Rooted in Islamic philanthropic traditions, endowments – known as waqf in Arabic – are ongoing charitable funds that play a significant role in driving sustainable development by helping resolve pressing social concerns and creating long-term economic growth. More than being mere financial instruments, they are pillars to build an equitable society by supporting underprivileged communities and contributing to nation-building.
There are endowments specialised in education, healthcare, and poverty alleviation as well as in providing community housing, and in contributing to the national economy through investments in projects and developments that yield long-term returns.
Globally, endowments are gaining faster traction and are increasingly regarded as a sustainable funding model that can enhance the impact of social initiatives. With a focus on impact investing, endowments serve as pathways where financial returns are channelled for social or environmental benefits and commercial benefits.
Institutions recognise the value of such sustainable financial pathways so do people, who trust endowments to deliver on their philanthropic outlook and goals. But while people individually can make a limited difference, investing in endowments helps multiply their impact, propelling future initiatives.
The Arab world has seen a revival of interest and activity in endowments, which are contributing incremental value to the economy. Awqaf Abu Dhabi, for example, is the apex entity in the UAE capital, mandated with developing, managing and driving endowments as well as minors’ funds – delivering a dual impact: One, economic value creation and two, tangible improvements to the lives of the economically less performing sections.
In the past, traditional endowments have played a key role in supporting essential services through philanthropic financing. Today, innovative models of endowments are taking centrestage and further catalysing social progress.
They harness the power of technology, and prioritise financial sustainability. This is exemplified in the focus on Awqaf Abu Dhabi to embrace the pillars of the circular economy. They are also building strategic partnerships to bring measurable social impact.
Compared to one-time donations or short-term grants, endowments create a sustainable and stable source of support, which enable people and organisations to be a part of long-term projects for social development.
Many endowment funds are also incorporating environmental, social, and governance (ESG) criteria into their investment strategies, aligning with national Net Zero goals.
In the UAE, recent initiatives, such as the Dh1 billion healthcare endowment fund launched by Awqaf Abu Dhabi and the Department of Health in Abu Dhabi, have a higher noble purpose. They lend sustainable support in providing essential healthcare services and ensuring that high quality medical care is available for all. Such funds have a long-term role in promoting the well-being of the community as well as building a stronger healthcare infrastructure.
The success of endowments is underpinned by the transparency of its operations – one that the UAE focuses on. The government’s vision to ensure accountability and structured endowment management is exemplified in the establishment of Awqaf Abu Dhabi, which has frameworks to promote endowments and ensure sustainable wealth creation that benefits the entire community.
From funding clean energy research to preserving cultural heritage, endowments also bring flexibility to address relevant priorities. The UAE's model of integrating endowments into its national development strategy, indeed, serves as a model – which includes a supportive legal environment, accelerating public-private partnerships, and aligning endowment objectives with national priorities such as clean energy.
Endowments play a significant role in promoting social and economic progress. As a reliable source of funding for initiatives, ranging from education and healthcare to environmental sustainability, they also focus on delivering national priorities – such as job creation for youth and supporting the growth of ancillary industries in the small and medium enterprises sector – directly or indirectly.
Endowments are accelerating innovation in various sectors of the economy by serving as a trusted partner that supports growth initiatives. The growth and evolution of endowments, which have a significant societal role to play, can be further amplified through the support of philanthropists, who can channel their strategic charitable contributions to the endowment managers for long-term economic value generation.
Supported by clear guidelines, and a focus on capacity building – especially among youth – endowments are also accelerating public private sector collaborations and engaging civil society to create a sustainable ecosystem that delivers positive change for all sections of the community.
By providing essential financing for the benefit of under-served communities and partnering with civil society and grassroots organisations that are focused on positive change, endowments are contributing to a more equitable society. And every member of the community can be part of this and be positive changemakers.
