Allocation of Waqf Surplus Income to Welfare
This criterion assesses whether the organization directs surplus income from its waqf (endowment) assets to community welfare initiatives after covering necessary maintenance and operational costs. For this criterion, ‘waqf surplus’ means net distributable income from waqf assets for the reporting period after (i) direct property/asset running costs, (ii) planned maintenance provision, and (iii) any deed-required retentions/capital maintenance/inflation-proofing, while ring-fencing permanent endowment capital. Surplus is calculated fund-by-fund and may be ‘income yield’ or ‘total return’ only where the deed and trustee resolution permit a total-return approach under applicable law and SORP disclosures. This aligns with the principle of preserving waqf capital (ḥifẓ al-māl) while addressing essential welfare needs (ḥifẓ al-nafs), ensuring that the asset remains intact and its yield is spent on beneficiaries, as exemplified by Umar’s waqf of Khaybar. It also embodies *Birr* (righteousness, Q2:177) and prevents wealth concentration (Q59:7).
- Does the organization have a documented policy for defining, calculating, and distributing surplus income from its waqf assets?
- Show how surplus is calculated and approved for EACH waqf fund/deed (including those with restricted beneficiaries).
- How do you prevent cross-subsidisation between waqf and non-waqf funds and between separate waqf deeds?
- Where surplus was carried forward, provide the Carry-Forward Memo, approvals, and monitoring evidence.
- What mechanisms are in place to identify and select community welfare initiatives that receive funding from the waqf surplus?
- How does the organization measure and report on the social impact and outcomes of the welfare initiatives funded by the waqf surplus?
- Waqf deeds or documents specifying the conditions of the endowment.
- Fund-by-fund surplus calculation worksheet and movement schedule.
- Allocation decision paper template with deed-check, Shariah sign-off, and risk rating.
- Carry-Forward Memo and tracker.
- Sample of grant files showing OFSI/sanctions screening, AML/CTF checks, safeguarding checks, COI declarations, and post-grant verification.
- Audited financial statements detailing waqf income, operational/maintenance expenses, and surplus calculations.
- Reports on community welfare projects funded by the waqf surplus, including budgets, activities, and impact assessments.
| Level | Rating | Description |
|---|---|---|
| 5 | 5/5 | Excellent surplus allocation with strategic welfare focus, independent assurance, and published case studies/toolkits. |
| 4 | 4/5 | Good surplus allocation with quarterly dashboards, outcome metrics, and transparent reporting. |
| 3 | 3/5 | Basic surplus allocation with fund register, annual surplus worksheets, and basic distribution logs. |
| 2 | 2/5 | Minimal surplus directed to welfare, non-compliant allocations, or significant transparency gaps. |
| 1 | 1/5 | No policy or no surplus deployed. |
Discussion (1)
📋 **Version updated: 1.0.0 → 2.9.7** **Changes:** Updated islamic_references from mizan-297.json
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