Skip to main content
SpringerLink
Log in

Mediating Role of Trust in Cash Waqf Donations

  • Chapter
  • First Online:
Revitalization of Waqf for Socio-Economic Development, Volume II

Abstract

Cash waqf donations are being administered by Islamic banks in Bangladesh. This study investigates the determinants of such donations by the depositors of Islamic banks using the waqf. The data for the study was collected through a self-administered questionnaire from 317 randomly selected depositors of two Islamic banks. The structural equation modelling approach was used to establish the significant determinants and validate the Modified Key Mediating Variable (MKMV) model developed in the study. The results indicated that board ability, board integrity, communication and accountability positively influence depositors’ trust, while board opportunism has a negative impact on trust. Trust has a positive impact on depositors’ commitment towards continuous donations. While trust fully mediates the impacts of board benevolence, board integrity, board opportunism and communication on commitment, the impacts of board ability and accountability on commitment are partially mediated by trust. The study is limited to only two Islamic banks. Therefore, the inclusion of all Islamic banks offering cash waqf deposits would improve the generalisability of the results. This study indicates the areas that require the necessary reform by Islamic banks. Public waqf administrators will also be able to understand the significance of factors discussed in the study. Sargeant and Lee (Journal of Nonprofit and Public Sector Marketing 18(2):1–33, 2004) first realized the potential of the waqf for charities operating in the UK. This study is the first to test the significance of the waqf and the validity of MKMV model for Islamic banks performing as a non-profit religious organization in a South-East Asian country.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 199.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

References

  • Abosag, I., Tynan, C., & Lewis, C. (2006). The Commitment-Trust Theory: The British and Saudi Arabian Cross-National Perspective (pp. 1–24).

    Google Scholar 

  • Ahmad, A., Muhammad, S. B., & Kamaruzaman, M. A. S. B. (2012). Educational Development through Waqf. In 3rd International Conference on Islam and Higher Education (3rd ICIHE) (pp. 1–22).

    Google Scholar 

  • Ahmed, H. (2007). Waqf Based Microfinance: Realizing the Social Role of Islamic Finance. In International Seminar on Integrating Awqaf in the Islamic Financial Sector. Singapore.

    Google Scholar 

  • Ayan, R., Zainon, S., & Wah, Y. B. (2012). Quality Information by Charity Organizations and its Relationship with Donations. Recent Advances in Business Administration, 118–123.

    Google Scholar 

  • Aziz, M. R. A., Johari, F., & Yusof, M. A. (2013). Cash Waqf Models for Financing Education. In 5th Islamic Economics System Conference (iECONS, 2013) (pp. 835–842). Kuala Lumpur.

    Google Scholar 

  • Aziz, M. R. A., Yusof, M. A., Johari, F., Ramli, A., & Sabri, H. (2014). The Relief of Higher Education Loan Through Islamic Waqf Bank. Asian Social Science, 10(22), 175–181. https://doi.org/10.5539/ass.v10n22p175.

    Article  Google Scholar 

  • Baron, R. M., & Kenny, D. A. (1986). He Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic and Statistical Considerations. Journal of Personality and Social Psychology, 51, 1173–1182.

    Article  Google Scholar 

  • Bennett, R., & Barkensjo, A. (2005). Causes and Consequences of Donor Perceptions of Quality of the Relationship Marketing Activities of Charitable Organisations. Journal of Targeting, Measurement and Analysis for Marketing, 13(2), 122–139.

    Article  Google Scholar 

  • Butler, J. K. (1991). Toward Understanding and Measuring Conditions of Trust: Evolution of Conditions of Trust Inventory. Journal of Management, 17, 643–663.

    Article  Google Scholar 

  • Cizakca, M. (1997). Towards a Comparative Economic History of the Waqf System. Al-Shajarah.

    Google Scholar 

  • Cizakca, M. (2004a). Incorporated Cash Waqfs and Mudaraba, Islamic Non-bank Financial Instruments from the Past to the Future. In International Seminar on Non-bank Financial Institutions.

    Google Scholar 

  • Cizakca, M. (2004b). Ottoman Cash Waqfs Revisited: The Case of Bursa 1555–1823. Foundation for Science Technology and Civilization, 1–20. Retrieved from http://www.fstc.co.uk.

  • Connolly, C., & Hyndman, N. (2013). Charity Accountability in the UK: Through the Eyes of the Donor. Qualitative Research in Accounting & Management, 10, 259–278.

    Article  Google Scholar 

  • Cook, J., & Wall, T. (1980). New Work Attitude Measures of Trust, Organisational Commitment, and Personal Need Nonfulfillment. Journal of Occupational Psychology, 53, 39–52.

    Article  Google Scholar 

  • Daud, D., Rashidah, A. R., & Zaluddi, S. (2011). Waqf Reporting to Fulfil Stakeholder Attribution in Waqf Islamic Councils. Business Management Quarterly Review (BMQR), 2, 38–53.

    Google Scholar 

  • Fama, E. (1980). Agency Problems and Theory of the Firm. Journal of Political Economy, 88, 288–307.

    Article  Google Scholar 

  • Fama, E., & Jenses, M. (1983). Agency Problem and Residual Claims. Journal of Law and Economics, 26(2), 327–329.

    Article  Google Scholar 

  • Field, A. (2009). Discovering Statistics Using SPSS (3rd ed.). Thousand Oaks, CA: Sage.

    Google Scholar 

  • Gronbjerg, K. A., & Nelson, S. (1998). Mapping Small Religious Nonprofit Organisations: An Illinois Profile. Nonprofit & Voluntary Sector Quarterly, 27, 13–31.

    Article  Google Scholar 

  • Hair, J., Black, W., Babin, B. J., Anderson, R. E., & Tatham, R. (2006). Multivariate Data Analysis. Retrieved from http://library.wur.nl/WebQuery/clc/1809603.

  • Hair, J. F., Jr., Black, W. C., Babain, B. J., Anderson, R. E., & Tatham, R. L. (2009). Multivariate Data Analysis. Pearson. Retrieved from http://library.wur.nl/WebQuery/clc/1809603.

  • Hamdan, N., Mohd Ramli, A., Jalil, A., & Haris, A. (2013). Accounting for Waqf Institutions: A Review on the Adaptation of Fund Accounting in Developing the Shariah Compliant Financial Reports for Mosque. In UITM & IKAZ (Eds.), Transforming Islamic Philanthropy for Ummah Excellence (Vol. 2013). UITM.

    Google Scholar 

  • Haneef, M. A., Mohammed, A. H. P. M. O., Amin, M. F. B., Muhammad, D., Pramanik, A. H., Mohammed, M. O., et al. (2015). Integration of Waqf-Islamic Microfinance Model for Poverty Reduction: The Case of Bangladesh. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 246–270. https://doi.org/10.1108/IMEFM-03-2014-0029.

    Article  Google Scholar 

  • Hardy, L., & Ballis, H. (2013). Accountability and Giving Accounts: Informal Reporting Practices in a Religious Corporation. Accounting, Auditing & Accountability Journal, 26(4), 539–566. https://doi.org/10.1108/09513571311327453.

    Article  Google Scholar 

  • Harun, F. M., Possumah, B. T., Shafiai, M. H. B. M., & Noor, A. H. M. (2014). Empowering Higher Education Institution: The Role of Waqf—Malaysian Perspective. In Australian Academy of Business and Social Sciences Conference.

    Google Scholar 

  • Harzing, A.-W. (1996). Response Rates in International Mail Surveys: Results of a 22-Country Study. International Business Review, 6(6), 641–665.

    Article  Google Scholar 

  • Hernández, B., Jimenéz, J., & Martín, M. J. (2008). Extending the Technology Acceptance Model to Include the IT Decision-Maker: A Study of Business Management Software. Technovation, 28(3), 112–121.

    Article  Google Scholar 

  • Ho, P., & Taylor, G. (2013). Corporate Governance and Different Types of Voluntary Disclosure: Evidence from Malaysian Listed Firms. Pacific Accounting Review. Retrieved from http://www.emeraldinsight.com/doi/abs/10.1108/01140581311318940.

  • Holdford, D., & White, S. (1997). Testing Commitment-Trust Theory in Relationships Between Pharmacy Schools and Students. American Journal of Pharmaceutical Education, 61(Fall), 249–256.

    Google Scholar 

  • Ibrahim, H., Amir, A., & Masron, T. A. (2013a). Cash Waqf: An Innovative Instrument for Economic Development. International Review of Social Sciences and Humanities, 6(1), 1–7.

    Google Scholar 

  • Ibrahim, H., Nor, E., & Muhammad, J. (2013b). Cash Waqf and Its Development in the Northern Region of Malaysia. In 4th International Conference on Business and Economic Research (4th Icber 2013) Proceeding (pp. 276–284).

    Google Scholar 

  • Ihsan, H., & Adnan, M. (2011). Waqf Accounting and the Construction of Accountability. Humanomics, Emerald, 27, 252–269.

    Article  Google Scholar 

  • Jarvenpaa, S. L., Knoll, K., & Leidner, D. E. (1998). Is Anybody Out There? Antecedents of Trust in Global Virtual Teams. Journal of Management Information Systems, 14(4), 29–64.

    Article  Google Scholar 

  • Jöreskog, K. G., & Sörbom, D. (1993). LISREL 8: Structural Equation Modeling with the SIMPLIS Command Language. Chicago, IL: Scientific Software International.

    Google Scholar 

  • Kasri, R. A. (2012). Maqasid al-Shariah and Performance of Zakah Institutions. In 5th Kyoto-Durham International Workshop on Islamic Economics and Finance (pp. 19–41).

    Google Scholar 

  • Khong, K. W., Onyemeh, N. C., & Chong, A. Y. L. (2013). BSEM Estimation of Network Effect and Customer Orientation Empowerment on Trust in Social Media and Network Environment. Expert Systems with Applications, 40(12), 4858–4870.

    Article  Google Scholar 

  • Knoll, D. L., & Gill, H. (2011). Antecedents of Trust in Supervisors, Subordinates, and Peers. Journal of Managerial Psychology, 26(4), 313–330. https://doi.org/10.1108/02683941111124845.

    Article  Google Scholar 

  • Maali, B. M., & Atmeh, M. A. (2015). Using Social Welfare Concepts to Guarantee Islamic Banks’ Deposits. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 134–149. https://doi.org/10.1108/IMEFM-12-2013-0125.

    Article  Google Scholar 

  • Mandeville, J. E. (1979). Usurious Piety: The Cash Waqf Controversy in the Ottoman Empire. International Journal of Middle East Studies, 10, 33–42.

    Google Scholar 

  • Mannan, M. A. A. (1998). Cash Waqf, Enrichment of Family Heritage Generation to Generation (Social Investment Bank Publication Series No. 1).

    Google Scholar 

  • Marsyita, D., & Febrian, E. (2004). The Role of Republic Bank of Indonesia (RBI) in the Indonesian Cash Waqf House’s System. InKertas Kerja International Seminar on Developing Microbanking: Creating Opportunities for the Poor Through Innovation.

    Google Scholar 

  • Masruki, R., & Shafii, Z. (2013). The Development of Waqf Accounting in Enhancing Accountability. Middle-East Journal of Scientific Research (Research in Contemporary Islamic Finance and Wealth Management), 13, 1–6.

    Google Scholar 

  • Masyita, D., & Febrian, E. (2004). The Role of BRI in the Indonesian Cash Waqf House’s System. In BRI International Seminar on Developing Microbanking.

    Google Scholar 

  • Mayer, R. C., & Davis, J. H. (1999). The Effect of the Performance Appraisal System on Trust for Management: A Field Quasi-Experiment. Journal of Applied Psychology, 84(1), 123–136.

    Article  Google Scholar 

  • Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An Integrative Model of Organisational Trust. Academy of Management Review, 20(3), 709–734. https://doi.org/10.2307/258792.

    Article  Google Scholar 

  • Mayers, D., & Smith, C. W. (1992). Executive Compensation in the Life Insurance Industry. Journal of Business, 65, 51–74.

    Article  Google Scholar 

  • Medina, C., & Rufín, R. (2015). Transparency Policy and Students’ Satisfaction and Trust. Transforming Government: People, Process and Policy, 9(3), 309–323. https://doi.org/10.1108/TG-07-2014-0027.

    Article  Google Scholar 

  • Mohsin, M. I. A. (2013). Financing Through Cash-Waqf: A Revitalization to Finance Different Needs. International Journal of Islamic and Middle Eastern Finance and Management. https://doi.org/10.1108/IMEFM-08-2013-0094.

    Article  Google Scholar 

  • Morgan, R. (2000). Relationship Marketing and Marketing Strategy: Handbook of Relationship Marketing. London: Sage.

    Google Scholar 

  • Morgan, R., & Hunt, S. D. (1994, July). The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing, 58, 20–38.

    Google Scholar 

  • Mukherjee, A., & Nath, P. (2003). A Model of Trust in Online Relationship Banking. International Journal of Bank Marketing, 21(1), 5–15. https://doi.org/10.1108/02652320310457767.

    Article  Google Scholar 

  • Mukherjee, A., & Nath, P. (2007). Role of Electronic Trust in Online Retailing: A Re-Examination of the Commitment-Trust Theory. European Journal of Marketing, 41(9/10), 1173–1202. https://doi.org/10.1108/03090560710773390.

    Article  Google Scholar 

  • Mustafa, M. O. A., Mohamad, M. H. S., & Adnan, M. A. (2013). Antecedents of Zakat Payers’ Trust in an Emerging Zakat Sector: An Exploratory Study. Journal of Islamic Accounting and Business Research, 4(1), 4–25.

    Article  Google Scholar 

  • Nunnally, J. C., & Nunnaly, J. (1978). Psychometric Theory (2nd ed.). New York: The Free Press.

    Google Scholar 

  • Nurrachmi, R. (2012). The Implication of Cash Waqf in the Society. Al Infaq Islamic Economic Journal, 3(44605), 150–155. Retrieved from http://mpra.ub.uni-muenchen.de/44605/.

  • Pallant, J. (2011). SPSS Survival Manual (4th ed.). Sydney, NSW: Allen and Unwin.

    Google Scholar 

  • Robinson, S. L. (1996). Trust and Breach of the Psychological Contract. Administrative Science Quarterly, 41, 574–599.

    Article  Google Scholar 

  • Rokyah, S. (2005). Determinants of Financial Reporting Practices on Waqf by Malaysian State Islamic Religious Councils. Malaysia: International Islamic University Malaysia.

    Google Scholar 

  • Saifuddin, F. B., Kadibi, S., Polat, R., Fidan, Y., & Kayadibi, O. (2014). The Role of Cash Waqf in Poverty Alleviation: Case of Malaysia.

    Google Scholar 

  • Sargeant, A., & Lee, S. (2004, June). Donor Trust and Relationship Commitment in the U.K. Charity Sector: The Impact on Behavior. Nonprofit and Voluntary Sector Quarterly, 33, 185–202. https://doi.org/10.1177/0899764004263321.

    Article  Google Scholar 

  • Sargeant, A., & Woodliffe, L. (2007). Building Donor Loyalty: The Antecedents and Role of Commitment in the Context of Charity Giving. Journal of Nonprofit & Public Sector Marketing, 18(2), 1–33.

    Article  Google Scholar 

  • Saxton, G. D., Neely, D. G., & Guo, C. (2014). Web Disclosure and the Market for Charitable Contributions. Journal of Accounting and Public Policy, 33(2), 127–144.

    Article  Google Scholar 

  • Seal, W., & Vincent-Jones, P. (1997). Accounting and Trust in the Enabling of Long-Term Relations. Accounting, Auditing & Accountability Journal, 10(3), 406–431.

    Article  Google Scholar 

  • Sekaran, U., & Bougie, R. (2010). Research Methods for Business (5th ed.). West Sussex, UK: Wiley.

    Google Scholar 

  • Shockley-Zalabak, P., Ellis, K., & Winograd, G. (2000). Organizational Trust: What It Means, Why It Matters. Organization Development Journal, 18(4), 35–48.

    Google Scholar 

  • Sinclair, R., Hooper, K., & Ayoub, S. (2013). Perspectives of Accountability in Charities in New Zealand. Journal of Asia-Pacific Business, 14(4), 312–325. https://doi.org/10.1080/10599231.2013.803904.

    Article  Google Scholar 

  • Thoarlim, A., Rahman, M. A., & Yanya, A. (2017). Cash Waqf in Bangladesh and the Need for Innovative Approach Towards Awqāf: Lessons from Selected Countries. International Journal of Academic Research in Business and Social Sciences, 7(4), 151–169.

    Article  Google Scholar 

  • Torres, L., & Pina, V. (2003). Accounting for Accountability and Management in NPOs—A Comparative Study of Four Countries: Canada, the United Kingdom, the USA and Spain. Financial Accountability & Management, 19(3), 265–285.

    Article  Google Scholar 

  • Torres-Moraga, E., Pina, V., Vasques-Parraga, A., & Barra, C. (2010). Antecedents of Donor Trust in an Emerging Charity Sector: The Role of Reputation, Familiarity, Opportunism and Communication. Financial Accountability & Management, 29(3), 265–285. Retrieved from http://www.rtsa.ro/tras/index.php/tras/article/view/109.

  • Trussel, J. M., & Parsons, L. M. (2007). Financial Reporting Factors Affecting Donations to Charitable Organizations. Advances in Accounting, 23, 263–285.

    Article  Google Scholar 

  • Wright, O., & Grace, A. (2011). Trust and Commitment Within Franchise Systems: An Australian and New Zealand Perspective. Asia Pacific Journal of Marketing and Logistics, 23(4), 486–500. https://doi.org/10.1108/13555851111165048.

    Article  Google Scholar 

  • Xiang, X., & Haifeng, D. (2008). A Study on the Charitable Donation Based on the Corporate Governance Characteristics.

    Google Scholar 

  • Yap, B. W., & Khong, K. W. (2006). Examining the Effects of Customer Service Management (CSM) on Perceived Business Performance Via Structural Equation Modelling. Applied Stochastic Models in Business and Industry, 22(5/6), 587–605.

    Article  Google Scholar 

  • Yu, P. L., Balaji, M. S., & Khong, K. W. (2015). Building Trust in Internet Banking: A Trustworthiness Perspective. Industrial Management & Data Systems, 115(2), 235–252. https://doi.org/10.1108/IMDS-09-2014-0262.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Faculty of Business, Communication and Law, INTI International University, Negeri Sembilan, Malaysia

    Rashedul Hasan

  2. Department of Economics and Finance, University of New Orleans, New Orleans, LA, USA

    M. Kabir Hassan

  3. University of Brunei Darrussalam, Bandar Seri Begawan, Brunei

    Mamunur Rashid

Authors
  1. Rashedul Hasan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. M. Kabir Hassan
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Mamunur Rashid
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia

    Khalifa Mohamed Ali

  2. Department of Economics and Finance, University of New Orleans, New Orleans, LA, USA

    M. Kabir Hassan

  3. Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia

    Abd elrahman Elzahi Saaid Ali

Rights and permissions

Reprints and permissions

Copyright information

© 2019 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Hasan, R., Hassan, M.K., Rashid, M. (2019). Mediating Role of Trust in Cash Waqf Donations. In: Ali, K., Hassan, M., Ali, A. (eds) Revitalization of Waqf for Socio-Economic Development, Volume II. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-18449-0_15

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-18449-0_15

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-18448-3

  • Online ISBN: 978-3-030-18449-0

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation