Waqf crowdfunding platform launched for Muslims to contribute to causes

By Masyitha Baziad August 4, 2016

Platform formed launch by former Malaysian prime minister Abdullah
Anyone can make donations, looking for projects with social impact

Waqf crowdfunding platform launched for Muslims to contribute to causes

MALAYSIA’S former Prime Minister Abdullah Ahmad Badawi launched the world’s first global waqf crowdfunding platform, WaqfWorld, on the sidelines of the 12th World Islamic Economic Forum (WIEF) in Jakarta on Aug 3.

READ ALSO: MaGIC announces KL-hosted global entrepreneurial initiative … in Jakarta

Abdullah is the founding patron of WaqfWorld, an Islamic financing initiative by Singapore-based Ethis Pte Ltd and part of its EthisVentures.com family of Islamic crowdfunding platforms, including the EthisCrowd real estate crowdfunding platform launched in 2014.

According to Ethis, waqf is defined as ‘an endowment made by a Muslim to a religious, educational, social or charitable cause.’ It is a permanent and institutionalised act of donation. Once a waqf is created, the property cannot be donated, bequeathed or inherited, or sold.

A waqf crowdfunding platform was first proposed by the Research Centre for Islamic Economics and Finance (Ekonis) of Universiti Kebangsaan Malaysia (UKM) in a roundtable discussion organised by the Islamic Development Bank’s Research and Training Institute (IRTI) in Jeddah in January.

“We believe that the marriage between waqf and crowdfunding will be the new powerhouse in financing SMEs (small and medium enterprises) and social entrepreneurship across South-East Asia,” said Ekonis head Suhaili Alma’amun.

She said since the idea was mooted in January, Ekonis had been actively looking for a technology partner, and Ethis was the perfect match.

According to a paper on Waqf-based Microfinance: Realising the Social Role of Islamic Finance by IRTI’s Habib Ahmed, waqf simply means charitable donations to build mosques, schools or homes, especially for the needy.

While waqf traditionally covers real estate, ‘cash waqf’ is a financing method to develop waqf property or to support and build institutions like schools, health centres, and orphanages.

“What we are doing here is to make waqf easier for everyone, to make waqf accessible from your computer, smartphone, or tablet,” said WaqfWorld managing partner Adi Rahman (pic below).

“And we are also opening the gate for waqf to go global,” he added.

WaqfWorld will give the global Mutawallis (trustees of the waqf) and authorised charitable bodies greater access and wider support, according to Adi.

“The only requirement is that all projects need to be clear and transparent to our global crowd,” he said.

WaqfWorld will focus on microfinance, education, social enterprise, humanitarian relief, and religious projects.

The nitty-gritty

WaqfWorld said it is working with waqf partners from Indonesia, Malaysia, and Singapore. These partners are registered Islamic microfinance institutions that already have many projects in the pipeline.

The platform would allow these waqf partners to promote and receive donations for their projects, and also connect these projects to donors globally. Donations collected through WaqfWorld will go directly to the partners.

Donors need to register themselves with WaqfWorld, choose the projects or campaigns they are most interested in, and donate via PayPal, credit card, or bitcoins, or offline through bank transfers.

Donations or cash waqf start from US$50 at the ‘first level,’ up to the sixth level of US$10,000. WaqfWorld will charge a transaction fee, ranging from US$3 up to US$401.

After putting in their pledges, donors can track the progress and will receive impact reports of their donations.

Even though waqf is an Islamic tradition, WaqfWorld said is open to everyone as it believes that social impact goes beyond religious beliefs. However, the status of waqf itself will only be applicable to Muslims.

Projects with big impact

The platform currently has four social projects on board: One to provide modern motorboats to fisherman in the Malaysian state of Perak; another to train female Indonesian migrant workers; a third to finance broom craftsmen; and the last for livestock farming in West Java, Indonesia.

“Our partners will identify more projects to be featured on our platform in the next three to six months,” said Adi.

“We will actively put bigger and more impactful projects on the platform in the next half of the year, especially from Indonesia, Malaysia, and Singapore,” he added.

Adi said the amount of the crowdfunding collected through the platform would not be how it measures success; rather, its target would be to attract more projects with great social impact.

“We will screen every project proposal that comes in, and we will look for those with big social impact – these projects would be featured and hopefully promoted to get more donations,” he added.

Greater economy impact

The World Bank estimates that crowdfunding platforms would garner about US$90 billion by 2020. Although the numbers for waqf crowdfunding have not been tallied yet, some believe that there is great potential.

“If the waqf institutions are managed properly and are given the platform to promote themselves, it could become one of the most effective ways to collect funds from the private sector,” said Dr Mohamed Ghazali Md. Noor, council member of the International Centre for Waqf Research.

“Now in the digital era, where everything is made easy with technology, we need some kind of e-commerce or marketplace platform for waqf, where people can look for and choose which projects they want to donate to.

“The impact will be tremendous,” he added.

PBMT Social Ventures Ltd general manager Jamil Abbas concurred, saying a platform like WaqfWorld would allow waqf institutions around the world to aid more people in need.

PBMT Social Ventures is present in Indonesia and Singapore, where it has more than 550 local branches, and claims to have delivered aid in the form of funds and goods to more than 2.5 billion people.

“We currently have partnerships with five crowdsourcing platform, all non-exclusive, including WaqfWorld,” said Jamil.