Updated: May 23, 2023
The concept of Waqf indeed predates the development of the English Trust system. Waqf has its roots in Islamic traditions and has been practiced for centuries within Muslim communities. It was established during the time of Prophet Muhammad (Sallallahu Alayhi Wasallam) and has since played a significant role in Islamic societies. The English Trust, on the other hand, emerged in medieval England and developed as a legal mechanism for holding and managing property or assets for specific purposes. It was introduced to the Crusaders during their interactions with the Islamic world, where they encountered the Waqf system. Some historians suggest that the Crusaders may have been influenced by the Waqf concept and introduced elements into the English legal system, leading to the establishment of the English Trust. While the English Trust system has become well-known and widespread globally, it is important to note that it operates within a different legal framework and cultural context than Waqf. The English Trust system is based on common law principles, while Waqf operates within Islamic legal principles derived from the Quran, hadith (prophetic traditions), and scholarly interpretations.
The popularity and perceived power of the English Trust system can be attributed to various factors, including the historical dominance of Western legal systems and the influence of English common law in many parts of the world. Additionally, the colonial era and globalization have played a role in spreading the English Trust system across different jurisdictions.
While the English Trust system has strengths and advantages, Waqf remains a significant institution within Muslim-majority countries and communities. Waqf has a deep-rooted historical and religious significance in Islam, and many Waqf institutions have existed for centuries, providing support for various charitable, educational, and social causes.
It is important to recognize that different legal systems and cultural contexts have shaped the development and popularity of these concepts, and they continue to coexist, each serving their respective communities and contexts.
We will discuss several things, including differences and similarities regarding Waqf, Endowment, and the Trust concept under Islamic traditions and the English legal system.
It is established that the creation of awqaf for the benefit of one’s relatives and descendants was an original innovation by Islam, as affirmed by the Encyclopaedia Americana (Encyclopedia Americana, vol. 11, 646, as in Kahf, 1, 18). Originally, the concept of waqf was an Islamic institution (Khalfoune, 2005). Historians have ascertained that the Europeans borrowed the Islamic Waqf principles, particularly the English, during the Crusades when they “visited” the Middle East and became acquainted with Islamic culture. An excellent example is Merton College of Oxford University, established in 1264 (Gaudiosi, 1988). It is generally accepted that Merton College represents a threshold in the evolution of European universities. The Merton Foundation became a respected model in England and was emulated by the founding of Peterhouse, Cambridge University. Prof Gaudiosi has argued that the endowment deed of Merton College was in such conformity with the Islamic waqf law that it would have been approved in the Islamic world by any learned judge. In the USA also, the top universities are either structured as waqfs (trusts) or they all have their own university endowments. According to Prof Murat Çizakça, Ivy League universities in the USA were established based on the principle of waqf. We just listed world-renowned top educational institutes, but there are uncountable hospitals, community centers, orphanages, old age care centers, and many charitable religious and non-religious organizations that have been built worldwide Following are the educational institutes and organizations inspired by the Islamic Endowment (Waqf) concept.
Merton College, Oxford University, United Kingdom, was established in 1264. (See REF)
Harvard University, United States, was established in 1636 (See, REF)
Cambridge University Peterhouse College, United Kingdom, was established in 1209 (See, REF)
Yale University, United States, was established in 1701 (See, REF)
There are eight differences you should note between English Trust and Waqf (Fahad Mohammed Alabdulmenem. 2017).
The origin of Charitable Trusts can be traced in the United Kingdom while historical documents trace the origin of Waqfs to Medina, Saudi Arabia.
The formal recognition of Charitable Trusts may be traced to the English Common Law in the 12th to 13th Century England whereas Waqfs have been traced by Islamic jurisprudence documents to exist since as early as 610 C. E. It is believed that the establishment of trusts in England was patterned after the Waqfs in Middle Eastern states when the British interacted with Islamic leaders, learned about the Waqf system and adopted it in the English Common Law.
Charitable Trusts are initiated by common individuals who are not bound by any obligation to initiate such trusts which are irrevocable, meaning the property or asset that was the object of the trust cannot be taken back by the settlor. Waqfs, on the other hand, are likewise irrevocable but are initiated only by those who adhere to Islamic faith and are based on Islamic teachings, particularly passages found in hadiths. There are no restrictions, however, as to whether the Waqfs will benefit Muslims or non-Muslims.
The Charity Commission, the regulatory body of Charities and Charitable Trusts in the UK, governs Charitable Trusts. Ministries that are part of Islamic states' governance system, on the other hand, govern Waqfs. For instance, the Ministry of Waqf, Islamic Affairs, and Holy Places serves as the administrator of Waqfs in Jordan; the General Authority of Islamic Affairs and Endowments serves as the regulatory body of Waqfs in the United Arab Emirates; the State Islamic Religious Councils (SIRCs) and the Department for Zakat, Waqf, and Hajj manages Waqfs in Malaysia; while the Turkish Republic Prime Ministry Directorate General of Foundations governs the Turkish varies.
While Charitable Trusts have five components, namely: (1) Settlor, (2) Trustee, (3) Beneficiary (4) Trust Deed (5) Property, Asset or Endowment; Waqfs only have four components: (1) Contributor who must be a Muslim, (2) Endowment, (3) Beneficiary and (4) Waqf Deed.
Charitable Trusts are exclusively for the benefit of the public and specialized groups in society, never for the benefit of its settlor and his family, out of one's voluntary and genuine intention of helping others. Waqfs, on the contrary, are initiated to express a Muslim's sincere love for Allah (Subhanahu wa ta aala) through giving up his or her assets for the benefit of others outside of himself or herself. Waqfs, though, unlike Charitable Trusts, may benefit the contributor's family and descendants.
The purpose of Charitable Trusts is to provide relief to special groups in society with unmet needs out of one's sincere intention to help. Waqfs, meanwhile, are established with love for Allah at the core of the contributor's intentions but also for the benefit of groups that are in need. A special provision of Waqfs, however, is that it can benefit one's family and descendants.
The founders of trusts are individuals who have donated considerable sums for the establishment of their foundation. Most trusts are established by founders to achieve specific charitable objectives. Thus, the founders' aspirations, vision, and mission play a critical role in chalking out the roadmap for the functions of the given trust. In comparison, there is limited parallel with a Waqf founded by any individual Waqf for serving similar charitable purposes by a single founder. Instead, most Waqf comprises several donations raised by Muslim charity organizations rather than being set up separately with their well-determined aims. This variance between the nature of Waqf and trust founders impacts the sustainability and successful functioning of Waqf vis-a-vis trusts.
Clarity in the aims and objectives of the charity is crucial. Trusts are set up with clear targets and ambitions of their founders. However, this is not the case with the current Waqf, as the Waqf in several instances, donates solely in response to the appeal of different charity organizations and not by their ambitions and initiatives.
The management of trusts is by appointed trustees. In comparison, Waqf in the UK is managed by Muslim charity organizations as a collective pool of different donors. Due to this, unlike with trusts, the independent nature of various Waqf is not maintained. In contrast to the performance of the various trusts, the performance of most Waqf in the country is subject to the fulfillment of the charity organization, which manages not only Waqf but also a myriad of various other donations as well. It can result in the incongruity between mechanisms for Waqf management and overall performance within the context of the charity.
One of the essential factors for successful trusts is that they assign greater significance to investment. An expert, prudent, active internal and external fund management team is central to successful trusts. Most trusts grow capital and maximize revenue through sensible risk mitigation. To this end, the trend in trusts' investments is a higher concentration in equities. For them, a long-term investment strategy is suited to the short-term volatility of capital markets, but long-term return and investment in assets comprise of 50 percent or more of most trusts' portfolios. In comparison, being regarded as too uncertain, Waqf avoids exposure to equities. Most of the given trusts apply their ethical investment policies, which neither affect their financial performance nor hinder the fulfillment of their missions.
Most of the trusts employ a reserve policy to safeguard them against occasions of poor return. Also, in general, charitable disbursement by the given trusts is subject to the performance of their respective investment portfolio each year, which plays an essential role in sustainability.
Unlike Trust, the Waqf is virtually mandatory to incorporate a charity in action to attain validity. It stated in the deed that underprivileged members of his family should be considered for support and benefit from the trust. It is always mandatory to stipulate its objectives in charitable purposes, in case the number of members benefiting from the trust falls short of twenty, the unfilled positions would be occupied by other most eligible individuals as ultimate beneficiaries. In the classical Waqf for education, it was mutual to find stipulations demanding the beneficiaries to keep consistency in clothing and conduct. Waqf can permit the Mutawalli to apply his or her discretion regarding counting new receivers or excluding existing ones for not fulfilling certain conditions of the deed. The Mutawalli could be detached for being inattentive, incompetent, or for not discharging his allotted duties.
Experts constantly claim the current commonalities between the two institutions on the theoretical and organizational levels. The technical framework of trust is obviously more amenable to the framework of Waqf than any other similar foreign legal device.
Waqf is by default perpetual in its nature, while for a trust, the character of perpetuity is developed only by specifying it in the deed. In other words, a trust is initially time-bound; there is no need for a separate stipulation for a Waqf to become perpetual. When a trust is contrasted with Waqf, the option of cancellation in the former distinguishes it from the latter; as the latter (Waqf) cannot be revoked.
Regarding the potential subject matters, there is a minute but important difference between the two institutions. Whereas the scope of trusts is open to cover almost all valuables/assets as the subject matter of a trust, for a Waqf, the valuables/assets must fulfill the criteria of Shariah compliance. An item that challenges the essential principles of Shari’ah, such as alcohol-related paraphernalia or gambling merchandise, would fall short of the qualifying criteria for Waqf. For a trust, there are no such limitations on similar items.
There are many similarities you should note between English Trust and Waqf (Fahad Mohammed Alabdulmenem. 2017).
Depending on the revenues they generate, Charitable Trusts are granted by the British government whole or partial exemption from income tax, corporation tax, capital gains tax, inheritance tax, stamp duty, and council tax. Waqfs, meanwhile, are also exempted from income tax under Islamic law, if the trust is purely for charitable purposes. Should be part of the trust, it will provide the financial benefit to the mutual (the manager of the trust) only that portion will be subject to taxation, while the portion used for charitable purposes will not be taxable.
The charitable purposes identified by the Charity Commission are similar to Islamic teachings and compliance of these charitable drives with Shari’ah guidelines and are critically crucial for Waqf. Additionally, like the requirements of Waqf, trusts were also continuous in nature, and the ownership of the same was supposed to be vested in Christ. In fact, this assertion further consolidates the conceptual likeness of trusts with Waqf.
A Charitable Trust can be set up by bestowing land, buildings, cash, and other investments. Waqf and trusts both equally involve fiduciary obligations for their Mutawalli and trustees. In simple terms, the trustees of both Waqf and trusts owe the fiduciary responsibility to their prospective beneficiaries. The trustee of a trust would have different responsibilities regarding a permanent and non-permanent trust. In this context, it is mandatory that the respective trustees and trusts to act carefully and take initiatives that are fit for the given trust and which are in the best interest of the beneficiaries. Similarly, endeavoring to satisfy the given purposes of Waqf or trust constitutes one of the fundamental responsibilities of the managers. Thus, there are significant similarities between the two concerning their management practices.
Paper - Comparing the effectiveness of Waqf and English Charitable Trust by Islamic Relief Academy.
Paper - Influence of the Islamic Law of WAQF on the Development of the Trust in England by Monica M. Gaudiosi
Paper - The Islamic Trust Waqf: a Stagnant or Reviving Legal Institution? by Haitam Suleiman
Paper - Waqf and Reforming the higher education by Murat Cizakca
Book - Challenges and Impacts of Religious Endowments on Global Economics and Finance edited by Saiti, Buerhan, Sarea, Adel
Book - Maximizing Social Impact Through Waqf Solutions By Hussein Elasrag
Fahad Mohammed Alabdulmenem. 2017. Journal of Law, Policy and Globalization www.iiste.org ISSN 2224-3240 (Paper) ISSN 2224-3259 (Online) Vol.61, 2017
Gaudiosi, M. M. (1988). The influence of the Islamic law of Waqf on the development of the trust in England: The case of Merton College. University of Pennsylvania Law Review, 136(4), 1231. https://doi.org/10.2307/3312162
Khalfoune, T. (2005). Le Habous, le domaine public et le trust. Revue internationale de droit compare, 57(2), 441–470. https://doi. org/10.3406/ridc.2005.19355