeting the beneficiaries rights.

38 Monthly income RM PAYMENT OF ZAKAT THROUGH TAX REBATE Income tax payment RM Considered 1 wife & 1 child Zakat Payment RM Considered 1 wife & 1 child Taxed amount RM Cash waqf 2,500 Nil , , , , , , , , , , , , , , , , , , , , , , ,

39 ENCOURAGING PEOPLE TO CREATE CASH WAQF THROUGH TAX REBATE If we assume 10 million person would like to create cash waqf through tax rebate paying RM100/mth on average: 10,000, x RM100= RM 1Billion RM 12 Billion/year i.e. $3billion/year This amount can be doubled and multiplied if all organizations are called to participate in CSR through this CWFI for few years (2-3 years) for the development of all waqf properties.

40 ESTABLISHMENT OF CASH WAQF FINANCIAL INSTITUTION CWFI.ri Individuals Organization s Banks Institutions Companies Islamic Religious Councils as a Trustees to manage the Accumulated cash waqf e.g. RM 1 billion and to direct it to redevelop the old waqf buildings List of old Waqf properties

41 2/5/2014 INCEIF 41