SS 60: Waqf

What this standard is about

Waqf is the Islamic endowment. A person locks an asset, a building, land, or money, so it can never be sold or given away, and dedicates its ongoing benefits to a good cause: a school, a hospital, the poor, or the founder's own family. An earlier waqf standard, SS 33, already existed. SS 60 replaces and updates it for modern practice.

The standard covers the definition of waqf, its types, its four founding elements, the conditions for each, how waqf assets may be used and invested, and how waqf institutions should be managed and supervised. It expressly allows modern forms: cash waqf, shares, investment funds, and sukuk.

Why it exists

Waqf has funded schools, hospitals, and public works across the Muslim world for over a thousand years. But the old rules were written for land and buildings. Today people want to endow cash, shares, and investment portfolios, and Islamic banks want to help manage and grow waqf assets professionally. The update brings the standard into the modern financial world while keeping the classical foundations.

The key rules, simply put

• Waqf means locking an asset (habs) so its ownership can never transfer, and donating its ongoing benefits to chosen beneficiaries.
• Once created, waqf is binding. The founder cannot take the asset back.
• By beneficiary, waqf can be charitable (public causes), family or dynasty waqf (descendants; it becomes charitable when no descendants remain), or joint (both).
• By asset type, waqf can hold specific assets such as real estate or usufruct rights, or run as an investment waqf whose assets are deployed to grow and sustain the endowment.
• Cash, shares, investment funds, and sukuk can all be made waqf.
• Waqf has four pillars: the declaration, which must be firm and take effect immediately; the founder; the asset; and the beneficiaries.
• The asset must give ongoing benefit while its essence remains. Things that are used up, like food, cannot be waqf.
• The founder's conditions must be followed as long as they do not contradict Shariah rules.
• Waqf assets must be managed, supervised, and invested prudently so the endowment lasts and keeps serving its purpose.

An everyday example

A woman endows $500,000 as cash waqf to fund scholarships. The capital is invested in halal investments, and each year only the profits pay for students' fees. The $500,000 itself is never spent. Her grandchildren are not beneficiaries; the scholarships serve the public, so this is a charitable waqf.

Words to know

• Waqf — an Islamic endowment; a locked asset whose benefits serve a chosen cause.
• Waqif — the founder who creates the waqf.
• Habs — locking or appropriation; preventing an asset from being transferred.
• Usufruct — the right to use something and enjoy its benefits.
• Sadaqah — voluntary charity in Islam.

Source

• AAOIFI Shariah Standard No. 60 (replaces SS 33) — official AAOIFI English text — https://estithmar.org.sa/wp-content/uploads/AAOIFI-SS.-60-Waqf-English.pdf
• Cash waqf under SS 60 — https://www.mdpi.com/1911-8074/13/4/76/