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    Category: Not-for-Profit Finance

    Awqaf Microfinance – Small is Beautiful

    In Islam, lending is considered more of a charitable act than a commercial one. For a Muslim, it’s a matter of faith not to expect…

    Guest Author January 24, 2023
    0 Comments

    An Innovative Islamic Microfinance Institution

    In the paper titled “Leveraging Philanthropy: Monetary Waqf for Microfinance” Dr Muhammad Anas Zarka comes up with some interesting and innovative suggestions for designing an…

    Mohammed Obaidullah December 22, 2022
    0 Comments

    Awqafability: Many Happy Returns

    Guest Blog by Hisham Dafterdar, CPA, PhD Chairman, Awkaf Australia Ltd Sustainability is broadly defined as the ability of something to maintain or “sustain” itself over…

    Guest Author April 8, 2022
    0 Comments

    Awqaf Risk Management: A Case Study

    By Dr Hisham Dafterdar The aim of this case study is to present a dramatically different outcome of a much lauded mode of development financing…

    Guest Author August 30, 2020
    0 Comments

    Artificial Intelligence (AI) through the Lens of Islamic Economics – VI

    We underline some data privacy related guidelines and principles that do not violate the basic beliefs and culture of Islamic societies. They merit serious consideration…

    Mohammed Obaidullah May 2, 2020
    0 Comments

    Artificial Intelligence (AI) through the Lens of Islamic Economics – V

    We can take comfort with the forecast that AI will firmly stay within human control and conveniently, trash the forecast of some that machines will…

    Mohammed Obaidullah April 28, 2020
    0 Comments

    Kafalah (Guarantee) for Shariah-compliant SMEs in the UK

    Kafalah (guarantee) is assurance, its original meaning relates to joining and commitment. Technically Muslim jurists differed about the definition of guarantee. The majority of Hanafis…

    Guest Author April 6, 2020
    2 Comments

    Awqaf: The Quiet Achiever

    Hisham Dafterdar, CPA, PhD Chairman Awkaf Australia Ltd The recent surge of interest in awqaf is due to the increasing awareness of the role of…

    Guest Author April 10, 2017
    0 Comments

    Developing a Governance Framework for Islamic Social Finance Institutions

    February 12, 2015 An Islamic social finance institution is essentially a non-profit or charity organization that seeks to operationalize the concepts of waqf, zakah, sadaqah…

    Mohammed Obaidullah December 14, 2016
    0 Comments

    Lessons from a Hospital Tragedy

    Social edupreneurs like Dr Manoj Nayak deserve respect. I am shocked to see how quickly our society can brush aside all the contribution of this…

    Mohammed Obaidullah October 20, 2016
    18 Comments

    Forum Description

    Social edupreneurs like Dr Manoj Nayak deserve respect. I am shocked to see how quickly our society can brush aside all the contribution of this man towards education, healthcare, social development and what-have-you in the state of Odisha and be swayed by a hostile media. Don't we, the parents of thousands of children who can now aspire to become doctors, engineers and business executive owe something to him? Don't we, the children of thousands of ailing parents receiving quality healthcare in the state owe something to him?

    The media pundits would tell us, well, he did it all for money. I fail to understand how a Trustee who has endowed all his assets to the society be equated with a corporate tycoon seeking to maximize profits? Aren't we questioning the very edifice of our legal system, the eco-system and our very social foundations when we unhesitatingly accept a possibility that "all philanthropists do it for money"!

    Why should we single him out when only 0.5 percent of all hospitals are fire-safety-compliant? How can we digest the rant by the media pundits to close down a hospital with 1200 beds, which is untiringly serving the ailing and the sick? How can the immediate closing down of all the non-compliant hospitals in the state help the provision of healthcare? Should they not be given time to rectify their systems?

    I find it a bit strange that I feel like responding to this news item, sitting on the shores of the red sea in the city of Jeddah in Saudi Arabia. Dr Nayak is no relative of mine. I have little interest in politics. I don't have any vested interests in his reputation that has seen a barrage of onslaughts since the mishap. Perhaps I feel for him because there is a social entrepreneur in me and I always wanted to revert to my native state and serve the people with sustainable developmental projects. Perhaps unwittingly I have accepted Dr Nayak as my ideal. Therefore, what is happening now is truely terrifying.

    The Bhubaneswar hospital tragedy will be remembered for the tragic human loss – the death of the twenty plus ailing patients due to a fire, the reason for which is yet to be ascertained. It will also be remembered for the marathon media trial of a hapless philanthropist and social worker. His ambitions took him to IIT to earn a degree in Computer Science and revert to his state Odisha as a university lecturer. He moved on to establish one of the finest private universities in the country (ranked 16th as per government rating in 2016) and received wide acclaim as a social edupreneur contributing to the all-round development of the region.

    As is often cited as a good practice in the management of non-profits, this Founder-Trustee “kept himself away from the Board of Management of the university and the hospital he founded”. And as the headlines in a section of media suggest “even in the websites of the SOA University his name was conspicuous by its absence.”

    A good practice has been turned up-side down to look like one with a sinister motive.

    Separation of ownership from management is a celebrated principle. It is a globally celebrated principle not just in corporations but in non-profits too. Eugene Fama, the American economist and Nobel laureate, often referred to as "The Father of Finance" writing with Michael Jensen in a widely-cited article in the Journal of Law and Economics argues: “the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits”. The authors further assert in the context of non-profits like universities that “a more formal structure of diffused decision management and control is helpful to Trustees who do not have specialized knowledge about a university's activities.”

    In a Trust, the role of the endower and trustees are clearly spelt out. Section 10 of Indian Trust Act, 1882, defines a trustee as follows: “Every person capable of holding a property may be a trustee; but where the trust involves the exercise of discretion, he cannot execute it unless he is competent to contract.” The primary duty of a Trustee is to obey the directions of the endower and the preservation of the Trust assets. Section 13 of the Indian Trusts Act states that “A trustee is bound to to take such other steps as, regard being had to the nature and amount or value of the trust-property, may be reasonably requisite for the preservation of trust property and the assertion or protection of the title thereto". The paramount duty of the trustee is to take all necessary steps of preservation and protection of the trust property.

    It is an irony that the noble motive of a philanthropist to do things in a professional and competent manner has been deliberately misconstrued as the output of a criminal mindset that could predict the impending disaster and hence, opted for a preemptive exclusion from the Board of Management.

    It is sad. Philanthropy is an idea that needs continuous rejuvenation from thought leaders and leaders  who can put the idea into action. If the motives of actors are under constant suspicion, thanks to our "vigilant-plus" media, I am afraid we may soon have to write the obituary of all philanthropy-driven actions in the region.

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