The Legitimacy of Waqf Funds: Navigating the Use of Shariah Non-Compliant Tools #
Utilising Shariah non-compliant tools, such as conventional insurance plans, to amass funds for waqf may pose a conundrum. On one hand, the intention behind designating insurance proceeds to waqf is commendable, aiming to support charitable, educational, or religious causes. On the other hand, the means of accumulating these funds through non-compliant insurance contravene the principles of Shariah law.
In the context of Islamic finance principles, it is worth noting that “Shariah non-compliant tools” refer to financial mechanisms and practices that violate Shariah rules and requirements. These include, but are not limited to, interest-based transactions (riba), speculative trading (gharar), investments in industries that conflict with Islamic values, such as alcohol or gambling, and other transactions deemed impermissible within Islam. The income derived from such sources is considered “tainted,” implying that it originates from activities not aligned with Shariah principles.
From the Shariah perspective, Muslims are obliged to dispose of such tainted income and direct it towards public interest usage, as it cannot be utilised for personal consumption, gain, or for seeking worldly or religious accolades. This directive underscores the importance of ensuring the purity and legitimacy of one’s earnings and possessions. Assets acquired illicitly are thus invalid and have no bearing in Shariah.
The revered companion Abu Hurairah (may Allah be pleased with him) narrated that the Prophet Muhammad (ﷺ) said,
“Allah is Toyyib (good) and only accepts that which is good” (Sahih Muslim, hadith no. 1015).
Furthermore, Ibn Umar (may Allah be pleased with him) narrated that
“neither is a prayer valid without purification nor is charity accepted from unfaithful gains” (Sahih Muslim, hadith no. 224).
These narrations emphasise the imperative for Muslims to earn and utilise wealth derived from pure, lawful sources and highlight the impermissibility of employing illicitly acquired wealth for waqf.
As for the topic of inheritance, accepting or inheriting tainted income is unlawful in Islam. The responsibility lies with the original owner to ensure the purification of such funds before they are distributed to heirs. If heirs are uncertain about the legitimacy of the inherited wealth, they are obliged to purify any suspicious portion of it, as articulated by Imam Nawawi:
“Anyone who inherits property and does not know the source of the property for the deceased, whether it is from a lawful or unlawful source, and there is no sign or indication regarding it, then the property is lawful to be inherited according to the consensus of the scholars. And if they (the heir) find out that there is an illegal part of the property and are suspicious of the amount, then it is necessary for the heir to remove the illegitimate portion based on their own ijtihad.” (Al-Majmu’ Syarh al-Muhazzab; 9/428).
This position is reiterated by Dar al-Ifta’ Jordan and Imam al-Ghazali in his esteemed work, Ihya’ ‘Ulum al-Din, which highlighted that Islam does not permit the inheritance or utilisation of illicit assets.
In summary, employing Shariah non-compliant tools for the accumulation of waqf funds fundamentally compromises the legitimacy of the waqf. In circumstances where income is ambiguous or tainted, it is imperative to purify these funds by dispassion it towards charitable endeavours or for the public interest.
May Allah guide us all to the righteous path.
