Funding Educational Waqf Endowments

Can zakat be used to support endowments for Islamic education?

By Jasser Auda

January/February 2022

One commonly asked question is who is eligible to receive zakat? Among the many options available there is waqf (endowments), where the return on investment goes to an Islamic education program or college. In other words, can the zakat fund become a waqf fund?

Quran 9:60 (trans. Muhammad Asad) states: “The offerings given for the sake of God are [meant] only for the poor and the needy, and those who are in charge thereof, and those whose hearts are to be won over, and for the freeing of human beings from bondage, and [for] those who are overburdened with debts, and [for every struggle] in God’s cause, and [for] the wayfarer: [this is] an ordinance from God — and God is all-knowing, wise.”

Thus, spending zakat funds on buildings, books, teachers, students, computers and related expenses also comes under the category of legitimate zakat receivers, specifically under the category of “In God’s cause.” There is no significant difference of opinion about this among contemporary scholars, even if the students receiving the scholarship or the books aren’t poor or if the teachers who receive compensation or computers aren’t needy. It is a condition, however, that the college receiving it be trustworthy and have a mission of advancing true Islamic education and knowledge.

On the other hand, setting up an endowment is a highly rewarded charitable act, and especially important when it comes to supporting Islamic education. Abu Hurayra narrated that the Prophet (salla Allahu ‘alayhi wa sallam) said, “When a man dies, his good deeds come to an end except three: ongoing charity, beneficial knowledge, and righteous offspring who will pray for him” (Muslim).

Commenting on this hadith, Imam An-Nawawi said, “The scholars said, the meaning of this hadith is that the deeds of the deceased come to an end as soon as he or she dies, and the renewal of reward ceases for him or her, except in these three cases because he or she is the cause of them: his or her offspring is counted among his or her earnings; the knowledge that he or she leaves behind through teaching or writing; ongoing charity, i.e., a waqf (Islamic endowment).”

In my view, establishing such endowments is required (wajib) because these are the only means we have to protect another wajib (obligation), namely, academic freedom.

Such an endowment supports the academic activities of an Islamic education institute, and its board of directors (or equivalent body) will make sincere and independent decisions on how to spend its return on this type of education.

Without such an endowment, with support coming only from individuals, organizations or governments, the recipients will normally be subject to stated or unstated conditions and constraints, meaning to the donors’ interests. We see this today in many Islamic institutions, especially in Muslim-majority countries where many historically renowned Islamic institutes no longer enjoy academic freedom and scholarly integrity due to sponsor-imposed conditions and government pressure, even to extent of issuing certain fatwas.

But if the funds go to a truly independent endowment and the boards’ decision is also independent, then the educational process can be sincere only to God, Islam and the umma’s best interests. As only endowments can guarantee such freedom, donating to one that funds Islamic education becomes obligatory (wajib) or, more accurately, a collective obligation (wajib kifaya). In other words, several believers must fulfil this obligation or else all believers will be called to account.

But can a zakat fund be transformed into an investment or a waqf fund? Why not? The Shariasays nothing about giving one’s zakat to an endowment that achieves the same objectives and intents (maqasid) of the zakat and benefits the same category of recipients in the best way. However, several objections must be addressed here.

First, zakat must be given to the receivers themselves so they can own it immediately (tamalluk fawri). This rules out its being received by an organization or an investment firm. Several notable contemporary scholars, among them Sheikhs Wahba al-Zuhayli, Abdullah Alwan, Mohammad Taqi Uthmani and others agree with this ruling. However, Sheikhs Yusuf al-Qaradawi, Mustafa al-Zarqa, Abdul-Fattah Abu-Ghuddah, Abdul-Aziz al-Khayyat, Abdussalam al-Abbadi, Mohammad Faruq Nabhan and many other notable contemporary scholars oppose it (Islamic Fiqh Academy, Third Council, Amman, October 1986).  After much debate, the council finally issued an official decision allowing it.

That fatwa contained two conditions: (1) The urgent needs of the poor and the needy must not be compromised and (2) precautions must be taken so that the zakat funds are not lost in the investment process. The first condition only applies only to awqaf and investments for the poor and the needy — the fi sabil Allah category, not the al-fuqara’ wal-masakin category.

On the other hand, the second condition could be achieved when zakat funds are given to educational awqaf institutions with proper planning, investing, accounting and auditing.

Similarly, a waqf’s managers are the delegates (wukala’) of the community, which is the ultimate receiver of these funds in any case. 

Another related question addresses the maqasid (intents) of the above transactions: If the purpose of investing zakat funds is to achieve the funds’ growth and sustainability, then these purposes are achieved in an even better way with a waqf investment — far better than a charitable organization purchasing a small business or an investment property.

If these two conditions are met, then zakat funds can be received, invested and then spent on the same causes and categories for which they were given.

Another objection to investing zakat funds in an endowment is the ruling of many scholars that one of the conditions (shurut) for an endowment is that a specific donor (waqif) must actually own the donated property or fund and then transfer its ownership to a waqf. However, the zakat’s donor doesn’t actually own the fund, nor does the recipient organization – at least so goes the objection. That is why several scholars who allowed zakat to be invested, among them Sheikh Yusuf Qaradawi, excluded waqf from such investments.

With all due respect to the scholars, I see the question here as: Is the donated property or fund’s pre-ownership a definite condition (shart), or do we have precedents of endowments that were not owned by a specific waqif (donor)? The answer is “Yes, we do.” For example, ‘Umar ibn al-Khattab and ‘Uthman ibn ‘Affan (‘alayhum rahmat) transformed some of the “conquered land” into “endowed land” (waqf, habs) by governmental authority and without owning such land themselves. That is why scholars have always considered the Palestinian land endowed by ‘Umar to be awqaf that cannot be sold or changed.

However, jurists differ about whether waqf al-imam (an endowment initiated by a ruler) or waqf al-irsaad (a trust initiated by a governor) is a legitimate waqf. They debated whether an analogy (qiyas) with ‘Umar and ‘Uthman decisions is a correct one. Some jurists ruled that an irsad is not a proper waqf because the governor doesn’t actually own the trust before designating it, while others say that a governor is a legitimate delegate (wakil) for the umma, which is the ultimate owner of the public funds and therefore has the authority to initiate a waqf. I find the latter opinion to be more correct as, along with them, I consider it to be closer to the public interest (maslaha).

Similarly, a waqf’s directors are the delegates (wukala’) of the community, which is the ultimate receiver of these funds in any case. Therefore, they have the authority to initiate awqaf from the zakat funds they manage for the recipients’ best interests.

Zakat can be used to support a trustworthy Islamic education institute and given to a waqf endowment that supports such an institute. Setting up an endowment for Islamic education is a collective obligation (wajib kifa’i) to ensure academic integrity and freedom. However, the following conditions apply: (1) No conditions shall be attached that compromise the integrity and freedom of Islamic education and research; (2) precautions shall be taken to invest the funds efficiently ensure the accuracy of all related planning, accounting and auditing; (3) donors shall be informed of the waqf investment of their zakat and that its managing authority is delegated to act on behalf of the zakat recipients and in their best interest.

(NOTE: * This fatwa is the author’s opinion and does not necessarily represent the opinion of institutions or fatwa academies of which he is a member.)

Jasser Auda is president of Maqasid Institute,