Guest Blog by Hisham Dafterdar, CPA, PhD
Chairman, Awkaf Australia Ltd
The waqf is a feature of Islamic civilization; and it’s not so much about the grand mosques that awe and inspire, or the magnificent shrines that amaze and impress. It’s more about the schools and universities, the hospitals, orphanages and nursing homes that serve and care. It is about the poor, the needy, the homeless, the vulnerable and the under-privileged. It’s about healthcare, education and wellbeing. It’s about this life and about the next life.
The beneficiaries are the most essential constituent in the structure of the waqf. Without beneficiaries or ultimate charitable purpose, the waqf would be invalid. It is the beneficiaries who give the waqf its raison d’être and humanitarian identity. Beneficiaries are the motivation for donors and the inspiration for volunteers. Beneficiaries are the bases of awqaf’s classical categorization into charitable (khairy) waqf, family (dhurri) waqf and joint (mushtarak) waqf.
The waqf property and the conditions of the waqif are treated venerably as sacred items of the waqf. The concept of ownership of the waqf property separates legal and beneficial titles. The beneficial title involves a combination of rights, obligations and duties. Some fiqh scholars went so far as to say that the waqf belongs to the beneficiaries in the sense that the waqf was created for their benefit. Beneficiaries have the right to a share of the usufruct and not the corpus of the waqf. The nazir has the duty to manage the waqf property and the obligation to distribute the income to the beneficiaries in accordance with conditions of the waqif.
It is sometimes a challenge to identify the real beneficiary of a waqf. When a devout Muslim dedicates a portion of his wealth as a waqf because he believes this will weigh in his ‘scales of good deeds’ on the Day of Judgement, who is the real beneficiary of his benevolence? People want to be rewarded for everything they do even when acting out of compassion or piety. The endowment of worldly goods is a low price to pay to ensure entry into Heaven. Consider the waqf established by Lady Fatima, a member of the Mamluk dynasty of Egypt. Lady Fatima created a waqf for readers of the Holy Quran to make daily recitation at the graves of her children who pre-deceased her, and at her own grave after her death. The Quran readers then “blow” the accrued blessings (thawab) as a gift to the soul of the deceased. Who are the beneficiaries in this case? Are they the Quran readers who are paid by the waqf, or the deceased children who are gifted the blessings, or is it Lady Fatima, the waqif, before and/or after her death? Consider also the case of a waqf for a Madrasa where the teachers are paid a stipend to teach students who also receive cash allowance from the waqf. Can we rank beneficiaries in the order of payment and say that the teachers are the primary beneficiaries and the students the secondary ones? Or is it vice versa? The question then becomes how much one has to benefit from a waqf to count as a primary or a secondary beneficiary? What if the lessons are given via the internet? Or is the cash allowance and the physical presence of the students in the Madrasa building required to make them direct beneficiaries? If a waqf provides free medical services to children with disabilities, are the beneficiaries the disabled children or the poor parents who otherwise will have to pay for the medical services? If a waqf provides free veterinary services for animals are the beneficiaries the animals or the animals’ owners?
The basic rule for waqf revenue is that it should be distributed among beneficiaries according to the conditions of the waqif. However, if there is a drop in revenue or increase in expenses such that it’ll not be possible to provide for all beneficiaries, the asset or a portion thereof cannot be sold to make up for the shortfall. In this case who should take precedence over whom, or should the distribution be on pro-rata basis? Conversely, if there is a surplus in any one period, should this surplus be invested, held as a reserve, or redistributed to beneficiaries, or perhaps spent on some other charitable cause? Such questions will prompt us to reflect on a host of issues that confront the nazir in identifying the beneficiaries who are entitled against all other claimants if he is going to disburse awqaf funds fairly and equitably.
Knowing who the beneficiaries are can be more complex than what might seem. Awqaf nazirs are neither clairvoyant nor psychic, and beneficiaries are not all virtuous and honest. How the nazir identifies the beneficiaries will decide the way he can allocate the waqf usufruct. To determine the eligibility of a beneficiary involves reliable background checks and rigorous analytical diagnosis based on easily observable and verifiable indicators including the income level, social circumstances, legitimacy of the needs, conformity with the conditions of the waqif, and the availability of resources.
Managing a waqf organisation is generally more complicated than managing a commercial company of comparable size. Whereas in companies decisions are justified in terms of their effect on profitability and shareholder value. In awqaf decisions are commonly considered good if they create better values for their beneficiaries. When a company creates or adds value to a product or service, it generally recovers the cost by an increase in sales or in price, i.e. the customer pays for the created value. When a waqf organisation seeks to create or add value for beneficiaries, the cost cannot be recovered from the beneficiaries. Donors usually pay these costs. Being a beneficiary is different from being a customer. If customers are unsatisfied, they may switch to another brand or a competitive product. This choice is not available to beneficiaries. Unlike customers, dissatisfied awqaf beneficiaries can’t just take a benefit they get from a waqf and exchange it for another.
Most awqaf beneficiaries are not very clear about the waqf they are beneficiaries of. They are not privy to the waqf document and are not aware of its provisions. The majority are poorly educated and do not know how to approach the nazir regarding their entitlement. They do not know how to seek action against the nazir if they have suffered a hardship as a result of breach of the waqf conditions, and if they do, they have a slim chance of prevailing. With victims reluctant to report abuse, nazirs’ corruption frequently goes “under the radar”.
The reality is that the nazir has many stakeholders to deal with –waqifs, donors, regulators, contractors, staff and volunteers that distract him from devoting full attention to the beneficiaries’ needs. That is not to say that nazirs do not ask or get feedback from their beneficiaries. They sometimes do, but this is often done through the “eyes and ears” of volunteers who frequently receive a mixed bag of expressions of discontent and gratitude even when there are issues. The barrier that often goes undiscussed is anxiety. Communication with beneficiaries is one of the most difficult tasks as beneficiaries are unlikely to speak out lest they make the wrong statement. The negative feedback from such surveys does not give the nazirs reliable information about their beneficiaries that could help them to solve a problem or create change. It’s a challenge that shouldn’t be underestimated. Nazirs can overcome this barrier by putting in place a strategy of open and frank discussion with their beneficiaries that provides assurance and removes feelings of anxiety.
In family awqaf, the purpose is not always religious and the beneficiaries are not necessarily poor. Some family awqaf were established as wealth management tools, taking advantage of the rule of inalienability to safeguard their properties from falling into the wrong hands or to protect them from creditors, or as a tax planning strategy. The family waqf was also used as an instrument to circumvent Islamic inheritance rules, by depriving female descendants or disentitling them upon marriage, or distributing the estate equally between males and females or in any other way that would be impossible under the Islamic laws of inheritance. However, these cases are very few as the vast majority of family endowments have a charitable allocation and may ultimately convert to general charitable waqfs after two or more generations or if the family lineage discontinues.
The impact of religion on awqaf is deep and enduring. The purpose of the waqf is “qurba”, the performance of deeds for the pleasure of Allah. We often hear the plea to follow the objectives (maqasid) of Shariah not merely its dogmatic expressions. Otherwise we could be Shariah compliant without achieving the desired outcomes. The wealth we have control over is a blessing from Allah to be shared in ways that please Him. This means eliminating poverty, building capabilities, and creating opportunities. The waqf being a voluntary act of worship (sunnah), is a means of realizing all these objectives. Awqaf serve the spiritual needs of waqifs, just as they serve the mundane needs of beneficiaries. In awqaf, all stakeholders are beneficiaries and as such are better referred to as partners, because they constitute the community that make the waqf realize its objectives.