Endowment means dedicating something that can give benefit, while retaining ownership of it, in order to gain reward from Allah. This means that the principal is retained, but the yield is given freely
Endowment means dedicating something that can give benefit, while retaining ownership of it, in order to gain reward from Allah. This means that the principal is retained, but the yield is given freely. For example, a person may make a house an endowment, renting it and using the rent to help poor people, or to maintain a mosque, or to publish religious books, etc.
Creating an endowment is highly encouraged, and this is illustrated by what is reported about 'Umar:
‘He obtained some agricultural land at Khaybar. He went to the Prophet (peace be upon him) and asked him: “O Messenger of Allah, I have this land at Khaybar, which is the most valuable property I have ever hadowned. What do you order me to do with it?” The Prophet (peace be upon him) said: “You may wish to retain the principal and dedicate the yield for charity.” [Umar did that, stipulating that the land itself would never be sold, given as a gift, or possessed by inheritance.’
Related by al-Bukhari, hadith No. 2,737; Muslim, hadith No. 1,632
Abu Hurayrah reports that the Prophet (peace be upon him) said:
‘When a human being dies, all his deeds come to an end except in three ways: a continuous act of charity, a useful contribution to knowledge or a dutiful child who prays for him.’
Related by Muslim, hadith No. 1,631
The continuous act of charity means the endowment.
Rulings: The following rulings apply to endowments:
1. The person dedicating the endowment must be qualified to take such action, being a sane, free adult who can make appropriate decisions.
2. The endowed property should be of a type that can be used for a long time, while it remains, and it must be clearly identified.
3. The endowment should be to serve a good purpose, such as the maintenance of mosques, helping poor people, education, etc. Its aim is to earn Allah’s reward. Therefore, it is forbidden to make an endowment to maintain the temples of non-Muslims or to buy what is forbidden.
4. If what is endowed falls into a state that makes it of no benefit, it may be sold provided that its value is used for a purpose similar to that intended by the person who endowed it. For example, if it is a mosque the funds should go towards building a similar mosque, and if it is a house the funds should be used towards buying a similar house. This is to maintain the purpose for which it was originally endowed.
5. An endowment is a binding contract which is confirmed by a mere verbal statement. An endowment cannot be revoked or sold.
6. The endowed property should be identified; endowing what is unidentified is void.
7. The conditions stipulated by the person creating the endowment must be abided by, as long as they do not contravene Islamic law.
8. If the endowment is for the benefit of one’s children and grandchildren, it should be shared equally between males and females.
- Al-Zuhaili, Al-Fiqh al-Islami, vol. 6, p. 4,535