The development of social impact measurement framework for waqf : the case of waqf organisations in Malaysia

Abstract

Historically, waqf has been instrumental in funding social infrastructure, addressing societal issues, and fostering positive change in society. However, despite its critical role, the existing performance measurement system for waqf lacks a focus on outcomes and impact, potentially leading to an underestimation of its true potential within the mainstream economy. This is compounded by the absence of standardised methods or frameworks for measuring the impact of waqf. Furthermore, the unresolved accountability issues within waqf organisations increases the call for better accountability measures. To address these problems, Social Impact Measurement (SIM) emerges as a crucial tool. It is a system or framework to assess an organisation’s effectiveness in generating positive societal impact. Therefore, this study aims to explore the current SIM practices among waqf organisations in Malaysia, understand their perceptions regarding the role of SIM in fulfilling accountability, identify key challenges in developing and adopting SIM, and ultimately develop a SIM framework for waqf organisations. The study employs a qualitative approach through case studies, with document analysis and semi-structured interview as the data collection methods. The interviews were conducted with sixteen (16) representatives from four (4) diverse waqf organisations representing waqf organisations under the purview of the federal government, state government, corporate waqf and Labuan International waqf foundation. This study uncovers varying levels of sophistication in SIM among the waqf organisations. While some have embraced some SIM tools, others are in the early stages of development. Overall, SIM is perceived as an important tool to enhance accountability to donors, beneficiaries, regulators, collaborators, and Allah. SIM is also viewed as a tool to build trust and strengthen governance. The findings also reveal that the challenges in SIM adoption encompass a lack of expertise, financial resources, regulatory hurdles, public perception, and standardisation. Nonetheless, there is a consensus on the suitability of Maqāṣid al-Sharīʿah for inclusion in a SIM framework for waqf organisations. The insights gathered from this study have culminated in the development of a tailored SIM framework for waqf which incorporate mission alignment, the theory of change, elements of accountability and key success factors. This framework offers a flexible guide for waqf organisations to measure social impact tailored to their unique needs and contexts. This pioneering study in Malaysia provides a significant contribution to the literature and body of knowledge of SIM in waqf organisations and accountability theory. The findings from the study bridges the gap between theory and practice in terms of improving waqf organisations' accountability towards stakeholders, and alerting policymakers and various agencies to provide the support and training needed to curb the challenges in the SIM adoption. This study also paves the way for a more robust and accountable future for waqf, thereby strengthening their impact on society.