Proposal Framework of Waqf Institutions' Governance and Its Economic and Social Implications

In the name of Allah, the Most Compassionate, the Merciful. This paper seeks to accomplish several goals. First, it addresses in brief the Waqf as an effective Islamic financing institution to reduce poverty and improving human wellbeing. Second, it explains Waqf linguistically and terminology types of Waqf and their practicing throughout history: Third it proposes a framework of Waqf Governance. It contains a structure of several levels; Tawhid, the basic principles of good governance, shared vision and mission, strategy formation, strategy implementation and control, the level of monitoring, Shari'ah auditing, Shura Boardand the investment monitoring unit. It points out to the social and economic impacts of good governing. Social Then and economic implications of good governing make a crucial factor in the development of Waqf. Finally, this paper proposes a structure and function for Waqf funds investment called Waqf Investment Institutions (WIIs) that are setup, mainly as organizations of Waqf fund planners and managers. Each WII operates one or more funds. Each WII shall be obliged to invest fraction of its portfolio in its locality to assure regional growth and development. WII may issue Waqf shares, Istibdal (Substitution of Waqf Prosperities), lease with dual payment, Huker (long lease with large advanced lump sum, and Al Mursad (loan). This loan is offered to the Waqf management by a lender to develop a Waqf. This requires organizing WII in a corporate fashion. Current regulations on investment may need some adjustments to cater for such businesses. WIIs will be joined in a national association that promotes them in the market and help regulating such business.