The Financial Analysis of the Ottoman Cash Waqfs

Abstract

From the sixteenth century onwards and along with the increase in the velocity of money, every state diversified its own financial sources. During the related centuries, the Ottoman state created the “cash waqfs”, an outcome of local settlement, out of its trust institution as an alternative financial source. Cash waqf is the sort of foundation in which the money devoted by persons is managed through the profit/usury rates determined by the state so that the necessary charities are performed. The process can be summarized as the transfer of the total remaining amount into charity services (the primary objective) after the removal of foundation expenses from the incomes of the funds that were made use of as credit.

In endowments, treated as the deeds of foundations, the information regarding how the foundation will be operated and where its revenues will be used is recorded with all its details. Endowments are organized by foundations that are administered by trustees. The arranged section is intended for explaining the functioning of cash waqfs through the financial terms of our present day based on the details involved in endowments. Within this framework, the decisions made by foundations in preparing their endowments with close attention to the economic situations of the related period are associated with such concepts like financial management strategy, trustees’ use of instruments like bonds and bills in evaluating the funds and cash management. Besides, the cash waqfs gathered in funds are addressed in relation to fund management, while the sureties and the pledged assets received during the credit phase are discussed within risk management.