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.
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.
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 endowed property should be ready for occupation or use. It is not possible to make a suspended or deferred endowment, except for something that is willed to become an endowment on the owner’s death.
8. The conditions stipulated by the person creating the endowment must be abided by, as long as they do not contravene Islamic law.
9. If the endowment is for the benefit of one’s children and grandchildren, it is shared equally between males and females.