• 2022-07-20

Endowments and their Responsibility in Entrepreneurship

Worksheet submitted by

Al-Rakhaa Association for Businessmen - Jordan

At the Awqaf Development Conference

17-19 July 2018

In Amman - Jordan

Index :

• Introduction .
• Topic: The role of endowments in the development of entrepreneurs
• paper axes.

• Investment and endowment.
• Types of ancient and contemporary investment in the endowment.
• Controls perpetuation of the endowment.
• Renewal of endowment investment methods.
• The expected pioneering role of endowment investment.
• Recommendations

Introduction: Let me first amend the title to be “Promoting Entrepreneurship Using Modern Endowment Formulas”

Because endowments are a directional and effectual direction, and not a movement in themselves

The importance of endowment in our lives and societies:

The endowment is a long-term charitable investment approach that extends over successive generations that preserves money and directs it to the public benefit, and achieves the principle of social solidarity among members of society.

And the economic importance of the endowment increases in that it first aims to develop human resources and meet the needs of the individuals who benefit from it in the present and the future, taking care to benefit from these generations in the development process.

The endowment is one of the ongoing alms that are hoped for benefit after death, and the wise legislator desired and urged it, because of its great humanitarian, advocacy and economic dimensions.

Investment and endowment:

Investment:The use of money in production, either directly by purchasing machinery and the like, or indirectly, such as buying shares and bonds, i.e. contributing with others with the aim of preserving the asset and acquiring a profit and increasing it.

The ruling on investment is a mandate for the ummah, and it is one of the obligations of sufficiency, and it reaches the point of being obligatory in the event that the money belongs to the individual or his dependents, because the money of the individual is a trust from God in his hand and he is obligated to invest it by any means of halal investment, because the total of individual ownership is a strength of society and a building for him .

The evidence for this is many, and I will mention only of them the Almighty’s saying: {So that it does not become a state among the rich among you} (Al-Hashr: 7), since money does not circulate except through the distribution of alms, and investment that leads to the benefit of everyone from workers, craftsmen, traders and the like.

And the Messenger of God, may God’s prayers and peace be upon him, said: “Trade in the wealth of orphans, which is not consumed by zakat.” Al-Haythami said in Majma’ al-Zawa’id, quoting his sheikh, al-Hafiz al-Iraqi: “Its chain of transmission is authentic.”

As for the endowment

It is the confiscation of cash money or something in kind to benefit from its proceeds in alimony on a certain party.

Therefore, the endowment is considered an investment in all its pillars, and from here it is not permissible to endowment in what is perishable such as food and the like because it is consumed and not developing.

Therefore, investment is the spirit of endowment and ensuring its effectiveness.

There is no doubt that investing endowment funds leads to preserving them so that they are not consumed by expenses and expenses, and contributes to achieving the endowment’s social, economic, educational and development goals. Social backwardness by investing money by marketing, manufacturing and production.

Types of investment that contribute to the development of the endowment:

1. leasing
2. the farmer
3. the course
4. speculation
5. Share
6. ordering to make
7. Murabaha
8. Muqarada and investment bonds
9. instruments
10. What forms of investment can be proposed and have a legal qualification

Perpetuation of the waqf:

Among the masterpieces of our Islamic jurisprudence on the issue of the endowment is that it considered the endowment a legal personality in its own right, which necessitated the appointment of the endowment overseer and manager, which enhances transparency in dealing and eliminates the impact of personalization on the endowment.

This jurisprudential adaptation gave the endowment and charitable work an institutional character that distinguished it from the personal character by several advantages, the most important of which is that institutions are more permanent than the natural person, and that their work is more subject to framing and more amenable to accountability, evaluation and evaluation from outside, in addition to that it can be designed to contain An effective system of internal control, all of which is due to the development of the endowment institution.

In the field of endowments, high transparency and close oversight are necessary for the progress of work, achieving goals and instilling confidence. Transparency and oversight are translated in, among other things, periodic and regular disclosure of the operations of endowment institutions, their accounts, any violations, and the accountability of those responsible, without prejudice to the right of the relevant parties to accountability and accountability.

Renewal of endowment investment methods:

One of the sound foundations in managing the endowment is to build investment portfolios whose composition varies according to the nature and purpose of the endowed money, and therefore they are designed in terms of the degree of risk and the size of the return in a formula that allows obtaining the best possible returns while minimizing the impact of sharp fluctuations on them, taking into account that one of the priorities is to maintain The original so as not to lose and consequently its benefits to the target group of the endowment.

It is based on this that the endowment funds are invested in investments that have real economic and social returns, and stay away as much as possible from sterile investments, because the first type, in addition to working on the development and increase of endowment funds, adds new goods and services to the local economy, provides job opportunities for the unemployed and contributes to increasing Entry, raising living standards, training and qualification for the local labor component, increasing exports and decreasing imports of basic commodities, all of which is directly or indirectly achieving the original endowment objectives.

Therefore, it is necessary to renew the formulas for investing endowments in a way that suits each era within its legal rooting. Today, the following formulas have become among the best investment formulas:

• BOOT . contracts
• Reducing Ijarah
• Partnerships based on the exchange of specialized services and benefits, such as scientific colleges, medical centers, schools, laboratories, and the like.
• And any possible formulas that can be proposed within the continuous renewal of the investment

Investment is capital or current spending for the purpose of obtaining the target return, which is the economic method for developing capital and preserving it from consumption, and investing endowment funds and assets without exposing them to risks is contrary to economic custom, because there is in no way an investment without risk, but the degree of risk varies. From one investment method to another, and the higher the degree of risk, the higher the expected return on investment, and the difference in the investment period of short, medium, and long-term directly affects the return on investment, the longer the period, the lower the investment risk ratio, so the more The duration of investing in endowments funds was more conservative for them, even if the profits were less, because the risk ratio decreases significantly during this period, and this does not mean the concentration of all endowments funds in this area, as good investment opportunities appear from time to time and the profitability ratio is very high. This requires endowment management to take the initiative to seize and invest in it. One of the things that must be taken to reduce the proportion of risk in the endowment funds is to diversify investments in a way that allows the continuity of the expected return from them, especially since the economic fields are evolving and their nature and importance change according to the scientific and technical development available in each era.

The expected pioneering role of endowment investment:

Because the endowment is a long-term charitable investment approach that extends over successive generations that preserves money and directs it to the public benefit, and achieves the principle of social solidarity among members of society.

And because it aims to develop human resources and meet the needs of the individuals who benefit from it in the present and the future,

And because the endowment is one of the ongoing alms that are expected to benefit after death, because of its great humanitarian, advocacy and economic dimensions.

Therefore, it was necessary for the endowment projects to be of public benefit, either by themselves or with what results from them, and there is nothing better than the permanence and investment of endowment works than that they are managed with the zeal of young people and the skill of the elders.

Recommendations:

Studying the investment experiences of endowment funds all over the world, whether Islamic or otherwise.

1. Appointing boards of trustees for endowment funds in which at least 30% of young entrepreneurs participate.
2. Allocating a percentage of no less than 25% of the funds and endowment assets to pilot projects and gradually increasing this percentage.
3. Entering endowment funds to participate with the successful experiences of young entrepreneurs, which contributes to studying the experiences closely and enhances their development and development, thus increasing the endowment’s revenues.
4. The endowment should have a role in developing the skills of young entrepreneurs by organizing qualifying courses for them to develop them administratively and financially, thus reducing the causes of failure in their future projects.
5. Allocating a percentage of the endowment's revenues for scientific research and development contributes to attracting entrepreneurs and thus benefiting from the opportunities they provide.
6. Increasing the rates of youth participation in the endowment works makes the endowment ahead of its time and contributes to shaping the future policies of the society.

in conclusion :

Al-Rakhaa Association for Businessmen is ready to put all its capabilities through the diversity that characterizes its members and through its sponsorship of young businessmen, to contribute directly as a financial and business advisory body, to the development of endowment business and to suggest possible applicable and developmental means that contribute to the endowment service and the service of our society.

Peace, mercy and blessings of God