Trust Fund: A Product Combining Waqf, Zakah and Ṣadaqah for Socio-Economic Agenda

Abstract

This paper introduces waqf, zakāh and ṣadaqah, which are currently being mobilized by the non-Financial Institutions (non-FIs) such as charitable organizations and Non-Governmental Organizations (NGOs) as additional components of Islamic finance industry, to complement the efforts of financial intermediaries as contributor to key socio-economic development.The paper presents various aspects of a case study of the use of Trust Fund Instrument by the Islamic Development Bank (IDB) for socio-economic development in its member countries including a project run with the cooperation of Bill & Melinda Gates Foundation (Gates Foundation) for polio eradication in Pakistan as part of the Global Polio Eradication Initiative (GPEI).Towards the end of the paper, some recommendations are presented to push the activities of non-FIs in promoting waqf, zakāh and ṣadaqah via trust funds into the mainstream economy in a more coordinated, integrated and efficient manner at national and international levels.