Waqf Reimagined: Endowments Funding Schools and Clinics

In a quiet street in Kuala Lumpur, a small school charges no fees. Its electricity bill is paid, its teachers are salaried, its roof is maintained — not by a government grant or a philanthropic foundation, but by the income from a portfolio of rented shophouses whose deeds were signed over to the school more than forty years ago. The arrangement has a name that predates capitalism by several centuries: waqf.nnA waqf is a religious endowment — property or assets placed in permanent trust for a charitable purpose. The principal is never spent; only the income it generates flows toward the designated beneficiary. Mosques have been built on waqf land; libraries have been stocked from waqf incomes; soup kitchens have been run from the rents on waqf properties in cities from Cairo to Samarkand for a thousand years. At its height in the Ottoman period, perhaps a third of all cultivated land in Anatolia was held as waqf. The hospitals of medieval Baghdad were largely endowment-funded.nnThe institution fell on hard times in the nineteenth and twentieth centuries, when colonial governments in many Muslim-majority countries seized or nationalised waqf assets, and when newly independent states did the same. A system built on the security of permanent property rights survived poorly in eras of confiscation and land reform.nnNow, quietly, something is reviving. A new generation of Islamic finance practitioners and development economists has begun to look at the waqf not as a relic but as an instrument — one that could, if properly structured, channel patient capital toward the social goods that governments underfund and private markets do not find profitable.