Maliah Noor & Mohd Rosdi, Mohd Syakir (2016). Today,

Sulaiman, Mohd Akhyar Adnan and Putri Nor Suad Megat Mohd Nor (2009)
historically mentioned in their article on IEF that during its establishment,
Malaysian government supported a huge amount of fund amounted RM 3.5 million.
Again, they were mentioning where during that time the use of word “Endowment”
decided by the Majlis instead of waqf
in its name is just to replace the supervision under the regulation of State of
Selangor to IIUM itself. More accurately, it was to make IEF itself to manage
its fund rather than the state government. Then, it creates independency for
certain aspects those are not quite related directly to waqf regulation under the state. However, the rest of their studies
were focusing on the accounting practiced and disclosure on accounting notes
and reports by IEF such as between 2003 and 2005 with some other information
such as IEF’s development as well as management through brief explanation.



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3.1 Introduction

3.1.1 Story of IIUM and IEF

was established in 7th May 1983 to bring out the idea of Malaysian 4th
Prime Minister Dr. Mahathir Mohammad. This idea actually came from the result
of discussion between The Organisation of Islamic Cooperation (OIC) members.
Then, Malaysia took the responsibility to realize that idea for the purpose of
Muslim development in term of knowledge. Along with that was the introduction
of the first Islamic bank in Malaysia, Bank Islam Malaysia Berhad. All those
thing were in line to Dr. Mahathir and the government policies which was Dasar
Penerapan Nilai-Nilai Islam at that time as said by Husna Mohd Shafie, Noor
& Mohd Rosdi, Mohd Syakir (2016).

            Today, IIUM has several campuses
around Peninsular Malaysia where the main campus is located at Gombak,
Selangor. Other than that are in Kuantan, Pahang which to place science
students such as medical and marine courses. In addition, there are new
campuses are developed at Gambang, Pahang and Pagoh, Johor. All these campuses
approximately able to place and enroll more than 3000 new students every year
from Malaysia as well as international students around the world where most of
them are Muslims.

The history of IIUM Endowment Fund (IEF) can be
traced back to its establishment during the year of 1999 after around 7 years
of IIUM existence. IEF was founded by Prof. Datuk Dr. Abdul Hamid Abu Sulaiman
which was the second
university rector.  At that time, he
observed that there were many students who came to study at the IIUM faced a
serious financial problem. At that time, most of these needy students were
foreign students. As mentioned in the previous chapter, again the main purpose
of IEF until now is the help the needy IIUM students while they are studying in
IIUM especially who are good in their studies both Malaysians and foreigners.
Currently, more local students or Malaysians are the recipient than
international students.

3.1.2 The Needy in IIUM

problems faced by them are usually the fee of tuition and accommodation
including the worst case which is food. Today, after facing the budget cut, the
problems of IIUM students are extended into several kinds. For instance, the
budget of Final Year Project for engineering students is cut which forced the
students to find the fund themselves or to use or reuse the available sources
in the laboratory. Another cases such as community services department where
the students or volunteer doing social responsibility (SR) activities now
cannot support the activities which resulted less SR projects are made year by
year. This may affect students from the perspective of volunteerism and soft
skill other than academic. However, the main focus of IEF still emphasizing in
helping individual student’s overdue fee and daily life cost.

Table 3.1: Categories of
IIUM Students Which Need a Help:

Type of Students’ Need


Overdue fee of graduated students

Students who finished their study, but not yet
received the scroll/degree due to overdue fee.

Overdue fee of active students

Students who are not finished their study yet  and they have overdue fees

Poor students who need help for
living expenses

Students who are not finished their study yet  and facing financing problems for necessity


Source: Persatuan Pengimport dan Perniaga
Kenderaan Melayu Malaysia


            Furthermore, through its zakat unit,
IEF contributes yearly zakat and in 2016 it was amounting RM 280 000 as stated
in IEF annual report as Bantuan Hari Raya. The recipients of the zakat usually
are the IIUM staff such as cleaners and those who are capable to receive it in
accordance to Islam. The amount given to each is ranged between RM 200.00 up to
RM 500.00 accordingly.  The source of the
zakat is coming from IIUM Holdings and its subsidiaries.

3.2 Framework and Operation of Waqf Related Project by IEF

to the data extracted from IEF Annual Report 2016, it cannot be denied that
there was a small part of waqf concept
took place. From the IEF collection in 2016, there was only 5% collection (clear
figure) done through waqf concept by
IIUM Waqf Knowledge which amounting RM 509 951.00 compared to the total of RM
10 628 379.89. Furthermore, there is another waqf concepts applied such as IEF
perpetual properties program, but the figure is not yet properly stated as waqf
for some reason that will be discussed later in this study.

            However, this IIUM Waqf knowledge alone
was the third largest contribution in term of IEF self-initiation after Cash
and Properties Investment Income as well as general contribution. The majority
of collection by IEF were mostly came from the outside contributors/donors and
again mostly from zakat such as LZS and corporate zakat. Below is the table of
separation between IEF initiation program and outside contribution:



Table 3.2: Separation of
IEF Collections between Self-Initiation Program and Contribution from Outside

IEF Self-Initiation

Contribution from








RM 1 765 570.58


Zakat Selangor (LZS)

RM 4 924 999.18


*Cash and Properties
Investment Income

2 104 967.21



RM 1 160 079.69


IIUM Waqf Knowledge

509 951.00





1 Campaign

RM 97 376.00






RM 56 061.00





Activities and Other Income

RM 7 375.03






4 541 300.82



6 085 078.87



*from the interview
conducted, about half the contribution from cash and properties investment income
is came from waqf concept applied in
perpetual properties program

IEF Annual Report 2016

            By referring the above table, it is
clear than the contribution from outside was higher than the collection
initiated by IEF in 2016. In addition, the contribution related to waqf can be seen as a small number of 5%
only. However, this amount of RM 509 951.00 cannot be denied was a huge amount
and still significant. Moreover, IIUM Waqf
Knowledge was higher as compared to other kind of IEF initiation such as RM 1
Campaign, Kafalah, business activities and other where those four shared less
than 3%.  The most important part from
the above table is that, there are waqf
base project that cannot be identified directly. There is waqf perpetual program where IEF colloects the revenue from rental
gain from waqf assets. Cash and
properties investment income do include waqf
based program, but some information of the separation amount out of 20% or RM 2
104 967.21 are classified.

            After some discussion between the
author and the staff of IEF, the most important finding should be emphasized in
this study is that, there are actually a lot of project based on waqf other than what was stated in the
Annual Report 2016. However, IEF intentionally do not put the word waqf for some reason and the example of
that can be seen clearly through the three waqf
building which are the Azman Hashim Complex, and the other two hostel buildings
under the program called IIUM Perpetual Endowment Property Fund.

            Other than IEF, there were a lot of waqf program done by IIUM, but it was
not initiated by IEF itself. For instance, Office of Sultan Haji Ahmad Shah
Mosque, IIUM or SHAS did a waqf
program namely “Books Waqf Project – Spreading Knowledge Through Waqf”. The
modus operandi of this program was just encourage people to buy a package of
book where to payment collected was channeled to Madrasah or religious schools.
Another example, in 2015 through the class of Waqf Management under Kulliyyah
of Economics and Management Sciences, IIUM or KENMS had a visit program to old
folks’ home at Kajang, Selangor where six hospitals bed were given as waqf. Students and the lecturers were
voluntarily collecting as much donation to buy the hospital bed amounting
approximately RM 1 600.00/bed.

            As discussed before, IEF is not
specific institution that only scoping it operation into waqf. There are many things like zakat, campaign, cash and
properties investment take place. Also, it is not an institution that capable
enough to have a waqf through huge
properties or able to handle hundred million of waqf securities like some do. However, the establishment of IEF
itself was coming from the spirit of Al Azhar University Waqf and endowment
fund units from several department of universities in United Kingdom (UK) and
United States (US). Furthermore, there is a rule specific for IEF which is IIUM
Waqf Rules 1999 that govern IEF framework and operation until today.

3.2.1 IIUM Waqf Knowledge

IIUM Waqf Knowledge is also known as Waqf ‘Ilm in
Arabic. This program is initiated by IEF itself and according to it the program
is strictly follows the rule of waqf.
This project will aim RM 1
billion trust fund in the far future. As mentioned in IEF Annual Report in
2016, 145 of IIUM staff are joining this project during its launch. From the
total source of collection which was around RM 10 million in 2016, 5% of
sources or RM 509 951.00 was generated from waqf
knowledge project. This is a new project that was launched in October 2016 by
the IIUM current Rector, Prof. Dato’ Sri Dr. Zaleha Bt. Kamarudin. Below are
the details of the waqf knowledge
project contribution:

Table 3.3: IIUM Staff
Contribution for IIUM Waqf Knowledge

Category /Description

of Staff


Confirmed amount


RM 175 907.00

Contribution until further notice /retirement


RM 1 834.00 per month


Annual Report 2016 IIUM Endowment Fund

This project shares same similar aim which to
wider the source of fund where at the end of the day to be contributed among
the needy especially in IIUM. The concept used in this IIUM Waqf Knowledge is
same as the concept of cash waqf. In
the annual report mentioned that the collection under this project will be
pooled and then to be invested in Sharia compliant investment. Thus, it must be
strictly managed and monitored to ensure the portfolio chosen must highly
likely gives profit to IEF. The yield then is used to help the needy later on.

3.1: Modus Operandi of IIUM Waqf Knowledge

            Source: Annual Report 2016 IIUM Endowment


            As mentioned in the literature
review, there are several pillars of waqf
to be accepted in Islam. One of them is the parties involved in the waqf transaction commonly are a donor
and recipient. The donor or the giver of waqf subject matter is named as waqif in Arabic. The waqif in this IIUM Waqf Knowledge
project is the staff of IIUM itself. As reported in the annual report, about 97
IIUM staff already confirmed had donated through this project which was
amounting RM RM 175 907.00 in 2016. Whilst, there were 48 IIUM staff continuously
contribute to the project which is amounting RM 1 834.00 per month total
collection from all of them. This continues monthly donation/waqf will be continued until they are
retired of when the IEF receiving termination notice by them.

            The waqif has several methods on how to donate into IIUM Waqf
Knowledge. The classic way to do it is easily by paying with cash or by cheque.
This kind of way the waqif must
directly go and meet the officer of IEF or at the IEF counter in IIUM Gombak
campus. However, this way is hardly to achieve significant amount of cash
considering on how to attract IIUM staff of even students and public to joint.

            Along with technological advances in
financial sector of commonly named as “fintech”,
online payment for sure is one of people favorite ways of paying something.
IEF also open to all to join this project through online payment. The waqif just needs to surf into IEF
website (IIUM portal) and select the payment method where the online payment
button is there to be clicked. IEF account number is through IIUM account where
there are only two accounts provided which both are under Bank Muamalat
Malaysia Berhad (BMMB). The first account is strictly for student transaction
between student and IIUM such as for fees payment receiving allowance from
IIUM. The second account is named as operating account where by the name itself
it is clear that any transaction regarding IIUM operation must through this
account only, but for IIUM this account is meant for operating and others.
Therefore, the online payment of IEF transaction and IIUM Waqf Knowledge can be
done through IIUM operating account either for online payment or by cheque even
by cash deposit.

            Another kind of payment by the waqif also can be done by using standing
instruction of the waqif’s bank. The
waqif by this way usually gives the instruction to the bank to donate some
amount of money to IEF by mentioning the details of IIUM Waqf Knowledge.
However, this might incur a cost to the waqif
i.e. charged by the bank. Again this method as well as by cash and cheque are
not the popular way among staff, students and public.

            Since the staff of IIUM is the
majority of the waqif, the most
popular way to donate is by monthly salary deduction. This will be cost
efficient to the staff and saves time as well. The waqif just needs to subscribe the project with simple documentation
to be submitted whereas IEF and IIUM Financial department will manage the rest
of the process. This method usually requires the waqif to donate continuously per month as agreed in the term and
condition provided. The termination by the waqif
only can be made in two ways either by the waqif
before retirement or automatically because of the retirement. In addition, the
IIUM administration staff are using Employees Provident Fund (EPF) or Kumpulan
Wang Simpanan Pekerja (KWSP) as their retirement scheme where they collect
during their working through employer and employee rates. Therefore, that is
the reason of IEF can only using monthly salary deduction up to the staff retirement.
However, the waqif still can donate through other methods provided.

3.2.2 IIUM Al-Quran

Al-Quran Waqf is not mentioning among the type of IEF collection in its annual
report since it is still a new project. However, it does share similarity with
IIUM Waqf Knowledge. It also has a slight difference from IIUM Waqf Knowledge
especially on how to approach the waqif
and the method used. The subject matter of waqf
or mawquf of IIUM Al-Quran Waqf is
the book of Al-Quran itself, but it is a method to collect the donation by
using Al-Quran book as an exchange.

            The waqif of this program is opened for IIUM students and all staff
here even the public are welcome to participate. The waqif can donate through cash by donate it to the IEF staff.
Recently, IEF will open the booth during IIUM convocation in 2017 to encourage
the fresh graduate and their family to participate into this program. IEF
itself done sending this advertisement to all new graduate together with
invitation letter to the convocation. The cover of this Holy Book is by using
IIUM own design that make it as a symbol of IIUM initiative and idea.

One mushaf or
one book of Al-Quran the waqif need
to donate RM 130.00. The cash will then be collected and IEF will use this fund
to assist the needy students of IIUM. From the interview conducted, IEF
mentioned that, RM 30.00 from each mushaf
will be invested.

3.2.3 IIUM Perpetual Endowment Property Fund

some reasons, IEF is not mentioning the word waqf for IIUM Perpetual Endowment Property Fund program. From the
interview conducted, IEF said that this happened long ago by the top board
decision purposely to avoid the State Religious Council of Selangor (SRC) being
involved based on its enactment on waqf.
For example, the gain of waqf revenue
may be divided into two between IEF and SRC just happened to zakat collection where 50% of the
collection will be channeled to SRC but the percentage of waqf separation
revenue to SRC should be even lower than that according to SRC current
practice. Recently, after the introduction of purple book by Malaysian
Government, all public universities must establish their own endowment/waqf departments. Thus, IEF will not
fall behind and still in progression to adapt waqf concept fully on all its waqf

IEF in early spending of waqf building can be seen through the development of Azman Hasim
Complex that located near the center of IIUM main campus (Gombak) and developed
at a cost of RM 8.4 million. However, according to IIUM website (2011), “The
Azman Hashim Complex is a RM7 million multipurpose hall set up to serve the
needs of IIUM students, and to be a revenue source for the IIUM Endowment
Fund”. This building is meant for business rental or ijarah based and there are several business activities there such
as cafeteria, branches of Bank Muamalat Malaysia Berhad, Am Bank, Bank Islam
Malaysia Berhad, Koperasi UIAM Berhad, Daya Bersih Sdn Bhd and several others.
Again, from the IIUM website emphasizes that the income generated from this
building enough to fully support 15 students through scholarship including
their tuition fees, accommodation (hostels) plus their monthly allowance for
the whole period study in IIUM.

In addition, there is a hall in the Azman Hasim
Complex called Dewan Zabedah. This hall is used by IEF to generated income
through rental. As it is a part of Azman Hashim Complex, this hall is also
under the supervision and managed by IEF and Waqf rule 1999. Unlike other parts
of this complex, the hall is being rented if there is any event such as dinner,
talk and wedding ceremony. Below are the features of Zabedah Hall:

Table 3.4: The Features
of Zabedah Hall


Round table seating arrangement
Theater seating arrangement

150 pax
400 pax

Floor space

4220 sqft

Surface of the floor



Glass with motorized curtain




Zabedah Hall Profile, IIUM Endowment Fund



The second and third buildings under the related
project are both meant for hostel and again the revenues are generated from the
rental. The first hostel namely Mahallah HH Sheikh Humaid bin Rashid Al-Nuaimi
is only accepted female IIUM students to stay there. This mahallah was
developed with the cost amounting RM 4.5 million. Below are the details for
those who interested to stay in the hostel:

Table 3.5: Information
on Mahallah HH Sheikh Humaid bin Rashid Al-Nuaimi


RM 510.00 per room

of Occupants

4 students per

of Room

4 individuals room


Shared bathrooms
Shared living room

3.1  Shared
3.2  Cooking
3.3  Shared
3.4  Personal
cabinet for foodstuff





IIUM Portal

third building is also a hostel/mahallah
called Mahallah LTAT which was developed through waqf concept. Again, it is also generated an income through rental
paid by the students. The cost incurred to develop this building was amounting
RM 5.5 million. The construction was funded by LTAT’s foundation or namely
Yayasan Warisan Perajurit. The development was starting on January 2014 and it
was finished by September in the same year means that it took about 9 months.

of this hostel share the same process of development. First of all, IIUM and
IEF will find the suitable project to be developed such as the prizing, place,
marketing analysis and the contractor involved. Then, IEF itself will find the
capable donors or the waqif where they
would agree to funding this project. They will be told the waqf concept used so that there will be no misunderstood especially
the modern waqf concept applied as
well as the basic concept of the perpetual endowment property. Those buildings
will be named in conjunction with the name of the main waqif. For instance, Mahallah HH Sheikh Humaid bin Rashid Al-Nuaimi
is named based on the main waqif, HH
Sheikh Humaid bin Rashid Al-Nuaimi. Same goes to Azman Hashim Complex where it
was named after the donor’s name, Tan Sri Dato’ Azman bin Hashim which is the
one of the richest Malaysian.

the development was completely finished as well as from the legal side, IIUM
started to advertise and welcome the capable IIUM students (female) to occupy
this hostel and collect the rental payment monthly. At the of the day, the
collection will be made into scholarship programme which is also under the
donors’ name. IIUM rector Zaleha Kamaruddin (2013) said in her speech during
launching project of Mahallah LTAT “This is the true manifestation of waqaf – where we spend or disburse the
proceeds arising from the donation, for the needy and those in financial
difficulty, insya Allah in perpetuity”.


3.2: Modus Operandi of IIUM Perpetual Endowment Property Fund program

IIUM Endowment Fund (IEF)


3.3 Achievement and Contribution by IEF

3.3.1 IEF Collection and Disbursement of

source of fund or rather called as collection can be divided by seven
categories. One of segments is related to waqf
and it is called waqf knowledge and a part of perpetual properties program and
some others.