Waqf and the sustainable development goals: examining the pathways of governance and resource utilization in Indonesia

  • Ade Sofyan Mulazid 
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia
    https://orcid.org/0000-0002-5254-5390
  • Yoghi Citra Pratama
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia
  • M. Arskal Salim GP
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia
  • Wahdi Sayuti
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia
  • Yessi Fitri
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia
  • Muhaimin Muhaimin
    Universitas Islam Jakarta
    Indonesia
  • M. Syukri
    Universitas Islam Negeri Syarif Hidayatullah Jakarta
    Indonesia

Abstract

Waqf is an important instrument in Islamic social finance with significant potential to support the achievement of the Sustainable Development Goals (SDGs), particularly in developing countries such as Indonesia. However, the contribution of waqf to sustainable development largely depends on the quality of governance and the effective utilization of waqf assets. This study aims to examine the influence of waqf governance and waqf utilization on the achievement of the SDGs in Indonesia, as well as to analyze their mediating role in the relationship between waqf resources and sustainable development outcomes. This research adopts a quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM). Data were collected from waqf management institutions and relevant stakeholders in Indonesia. The results indicate that waqf governance has a positive effect on SDG achievement (β = 0.2644), while waqf utilization shows a stronger positive influence (β = 0.4958). Furthermore, waqf resources positively affect both governance and utilization. These findings highlight the importance of strengthening governance practices and optimizing the utilization of waqf assets to enhance the contribution of Islamic social finance to sustainable development.

Keywords
  • Waqf governance
  • Waqf utilization
  • SDG achievement
  • Social finance
  • Indonesia
Lisensing Information
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References
  1. Abdullah, M. A. (2020). The potential of Islamic philanthropy in achieving sustainable development goals. Journal of Islamic Economics and Finance, 12(2), 45–60.
  2. Ahmed, H. (2015). Waqf-based microfinance: Realizing the social role of Islamic finance. In Essays in Islamic Economics and Finance (pp. 1–25). Islamic Research and Training Institute.
  3. Ali, K. M., & Hatta, Z. A. (2014). Waqf as a tool for poverty alleviation: The case of Bangladesh. International Journal of Social Economics, 41(7), 592–605.
  4. AlNemer, H. (2022). Strengthening Governance of Waqf in the Kingdom of Saudi Arabia: Status, obstacles, and institutional transformation. Archives of Business Research, 10(5), 78–91. https://doi.org/10.14738/abr.105.11974
  5. Antoni, & Septyanto, D. (2018). Professional management of waqf assets for sustainable development in Indonesia. Al-Iqtishad: Journal of Islamic Economics, 10(1), 1–18.
  6. Ayub, M., Khan, K., Khan, M., & Ismail, M. (2025). Management and governance of Awqāf as social finance institutions. Qualitative Research in Financial Markets. https://doi.org/10.1108/QRFM-01-2025-0013
  7. Chapra, M. U. (2000). The future of economics: An Islamic perspective. The Islamic Foundation.
  8. Cizakca, M. (2011). Islamic capitalism and finance: Origins, evolution and the future. Edward Elgar Publishing.
  9. Franke, G., & Sarstedt, M. (2019). Heuristics versus statistics in discriminant validity testing: A comparison of four procedures. Internet Research, 29(3), 430–447. https://doi.org/10.1108/IntR-12-2017-0515
  10. Hadi, S., & Susanto, P. (2022). Environmental dimensions of SDGs in Indonesia: A policy analysis. Indonesian Journal of Sustainable Development, 4(1), 22–35.
  11. Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021a). An Introduction to Structural Equation Modeling. In J. F. Hair, G. T. M. Hult, C. M. Ringle, M. Sarstedt, N. P. Danks, & S. Ray, Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R (pp. 1–29). Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7_1
  12. Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021b). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook. Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7
  13. Haji-Othman, Y., Yusuff, M. S. S., & Hussain, M. N. M. (2024). Data Analysis Using Partial Least Squares Structural Equation Modeling (PLS-SEM) in Conducting Quantitative Research. International Journal of Academic Research in Business and Social Sciences, 14(10), Article 10. https://doi.org/10.6007/IJARBSS/v14-i10/23364
  14. Hasan, S. (2018). Philanthropy and social justice in Islam: Principles, prospects, and practices. IBT Ocular.
  15. Hasan, Z. (2020). The role of waqf in achieving SDGs: An Indonesian perspective. Journal of Waqf and Islamic Philanthropy, 2(1), 1–15.
  16. Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
  17. Hoque, N., Khan, M. A., & Mohammad, K. D. (2015). Waqf-based social business for poverty alleviation in Bangladesh. Humanomics, 31(3), 221–239.
  18. Huda, N., Rini, N., & Anggraini, D. (2021). The role of waqf resources in enhancing community welfare. Journal of Islamic Monetary Economics and Finance, 7(1), 1–24.
  19. Ibrahim, N. A., Rashid, U., Taufiq-Yap, Y. H., Yaw, T. C. S., & Ismail, I. (2019). Synthesis of carbonaceous solid acid magnetic catalyst from empty fruit bunch for esterification of palm fatty acid distillate (PFAD). Energy Conversion and Management, 195, 480–491. https://doi.org/10.1016/j.enconman.2019.05.022
  20. Ihsan, H., & Adnan, M. A. (2019). Waqf accounting and management: Principles and practices. Pearson.
  21. Ismail, S., & Shafiai, M. H. M. (2015). The role of waqf in providing sustainable development. International Journal of Social Economics, 42(5), 452–466.
  22. Jones, P., & Green, W. (2020). The social and environmental pillars of SDGs. Sustainable Development, 28(4), 725–735.
  23. Kahf, M. (2003). The role of waqf in improving the ummah welfare. International Seminar on Waqf as a Private Legal Body, 1–15.
  24. Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of E-Collaboration, 11(4), 1–10. https://doi.org/10.4018/ijec.2015100101
  25. Kusuma, D., & Putra, A. (2021). Holistic approaches to SDGs in Indonesia. Journal of Indonesian Development Studies, 3(2), 112–128.
  26. Mohammed, J. A., & Razak, D. A. (2019). Digital technology in waqf management: Enhancing transparency and trust. International Journal of Islamic Finance, 11(2), 235–250.
  27. Nahar, H. S., & Yaacob, H. (2011). Accountability in the sacred context: The case of management, accounting and reporting of a Malaysian cash awqaf institution. Journal of Islamic Accounting and Business Research, 2(1), 87–113.
  28. Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
  29. Radomir, L., & Moisescu, O. I. (2019). Discriminant validity of the customer-based corporate reputation scale: Some causes for concern. Journal of Product & Brand Management, 29(4), 457–469. https://doi.org/10.1108/JPBM-11-2018-2115
  30. Rahman, F., & Ismail, A. (2017). Waqf for quality education: Funding schools and scholarships. Journal of Education and Waqf, 3(1), 77–92.
  31. Ridwan, M. (2019). Human resource and infrastructure challenges in waqf management. Indonesian Journal of Waqf Management, 2(1), 1–14.
  32. Salamon, laster M. (2012). The State of Nonprofit America. Brookings. https://www.brookings.edu/books/the-state-of-nonprofit-america/
  33. Sarea, A. M. (2016). The role of waqf in reducing economic inequality. Journal of Economic Cooperation & Development, 37(1), 1–20.
  34. Sari, P. (2021). Waqf for sustainable infrastructure in remote areas. Journal of Infrastructure Development, 8(2), 89–104.
  35. Sarstedt, M., Hair, J. F., Pick, M., Liengaard, B. D., Radomir, L., & Ringle, C. M. (2022). Progress in partial least squares structural equation modeling use in marketing research in the last decade. Psychology & Marketing, 39(5), 1035–1064. https://doi.org/10.1002/mar.21640
  36. Setiawan, N. (2024). Pengaruh Good Corporate Governance terhadap Kinerja Lembaga Wakaf di Indonesia. Journal of Islamic Finance and Syariah Banking, 2(1), 67–75. https://doi.org/10.63321/jifsb.v2i1.59
  37. Siregar, K. E. (2024). Optimizing the Role of Waqf in Sustainable Development through an Islamic Education Perspective: A Comprehensive Literature Study. RISALAH IQTISADIYAH: Journal of Sharia Economics, 3(1), 1–9. https://doi.org/10.59107/ri.v3i1.58
  38. Smith, J., & Brown, K. (2019). Collaborative efforts for inclusive and sustainable development targets. Global Policy, 10(1), 112–125.
  39. Syahran, S., & Alzahira, S. (2025). Analysis of Cash Waqf Management Strategy to Improve the Economy of the Community. Seriat Ekonomisi, 2(2), 77–85. https://doi.org/10.35335/zgksa959
  40. Trizano-Hermosilla, I., & Alvarado, J. M. (2016). Best alternatives to Cronbach’s alpha reliability in realistic conditions: Congeneric and asymmetrical measurements. Frontiers in Psychology, 7, 769. https://doi.org/10.3389/fpsyg.2016.00769
  41. United Nations. (2015). Transforming our world: The 2030 agenda for sustainable development. United Nations Department of Economic and Social Affairs.
  42. Utami, Y., & Syafitri, F. N. A. (2025). Evaluating the Performance of Nazhir Muhammadiyah Central Java in Advancing Sustainable Development Goals. Journal of Economics Research and Social Sciences, 9(1), 108–125. https://doi.org/10.18196/jerss.v9i1.25861
  43. Yusuf, M., & Hidayat, R. (2019). Waqf for environmental goals: Conservation and climate mitigation. Journal of Environmental Waqf, 2(1), 33–48.
  44. Zainal, N., Daud, D., Muda, R., Kasim, E. S., & Iqbal, M. M. (2025). From Charity to Strategic Asset Governance: Ethical Wealth Preservation in Waqaf Institutions. International Journal of Academic Research in Economics and Management Sciences, 14(3), Article 3. https://doi.org/10.6007/IJAREMS/v14-i3/26624

Downloads

PDF

Statistic

Abstract Views
: 128 times
PDF
: 119 times