A group of Islamic endowments, or Awqaf, and the Dubai government have launched an international organization tasked with improving investments made in the sector, the founding members said late on Tuesday.
The Awqaf International Organization (AIO) aims to coordinate commercial efforts of sharia-compliant charitable foundations from around the globe, to give them economies of scale and improve profitability.
Awqaf receive donations from Muslims around the world to operate social projects such as mosques, schools and welfare schemes.
They have amassed huge holdings of real estate, commercial enterprises and other assets, which according to a Dubai government estimate total $1 trillion globally.
“It is crucial that we consolidate our efforts to manage and invest Awqaf assets, capital, and returns in a sharia compliant manner,” said Imad Kaddoura, secretary general of Awqaf Canada, one of the founding members of the AIO.
Management of some awqaf assets has been criticised as inefficient, with money often tied up in property or bank deposits that earn miniscule or even zero returns, imposing economic costs on local economies.
The AIO would help awqaf customize initiatives according to geographies to achieve maximum social impact, said Zeinoul Abedien Cajee, national coordinator of Johannesburg-based Awqaf SA.
The body has also been tasked with recommending unified templates for legal frameworks and overseeing applications of sharia standards in accounting, reviewing, and governance, said Husain Benyounis, secretary general of Awqaf New Zealand.
Dubai first announced the initiative in 2013, as part of efforts by the emirate to expand in several areas of Islamic business, from banking to the processing of halal food.
The founding members include Awqaf from South Africa, Canada, New Zealand, Australia, the U.S., and the emirates of Dubai and Sharjah. (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)