Awqaf: A 1,000-year-old blueprint for modern impact investing

This article from UNSW Centre for Social Impact introduces 'awqaf', a type of Islamic endowment used for over 1,000 years to fund public services like hospitals, schools and community infrastructure. The author explains that awqaf work by keeping the original gift intact forever and using only the income to support community needs. Examples from history show that awqaf funded major institutions and some still do today.

The article highlights three key features that make awqaf interesting for modern impact investing. First, the original donation or asset is never spent, so it can generate support for communities indefinitely. Second, awqaf provide stable long-term benefits instead of relying on short-term funding cycles. Third, they follow ethical investment rules based on Islamic principles that avoid harmful industries and focus on education, health and social good.

Although awqaf are well established in many parts of the world, the model has not been widely used in Australia. The article suggests that Australia’s growing and diverse population could benefit from exploring awqaf as a way to build funds that support affordable housing, community health and social enterprises. Australian initiatives like Awqaf Australia show how this approach can work locally by preserving capital and using investment returns to fund community projects.

The article connects this traditional model to current trends in ethical investing and impact finance. It suggests that learning from ancient systems like awqaf might help create more durable and values-driven funding pathways for social impact. This makes it useful for people interested in philanthropy, impact investing, ethical finance and community development.