TRANSFORMING WAQF: From Social Charity to Sustainable Investment through Maqashid al-Shari‘ah in Aceh

Abstract

This study investigates the reorientation of waqf utilization from a traditional charity-based model to a strategic investment framework, analyzed through the lens of maqashid al-shariah. In Lhokseumawe City, Aceh, waqf assets comprise approximately 485,877.42 m² across 296 locations; however, only about 7% are managed productively, indicating a substantial gap in socio-economic impact. The contemporary transformation of waqf practice signifies a paradigm shift from donation-oriented approaches to investment-driven strategies, necessitating a robust theoretical foundation. Adopting a qualitative field research design, the study employed purposive sampling of 15 informants, including nazhir, government officials, and Sharia economic practitioners. Data were collected through in-depth interviews and participatory observation. Findings demonstrate that the five pillars of maqashid al-shariah provide a comprehensive evaluative framework for productive waqf management. Three key patterns were identified—substitution (ibdal–istibdal), functional expansion, and asset conversion—each assessed in relation to principles such as hifzh al-din, hifzh al-mal, and hifzh al-nafs. Aligning waqf practices with maqashid principles enables the integration of Islamic spiritual values with community economic empowerment. While Indonesia’s Law No. 41 of 2004 establishes the legal foundation for waqf governance, policy innovations are required to harmonize it with contemporary Islamic financial instruments. The study recommends regulatory reform, nazhir certification, and the adoption of digital governance to enhance transparency and sustainability. It concludes that embedding maqashid al-shariah within the waqf management framework can unlock the full potential of national waqf assets as a catalyst for sustainable economic development, while preserving the core values of Sharia at every stage of asset management.