Note: Waqfi by Azzad Asset Management is a donor advised fund built on waqf principles. It is designed to preserve principal, distribute income, and offer an immediate tax deduction. For more information visit waqfidaf.com.
Picture a woman we’ll call Amina. (Not a real client.) She has spent decades building a career and a family, and she has always given generously: Ramadan fundraisers, mosque campaigns, the occasional emergency appeal. Lately, though, one question keeps returning. What if my giving didn’t have to stop when I do?
Her grandmother used to talk about waqf, the Islamic tradition of setting aside an asset so its benefit flows to others for generations. Amina loves the idea, but creating a waqf has always seemed complicated. She also wants to be smart about taxes and to invest in a way that reflects her values.
This is the moment Waqfi was designed for.
What Is a Waqf?
A waqf is a specialized endowment that is designed to preserve underlying assets while directing income toward charitable purposes. It is intended to continue in perpetuity, carrying forward the intent of the person who established it.
Waqfi is an Arabic term meaning “My Waqf.” The Waqfi DAF from Azzad Asset Management makes creating a waqf more accessible and easier, through a donor advised account that honors both modern philanthropy and Islamic traditions.
Amina’s First Steps
Amina learns she can open a Waqfi donor advised fund starting at $25,000. From there, it looks much like the donor advised giving she already understands:
• She can give cash, stocks, and more and may qualify for an immediate tax deduction.
• Her contributions can be invested in halal investment allocations for potential tax-free growth.
• Over time, she can recommend grants to her favorite charities.
Giving appreciated assets can also help her avoid capital gains taxes, and her children can join the conversation, making it a family project.
Why Not Just a Regular DAF?
Amina wonders whether she needs a Waqfi DAF at all. Both account types are designed to offer an immediate tax deduction, tax efficiency, legacy planning, and a range of investment options. But the Waqfi adds:
• A spending policy calculated annually, so she doesn’t have to guess how much to give.
• Intended preservation of principal. Only income is distributed.
• Preservation of donor intent. Grants are restricted to charities that meet the grantor’s original intent.
• Perpetual duration. It’s designed for generations.
A traditional DAF may be established with as little as $5,000 and offers flexibility. A Waqfi can be established with a minimum contribution of $25,000 and is designed to support long-term charitable giving. Amina wants to create a lasting legacy.
The Questions She Asked
“How will I know how much to give each year?” Answer: An annual distribution statement is uploaded to the donor portal, showing how much income to distribute to charities that year. To allow time for income to accumulate, there is no distribution in the first three years.
“What if I want to give more or less?” Answer: Following the distribution amount maintains the sanctity of the waqf terms. For more flexibility, Azzad recommends opening a regular DAF account instead.
“Will it be invested differently?” Answer: Yes. Waqfi DAF accounts use an investment strategy designed to generate income and maintain the assets in perpetuity.
Where Her Story Goes Next
Amina’s story is an illustration, but her question is one many families ask: how do I turn good intentions into lasting impact? With a structure built for the long term, charitable giving can keep benefiting you and the causes you care about for generations.
Ready to start your own? Learn more at waqfidaf.com.
Azzad Asset Management, Inc. is an SEC-registered investment adviser. Registration does not imply SEC endorsement or a particular level of skill or ability. Amina is fictional and does not reflect an actual client experience. Tax benefits vary based on individual circumstances and applicable laws, which may change. DAF contributions are irrevocable, and the sponsoring charity retains legal control of assets, subject to donor advisory privileges. Investing involves risk, including possible loss of principal. This information is for educational purposes only and is not tax or legal advice. Consult a qualified tax or legal professional regarding your circumstances.
