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).
| Metric | Composite Waqf Surplus Performance |
|---|---|
| Target | All targets met |
| Frequency | Annual |
| Method | 1. Policy Exists (Gateway); 2. % Allocated (Target ≥70%); 3. % Deployed <12m (Target ≥90%); 4. Due Diligence Completeness (100%) |
| Unit | Composite Score |
Level 1: Initial/Ad-hoc
No formal process exists for calculating or distributing surplus waqf income. Any distribution is ad-hoc, inconsistent, and undocumented.
Level 2: Developing
An informal process is in place. Distribution is generally aligned with welfare goals but lacks formal policies, clear calculation methods, and consistent reporting. Non-compliant allocations may occur.
Level 3: Established
A documented policy exists. A 'Waqf Register' tracks funds, and annual surplus worksheets are maintained. Surplus is consistently directed to defined initiatives with basic distribution logs.
Level 4: Advanced
The process is optimized with quarterly dashboards tracking surplus, deployment timeliness, and carry-forward reasons. The organization measures social impact and reports transparently with outcome metrics.
Level 5: Optimizing
The organization is a benchmark. It employs independent assurance every 3 years, publishes case studies, and shares a toolkit for other operators. The cycle is fully integrated with Maqāṣid al-Sharīʿah.
Organisation Types
By Organisation Size
| Size | Applicability | Notes |
|---|---|---|
| Micro | exempt | Unlikely to hold income-generating waqf with surplus; basic restricted fund rules apply if relevant. |
| Small | partial | Must maintain a basic waqf register and restricted fund accounting; formal cost-recovery policies and decision templates are disproportionate. |
| Medium | full | |
| Large | full | |
| Major | full |
Applicable When
- The organization manages waqf assets.
- The organization generates surplus income from waqf assets.
- The waqf deed allows for the allocation of surplus income to welfare.
- The organization actively engages in welfare activities
- The organization holds mixed waqf and non-waqf funds and maintains separate tracking to prevent cross-subsidisation.
Not Applicable When
- The organization does not manage any waqf assets.
- The organization manages waqf assets but does not generate surplus income.
- The waqf deed restricts the allocation of income.
- The organization is purely commercial and does not engage in welfare activities
- Waqf deed restricts beneficiaries to non-welfare purposes (e.g., upkeep of a specific asset) unless lawful variations are obtained.
Discussion (1)
📋 **Version updated: 1.0.0 → 2.9.7** **Changes:** Updated islamic_references from mizan-297.json
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