Islamic Philanthropy: Exploring Zakat, Waqf, and Sadaqah in Islamic Finance and Economics

© 2022, Palgrave Macmillan

Philanthropy has a positive impact on the economy by benefiting people through the property, facilities, services, charities, buildings, and other tangible and intangible objects, ultimately enhancing social cohesion. It can also reduce social jealousy and hatred among social classes, leading a country toward a welfare state. However, there is a debate on whether social programs should be undertaken by the government or the voluntary sector (Schuyt 2017). Islamic philanthropy is recognised as new economics and a part of welfare economics, and incorporating Islamic philanthropy into the welfare economic system remains a challenge. The current studies on philanthropy have been heavily influenced by the Christian tradition, with no mention of the Islamic tradition’s instruments and principles (Leat 2016). Therefore, this book aims to examine the comprehension of philanthropy from the Islamic tradition to shed light on the debate on the paradigms of ‘state or market’ and ‘welfare state or philanthropy’.

This edited book combines contributions from the Conference on Philanthropy for Humanitarian Aid, organised jointly by Sultan Sharif Ali Islamic University and the International Research Center of Islamic Economics and Finance, International Islamic University College, in collaboration with the Islamic Research and Training Institute. It examines Islamic philanthropy, which covers three main spectrums of activity: zakat (almsgiving), waqf (endowments), and sadaqah (public charity). In Islam, philanthropy includes various activities with different goals and principles. Zakat is used as an aid to relieve human suffering. Waqf is an effort to increase the potential of individual humans and advance society with the principle of maximising the potential of individuals and society. Sadaqah is used as a reform effort to solve social problems. Philanthropy as civic engagement seeks to build better community structures and services and is directed by civic responsibility.

The book, edited by Abdul Ghafar Ismail, Rose Abdullah, and Muhammad Hasbi Zaenal, consists of five parts, including an introduction and conclusion. Part 1 is an introduction consisting of three chapters, where the editors introduce topics that will be discussed in the following 18 chapters (pp. 3-22). In Chapter 2 (pp. 23-49), Muhammad Hasbi Zaenal, Abdul Ghafar Ismail, and Muhammad Hakimi Mohd. Shafiai discuss the understanding of philanthropy from an Islamic perspective, which was recently recognised as new economics by the American Economic Association in early 2020 and became part of welfare economics. Chapter 3 by Salman Ahmed Shaikh discusses the solutions offered by Islamic finance through the underlying value system and worldview and through a series of commercial and social financial institutions to intervene in development assistance through and beyond the markets (pp. 51-72).

The following five chapters are included in Part II, which discusses waqf. This part was initiated by Rose Abdullah, Khairul Hidayatullah Basir, and Nur Haziyah Abdul Halim, who examined the obstacles to developing waqf land in Brunei Darussalam and explored how to overcome these obstacles to realise the potential economic value of waqf land in Chapter 4 (pp. 75- 91). In Chapter 5, Mehmet Bulut and Cem Korkut investigate the history of cash waqf in the Ottoman Empire as a model of altruistic finance (pp. 93-111). Chapter 6 by Ruslaina Yusoff, Shariful Amran Abd Rahman, Wan Nazihah Wan Mohamed, Parichard Benrit, and Faizah Darus examines the relevance of the Theory of Planning Behaviour in predicting student intentions to donate cash waqf in Malaysia and Thailand (pp. 113-133). Samsinar Sulaiman, Shifa Mohd Nor, and Suhaili Alma’amun propose an entrepreneurial financing mechanism by integrating crowdfunding and waqf as Sharia-compliant crowdfunding in Chapter 7 (pp. 135-150). In Chapter 8, Marhanum Che Mohd Salleh, Nurdianawati Irwani Abdullah, Nor Azizan Che Embi, and Nan Noorhidayu Megat Laksana examine the impact of flooding on Malaysian society, investigate the experiences of flood victims living in flood evacuation centres, and propose permanent flood evacuation centres based on the principle of waqf (pp. 151-170). Shahida Shahimi, Siti Hanisah Fuad, and Rabiatul Hasanah Mahmood propose cash waqf as a means of environmental and human protection from the haze crisis in Malaysia in Chapter 9 (pp. 171-181).

Part III discusses zakat, which consists of five chapters. Hendri Tanjung and Nurman Hakim review the subject of zakat, which has been explored by previous studies in Chapter 10 (pp. 185-195). In Chapter 11, Norhaziah Nawai and Farah Shazwani Ruzaiman review the literature on zakat distribution and its impact (pp. 197-212). Chapter 12 by Indah Piliyanti and Agni Alam Awirya examines the role of state Islamic higher education in optimising Islamic philanthropic studies and Islamic philanthropic organisations in Indonesian universities (pp. 213-228). In Chapter 13, Ajeng Pratiwi and Umma Sa’ida offer the GO ZAKAT mobile application to optimise the collection of zakat funds in Indonesia (pp. 229-237). Kamaru Salam Yusof, Abdul Ghafar Ismail, and Muhammad Hasbi Zaenal analyse the potential of zakat funds for disaster relief centres in managing disasters in Chapter 14 (pp. 239-251).

The following four chapters are included in Part IV, which discusses zakat. This part was initiated by Luqman Zakariyah, Suhaimi Bin Mhd Sarif, Azman Bin Mohd Noor, and Rahmah Bt. Ahmad Osman, who analyse the investment strategy of tabung masjid (mosque donation fund) in Malaysia for the fulfilment of maqasid al-syariah (purposes of Islamic law) in Chapter 15 (pp. 255-274). Chapter 16 by Hussain Mohi-Ud-Din Qadri examines whether the Khanqahs and Sufi Shrines of Pakistan, as ‘faith-based organisations’, contribute significantly to society’s social and economic development (pp. 275-292). In Chapter 17, Muhammad Haron explores how faith-based organisations contribute to addressing refugee crises and natural disasters and evaluates their impact on promoting South Africa’s philanthropic image (pp. 293-313). Chapter 18 by Roshayani Arshad, Nawal Kasim, Ruhaini Muda, and Chakir Ahmed proposes a model framework for philanthropic organisational governance that incorporates the antecedents and consequences of good governance in Malaysia (pp. 315-332). In the last chapter in Part V, the editors summarise the previous chapters and recommend some policies (pp. 343-350).

One of the advantages of this book is its wide and comprehensive coverage of material on zakat, waqf, and sadaqah. This book examines the origins, basic principles, and historical development of these three types of philanthropy in Islam, as well as contemporary practices and current issues in Islamic finance and economics. The book also offers models for developing Islamic philanthropy and policy recommendations. Additionally, it examines contemporary issues and challenges in Islamic philanthropy, such as the role of technology in facilitating the payment of zakat and the impact of the COVID-19 pandemic on charitable giving in the Muslim world. While the book provides a clear and easy-to-understand overview of the subject matter, readers new to the topic may find some of the more technical aspects challenging to follow. There are also some deficiencies, such as the absence of a glossary, inconsistencies in writing references, inconsistencies in Arabic transliteration, and other technical errors that reduce the book’s excellence. However, readers with a basic understanding of Islamic principles and Islamic finance will be able to grasp the content of this edited book comprehensively.

Overall, this book is an essential contribution to Islamic finance and economics, particularly in exploring the role of zakat, waqf, and sadaqah in promoting social welfare and economic development in Muslim communities. The book is well-written, informative, and engaging, providing valuable insight into today’s field challenges and opportunities. Given the growing importance of Islamic finance and economics in the global economy, this book makes a timely and relevant contribution to the related literature. Therefore, this book is highly suitable for graduate and undergraduate students, policymakers from governmental and non-governmental institutions, practitioners in the Islamic finance industry, and researchers in Islamic finance and economics.

Acknowledgment

This work was supported by the Lembaga Pengelola Dana Pendidikan (LPDP) under the Ministry of Finance of the Republic of Indonesia and the Beasiswa Indonesia Bangkit (BIB) under the Ministry of Religion of the Republic of Indonesia.

Additional information

Notes on contributors

Ubbadul Adzkiya’

Ubbadul Adzkiya’ is a lecturer at Universitas Wahid Hasyim, Semarang, Indonesia. He is pursuing his Ph.D. at the Department of Shariah Economy, Islamic Studies, at the School of Graduate Studies, Walisongo State Islamic University, Semarang, Indonesia. His research interests include Islamic Economics, the History of Islamic Economics, and Socio-Economics.

Anis Fittria

Anis Fittria is a lecturer at Walisongo State Islamic University, Semarang, Indonesia. She is pursuing her Ph.D. at the Department of Islamic Jurisprudence, Islamic Studies, at the School of Graduate Studies, Walisongo State Islamic University, Semarang, Indonesia. Her research interests include Sharia Economics, Islamic Economics, Islamic Studies, and Social Entrepreneurship.

Syamsul Wathani

Syamsul Wathani is a lecturer at STAI Darul Kamal NW Kembang Kerang, Nusa Tenggara Barat, Indonesia. He is pursuing his Ph.D. at the Department of Islamic Studies, at the School of Graduate Studies, Sunan Kalijaga State Islamic University, Yogyakarta, Indonesia. His research interests include the Science of the Qur’an & Tafsir, Hadith Studies, and Islamic Studies.