Waqf Investment Funds: How Cash Waqf Works and Whether Donors Earn Income

A waqf investment fund pools charitable endowment money, invests it in Shariah-compliant assets and spends the returns on good causes, while the original sum is preserved. In a standard cash waqf the donor receives no income. Two exceptions exist: Indonesia’s cash waqf-linked sukuk return the donor’s principal at maturity, and Malaysian “waqf-featured” unit trust funds split returns between investors and charity.

Reviewed by Hafiz Maqsood Ahmed.

Waqf, an endowment dedicated permanently or for a set term to charitable use, financed mosques, schools and hospitals for centuries, mostly through land and buildings. Cash waqf funds bring the same idea to financial markets, and governments in Indonesia, Malaysia and Singapore now use them to channel Islamic philanthropy into investment. For the basic concept, see our explainer on what a waqf is and how it works.

How a cash waqf fund works

Singapore’s Islamic Religious Council (MUIS) describes the model: cash waqf contributions are “pooled into a corpus, which is invested in shariah-compliant instruments. The net income goes to nominated beneficiaries.” MUIS says Singapore’s waqf assets were worth more than 900 million Singapore dollars as of December 2021.

Charities use the same structure. Islamic Relief sells a Waqf Share for £150, invested by its subsidiary the International Waqf Fund in Shariah-compliant assets, with the returns funding relief and development projects; donors receive no financial return, according to Islamic Relief.

Indonesia: cash waqf-linked sukuk

Indonesia launched cash waqf-linked sukuk (CWLS) in October 2018. In the retail series, donors’ money is invested in government sukuk; the yield funds social programs through registered waqf managers, and the principal is returned to the donor at maturity. It is a temporary waqf: the donor gives away the returns, not the capital.

The program has grown. The SWR006 series, offered from Aug. 22 to Oct. 15, 2025, raised 306.28 billion rupiah from 799 donors for a two-year term with a minimum return of 5.70 percent, the Finance Ministry said in its results announcement, roughly double the 147.37 billion rupiah raised by the SWR005 series in 2024. Proceeds fund projects such as scholarships, an ambulance service and support for micro businesses, with the Indonesian Waqf Board supervising the waqf managers.

Malaysia: waqf-featured funds

Malaysia’s Securities Commission introduced a framework for “waqf-featured” funds that took effect on Nov. 12, 2020, covering unit trust and wholesale funds that allocate all or part of their returns to waqf, according to its announcement. This is the closest thing to a waqf product with income for the investor.

The first such fund, BIMB Investment’s Makmur myWakaf Fund, launched in April 2021 with a target annual distribution of at least 5 percent, half paid to investors and half to waqf, Malay Mail reported at the time.

Comparing the models

Is a waqf fund a source of passive income?

For most donors, no. A waqf is a gift: the benefit goes to the named beneficiaries, and the reward the donor seeks is religious. Investors who want both an income and a charitable component can look at funds with a stated split, such as Malaysia’s waqf-featured funds, and read the fund documents to see exactly what share goes to charity. Online platforms that collect waqf donations are compared in our guide to waqf crowdfunding platforms.

The wider Islamic finance market is covered in our guide to Islamic finance and fintech.