The experience of Awqaf New Zealand in developing the jurisprudence and application of temporary cash Waqf—and its connection to the proceedings of the 12th Waqf Fiqh Issues Forum—the highest jurisprudential authority for Waqf rulings in the Islamic world.
A question frequently echoes through the corridors of Islamic finance institutions that has yet to receive a fully sufficient jurisprudential answer: What is the real difference between temporary cash Waqf and an interest-free good loan (Qard Hasan)? And why do we not simply settle for a Qard Hasan fund directly instead of a temporary cash Waqf fund designated for interest-free lending? The experience of Awqaf New Zealand over more than a decade provides the most lucid, practical answer to this question.
Founded in 2011 in Auckland, New Zealand, Awqaf New Zealand was established with a specific and precise goal: "To transform wasted charitable resources into sustainable sources of Waqf funding." Its initial focus addressed the immense waste within the ritual sacrifice (Udhiyah/Qurbani) projects of Muslims in the Western world, where massive quantities of livestock by-products were being discarded.
From the far reaches of the Southern Hemisphere, specifically from New Zealand, this compact institution proved that strict jurisprudential compliance and practical innovation do not conflict. Rather, they integrate seamlessly into a unique model that unites authenticity with renewal.
🏆 Winner of the Islamic Economy Award 2013 — Waqf CategoryAwqaf New Zealand did not build its model in a vacuum; rather, it relied on a rich legacy of international Islamic Fiqh academy resolutions and approved Shariah standards. Below are the most prominent:
Resolution No. 140 (15/6) explicitly affirmed that the endowment of cash (Waqf al-Nuqud) is legally permissible under Shariah, because the primary objective of Waqf—which is preserving the principal and distributing its benefit—is fulfilled through it, noting that money is not restricted by its physical form but by its equivalent value. It permitted cash Waqf for interest-free loans and investment.
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) dedicated Shariah Standard No. 33 to Waqf, defining it as "holding a property (ayn) from being disposed of, while dedicating its usufruct to charitable causes." The standard explicitly permitted both permanent and temporary Waqf, and sanctioned cash Waqf for investment or legitimate lending.
Resolution No. 181 (19/7) explicitly approved the principle of temporariness in Waqf, stating that if a Waqf is temporary, it must be managed according to the conditions stipulated by the donor, and that temporariness is permissible across all asset classes based on the donor's intent. This resolution serves as a major jurisprudential pillar for Awqaf New Zealand's model.
Standard No. 60 (Amended) provides the most detailed treatment of temporary Waqf, cash endowments, and investment funds. It explicitly affirms the permissibility of cash Waqf for Qard Hasan or investment, stipulating that the cash designated at the time of endowment constitutes the Waqf principal, and that fluctuations in purchasing power do not affect the mandated value of the endowed cash assets.
The default rule is that Waqf is permanent, yet it is legally permissible to make it temporary for a specific duration or restricted by a condition. Once the period ends or the condition is met, the endowed asset reverts to the original owner or their heirs.
In 2016, Awqaf New Zealand commissioned ISRA Shariah Advisory Services, an arm of the International Shariah Research Academy for Islamic Finance in Malaysia, to execute an exhaustive jurisprudential study to verify the validity of the Smart Waqf Fund model and its compliance with Shariah parameters.
ISRA submitted the study and the Smart Waqf Fund framework to its central Shariah Board. Praise be to Allah, the model was approved by 9 leading Islamic scholars specializing in Islamic finance globally, leaning on the jurisprudential principles of both permanent and temporary cash Waqf.
Following this milestone, Awqaf New Zealand executed five specialized consulting workshops with Waqf organs and Islamic financial entities across several regions:
Through these workshops and deep dialogues with Islamic finance executives and Waqf institutions across various Muslim countries and minority communities, a core communicative and jurisprudential challenge emerged: the difficulty of clearly conveying the fundamental differences between "temporary cash Waqf" and "Qard Hasan" to the general public. This precise challenge prompted Awqaf New Zealand to engage with the Shariah Committee of the Awqaf Public Foundation in Kuwait.
In 2018, a fundamental jurisprudential dilemma was discovered that profoundly impacts the drafting of Waqf financing contracts, highlighting the necessity of distinguishing between temporary cash Waqf and Qard Hasan when building Waqf-based financial products.
On the surface, both contracts appear identical: each involves providing capital for a specified period and subsequently returning its equivalent. This superficial resemblance led some to question the utility of separating them. However, the science of jurisprudential distinctions (ilm al-furuq) unveils a profound structural divergence:
| Point of Comparison | Temporary Cash Waqf | Interest-Free Loan (Qard Hasan) |
|---|---|---|
| Nature of Contract | A donation of usufruct while the principal remains intact | A transfer of ownership of capital with an obligation to return its equivalent |
| Ownership of the Asset | Remains with the founder (Waqif), and does not transfer to the borrower | Transfers fully to the borrower upon receipt |
| Financial Liability | The amount is not a debt tied to the personal liability of the manager or borrower | The amount is an obligatory debt resting on the borrower's liability |
| Yield and Profits | Distributed to beneficiaries according to the founder's stipulations | Any conditional excess is strictly prohibited usury (Riba) |
| Intent & Spiritual Impact | A continuous charity (Sadakah Jariyah) tied to the asset itself | Spiritual reward for lending without financial gain |
| Documentation & Guarantee | An independent Waqf deed, legally enforceable in court | A bilateral debt agreement between two parties |
| Impact of Death | The Waqf is not inherited; it continues serving the beneficiaries | The debt transfers to the heirs as an obligation or claim |
| Zakat Obligation | Zakat ruling varies depending on the allocation of the capital | Paid by the borrower if it meets conditions and a lunar year passes |
What these two contracts share superficially diverges completely in essence and legal outcome—and this meticulous Fiqh reconciliation serves as the "programmatic ruler" upon which the entire architecture of digital cash Waqf engineering depends.
Driven by the necessity to implement these distinct rules seamlessly, Awqaf New Zealand developed the "Smart Waqf Fund", an innovative financing model structured around four integrated financial components:
1. Permanent Cash Waqf Component: Funds endowed in perpetuity, which are invested, and their generated returns are distributed to beneficiaries. The principal is never returned.
2. Temporary Cash Waqf Component: Funds endowed for a fixed duration (e.g., 3 years), channeled to finance Waqf projects without interest. The donor reclaims their original principal at maturity. This is the heart of the operational innovation.
3. Waqf Takaful Shield Component: Provides an institutional safety net to manage risks across funded initiatives.
4. Institutional Capacity Capital (Irsad): Dedicated to empowering institutional capacities and developing specialized competencies.
Annually, approximately 50 million ritual sacrifices (Udhiyah) are slaughtered worldwide during Eid al-Adha. The economic value generated by this holiday season is estimated at $100 billion (according to AI platform metrics).
Despite this immense scale, substantial economic value is lost due to the absence of a sustainable Waqf framework that organizes livestock supply chains and industrializes its by-products. Here lies the strategic opportunity.
Awqaf New Zealand is actively engineering feasibility studies to establish pilot commercial sheep milking farms across New Zealand, Australia, and Indonesia. Capitalized with capacities ranging from 200 to 1,000 head per farm, they are architected around the lunar calendar cycles to ensure optimal optimization of livestock yields:
• Pre-Eid Phase: Commercial dairy, cheese, and wool production.
• Post-Eid Phase: Processing hides, wool, and bones for premium halal gelatin manufacture.
This framework is financed via temporary cash Waqf, awaiting the formalized resolutions of the 12th Waqf Fiqh Issues Forum to institutionalize the structural foundation of this breakthrough.
Artificial Intelligence plays an accelerating and central role in empowering Awqaf New Zealand to fulfill its socio-economic objectives across four operational pathways:
Large Language Models aid in processing intricate classical texts, drafting precise legal distinctions between financing instruments, and compiling resolutions from the IIFA and AAOIFI standards.
Generative AI tools are deployed to draft complex corporate communications and scholarly requests addressed to international academies, saving significant manual labor for the core team.
AI assists in translating validated Fiqh tenets into self-executing digital protocols (Smart Contracts) on distributed networks, guaranteeing asset autonomy and programmatic capital return.
AI platforms orchestrate communication across diverse diasporas in New Zealand, Australia, and Indonesia, translating and simplifying complex Waqf paradigms for the general public.
Awqaf New Zealand closely anticipates the convening of the 12th Waqf Fiqh Issues Forum by the Kuwait Awqaf Public Foundation, as it addresses two thematic topics that are critically vital to the Smart Waqf Fund framework:
The strategic convergence of temporary cash Waqf jurisprudence with digital-first asset engineering—which awaits the formal decrees of the 12th Forum—will materialize an unprecedented financial paradigm: The Digital Waqf Bank, a platform managing "rotating waqf liquidity" leveraging temporary cash contracts to protect principal assets while expanding social yield.
This institution is anchored upon three strategic pillars:
Pillar I — Calibrated Cash Waqf: A temporary cash Waqf mechanism built on unambiguous structural pillars, distinct from regular credit lines, waiting for the 12th Forum to formally establish its parameters.
Pillar II — Immutable Shariah Logging: Recording both permanent and temporary cash Waqf transactions, asset tracks, and dividend distributions through the Sha'eeraty Waqfi Application, delivering absolute transparency demanded by diaspora donors.
Pillar III — The Smart Waqf Ecosystem: Linking various Islamic rituals (Udhiyah, Umrah, Aqiqah) to Waqf funding via a smart application that converts cyclical religious spending into revolving cash pools, sustaining live production assets and returning yields programmatically.