The Socio-Economic Impacts of Waqf Investment Funds as a Model for Sustainable Financing in Saudi Arabia

Abstract

Waqf investment funds represent an innovative approach to sustainable finance, integrating Islamic investment principles with contemporary social and economic goals. The research explores how Waqf investment funds affect socio-economic factors in Saudi Arabia through their influence on personal income, healthcare systems, and education while analyzing financial sustainability. The study assessed primary socio-economic indicators through beneficiary survey data, expert interviews, and secondary sources. The study used chi-square tests, exploratory factor analysis (EFA), and regression analysis to evaluate the long-term impact of the funds on social welfare and economic stability. The results highlight several significant achievements, the most important of which is that personal income benefited most from enhanced purchasing power. At the same time, healthcare outcomes improved significantly due to support for chronic disease treatments. Support for student housing and living services positively impacted the education sector by providing learning stability and access to educational opportunities. Financial sustainability reached its peak through improved financial security measures. The full potential of Waqf investment funds remains restricted because they face continuous issues with investment diversification, governance effectiveness, and entrepreneurial support. The results show that Waqf investment funds work as a welfare tool while also serving as a strategic tool for sustainable development in line with Saudi Vision 2030 and the United Nations Sustainable Development Goals.

1. Introduction

As a key tool for social and economic advancement, Waqf has been essential to Islamic finance. In the past, Waqf provided vital services at little or no cost to meet a range of societal needs, such as social welfare, healthcare, and education. Waqf plays an important role in sustainable development projects in Saudi Arabia and is firmly ingrained in the nation’s cultural and religious framework [1,2]. As financial markets have developed, Waqf investment funds have become cutting-edge tools combining Islamic financial principles with modern social and economic advancement objectives.

The main social goal of modern Waqf investment funds is to encourage an innovative and ambitious community, similar to the historical concept of Waqf. Within Islamic communities, Waqf fulfills various social obligations, including social housing, business ventures, educational institutions, and other charitable endeavors. By increasing access to these services at little or no cost, these programs significantly impact the communities in which they are implemented.

In order to promote cumulative Waqf activities that align with end users’ issues, Waqf investment funds generate sustainable financial resources. This approach reflects Waqf’s traditional utilization paradigm, which has been seen to have declined in modern times. By providing funding for essential services like housing, healthcare, and education, these programs help to reduce poverty and maintain social stability [3]. Waqf projects run by Waqf investment funds have several contemporary benefits, such as facilitating wealth transfer between generations, reducing poverty, and boosting social stability and security.

The societal benefit generated by Waqf funds, functioning inside a commercial framework, exhibits considerable credibility compared with alternative faith-based impact investing approaches. These investment instruments seek to produce enduring, sustainable profits while delivering social advantages across several themes. Rooted in fundamental Sharia principles and aligned with the United Nations Sustainable Development Goals [4], the dual objectives focus on creating specialized investment opportunities that integrate social and financial outcomes. This method facilitates the creation of a comprehensive portfolio of prospective investment targets that align with larger market benchmarks on an equivalent risk/return framework.

Waqf institutions in Saudi Arabia play a vital role in advancing social welfare by supporting education, healthcare, and poverty alleviation, which is in line with the objectives of Vision 2030. Rooted in Islamic tradition, these endowments are being revitalized through enhanced governance and strategic investment to meet modern socio-economic needs [5]. In healthcare, Waqf supports hospitals, medical services, and infrastructure [6] while aiding orphans and marginalized groups [5]. Saudi Arabia established the General Authority of Awqaf in 2015 to modernize the Waqf, which oversees regulatory frameworks and innovative Waqf structures. In June 2018, it introduced licensing instructions for Waqf investment funds to ensure financial sustainability and enhance socio-economic contributions [7]. By 2024, the net assets of licensed Waqf investment funds exceeded one billion riyals (USD 266 million), up from 500 million in 2023. Five new funds, totaling 34 (27 public and seven private), drove this increase. These funds are integral to the Authority’s plan for regulating and advancing the endowment sector under Saudi Vision 2030. The sector grew by 29.3%, with an average annual increase of 13.9%, reflecting regulatory efforts to expand Waqf investments [8].

Although Waqf institutions have been in Saudi Arabia for a long time, their potential as a sustainable financing model has not been fully explored. Earlier research has mostly concentrated on traditional Waqf applications, ignoring the impact of Waqf investment funds in important areas like health, education, and financial sustainability. Additionally, the socio-economic contributions of these funds in attaining Vision 2030 goals, specifically in boosting personal income and financial resilience, have not been thoroughly evaluated. This study explores the transformative role of Waqf investment funds in promoting sustainable economic growth and social welfare. The primary research question for the study is “How do Waqf investment funds contribute to socio-economic development in Saudi Arabia, particularly in enhancing personal income, healthcare accessibility, education, and sustainable finance?”

Although various studies have highlighted the role of Waqf in social and economic contexts, there is limited empirical study on the performance and impact of Waqf investment funds, particularly in Saudi Arabia. The existing literature does not systematically evaluate the contributions of these funds to personal income growth, healthcare accessibility, and educational advancements. Additionally, challenges such as governance inefficiencies, lack of transparency, and limited public participation hinder the full realization of Waqf’s potential as a sustainable financial tool. This study uniquely contributes to the Islamic finance literature by integrating Islamic finance theories with empirical analyses of Waqf investment funds in Saudi Arabia. Previous literature lacks a systematic assessment of these funds’ socio-economic impacts. Our study addresses this gap by empirically evaluating their effects on personal income, healthcare access, education, and financial sustainability, providing clear practical implications and policy recommendations. By evaluating the socio-economic benefits of Waqf investment funds, the study offers critical guidance for policymakers, financial institutions, and stakeholders in the nonprofit sector. Furthermore, the study’s recommendations will help optimize the management and strategic deployment of Waqf resources, ensuring long-term sustainability and broader socio-economic impact. The subsequent sections of this study are structured as follows: Section 2 reviews the study on the socio-economic impacts of Waqf investment. Section 3 delineates the methodology. Section 4 presents empirical findings. Section 5 discusses the results. Section 6 provides conclusions and policy recommendations, while Section 7 highlights the study’s limitations and future research directions.

2. Literature Review

Several important economic, financial, and social growth theories form the theoretical basis of Waqf investment funds. To ensure that Waqf funds function in a socially acceptable manner while fostering financial inclusion and poverty alleviation, Islamic Finance Theory and Maqasid al-Shariah place a strong emphasis on ethical investing, risk-sharing, and wealth distribution [9]. Social finance and responsible investment theory highlight the convergence of philanthropy and investing techniques, which enables Waqf funds to prioritize community welfare, healthcare, and education while producing financial returns [10]. By promoting diversified investments in Sharia-compliant financial products, including Sukuk, real estate, and equity funds, portfolio theory promotes financial sustainability by guaranteeing steady returns while upholding the fund’s altruistic goals [11]. By giving underprivileged communities financial access and supporting entrepreneurship, Waqf funds help alleviate socio-economic inequities, according to the Economic Development and Financial Inclusion Theory [12]. These ideas work together to build Waqf investment funds as a sustainable financing mechanism that promotes long-term economic resilience and sustainable development by striking a balance between social benefit and financial stability.

2.1. The Waqf Landscape in Saudi Arabia

Saudi Arabia possesses one of the world’s most extensive Waqf systems, supported by a centralized regulatory authority and integrated with Vision 2030 reforms [5]. For comparison, Indonesia manages over 430,000 Waqf land assets valued at more than USD 60 billion, Turkey’s Directorate General of Foundations oversees thousands of properties with an estimated value exceeding USD 15 billion, and Malaysia’s Waqf assets are managed at the state level with growing involvement in infrastructure and education, amounting to several billion Malaysian Ringgit. This system is crucial in supporting charity, education, and healthcare, aligning with Vision 2030’s goal of increasing the nonprofit sector’s GDP contribution to 5% [13]. The 34 Waqf Investment Funds in Saudi Arabia advance sustainable development and financial stability. Of these, 23 focus on economic-social support, aiding marginalized groups, orphan care, and economic resilience through asset growth [14]. Five health-focused funds enhance medical infrastructure and accessibility, particularly for underserved communities, with initiatives like Alinma Wareef and Alinma Enayah improving healthcare services, while six educational funds support scholarships, research, and university development, fostering knowledge and innovation. These funds uphold Islamic financial principles while driving economic and social progress, reinforcing Saudi Arabia’s leadership in Waqf-based sustainable development.

Table 1. Saudi Arabia’s Waqf Investment Funds.

Activity	Fund	Asset Value (SAR)	%	Major Objectives
Health	Alinma Wareef (2018), Alinmaa Alinayah (2019), Healthcare (2022), Al Shifa Healthcare (2023), and Healthcare Associations (2023).	178,475,457	16%	It supports healthcare through asset development, promoting solidarity while enhancing the role of endowments in establishing medical projects and facilities. Moreover, it provides health services and insurance and improves rehabilitation and healthcare infrastructure.
Economic-Social	Alinmaa Orphan Care (2019). Insan (2019), Bir Alriyadh (2020), Alkhabeer (2020), Eastern Province Associations (2023), Takaful (2023), Nafaqah (2019), Alinma Road’s Mosques (2020), Ikram (2022), Daawah (2023), Guests of Allah (2023), Saqia Associations (2024), Autism Associations (2023), Al-Rajhi (2024), Al-Ahli Ihsan (2024), Mawaddah (2022), Alinma (2024), Algassim (2024), Diriyah (2025), Eskan Charities (2025), Quran Associations (2023), Orphan Associations (2023), and Tarahum (2023).	792,810,330	72%	Supporting orphans, needy families, and vulnerable groups by developing their assets, providing care, rehabilitation, and financial aid. Besides funding and services for inmates, released individuals, and their families.
Educational	Al-Ahli and King Saud University (2021). King Faisal University (2023), Islamic University Madinah (2023), King Khalid University (2024), Taibah, Kingge (2023), and Prince Muqrin University (2023).	118,004,724	11%	Promoting sustainable development, supporting universities through asset growth and investment, advancing knowledge and prophetic values, and funding scholarships, research, and educational projects.

reveals that Waqf investment funds increased their total assets to SAR 1,089,290,511 by 2024. Socio-economic programs account for most assets as the primary means to assist vulnerable populations and drive community development projects. Healthcare funds, which hold the second-largest share of investments, receive support from medical infrastructure development and service improvement. The smallest percentage of the Waqf investment funds goes to educational initiatives because they mostly started recently. The education sector demonstrates significant growth potential because public awareness expands and educational investments increase.

2.2. Waqf Investment Funds and Personal Income

Scholars and economists must closely examine the economic dimensions of the Waqf institution since it possesses considerable potential to impact the economic landscape of the Muslim community. Trends concerning Awqaf indicated that it substantially affected the socio-economic advancement of Muslim communities [15]. Additionally, the role of Waqf in socio-economic finance was investigated, demonstrating that Waqf institutions significantly contributed to poverty alleviation and wealth distribution, thereby enhancing social well-being in Muslim cultures [16]. It was recommended that Waqf institutions be reintegrated into the economic framework.

In order to establish effective welfare services for the community, [17] examined the importance of putting forward ideas to revitalize the Waqf institution, highlighting the need to integrate modern techniques into the Waqf system. The study emphasized Waqf’s significant impact on civil society and socio-economic development, highlighting its potential as a major provider of public goods in contemporary nations and the need for creative ways to increase its effectiveness and societal impact. With a focus on public welfare [18], it investigates how Waqf al-nuqud (cash Waqf) evolved into electronic Waqf (E-Waqf). Act No. 41 of 2004’s integration of cash Waqf within the Republic of Indonesia’s legal framework presents a creative and promising way for Indonesian Muslims to manage and grow a sizable resource base effectively. As a result, they can alleviate poverty and enhance Muslims’ financial security, which enhances society’s general well-being.

A substantial corpus of qualitative studies underscores the transformative impact of Waqf on socio-economic development. Ref. [19] performed a comparative analysis across regions, demonstrating that MENAP countries emphasize Cash Waqf and microfinance. The Gulf states utilize Waqf for investments in financial instruments, demonstrating regional adaptation. Qualitative studies highlight the potential of Waqf for commercial uses, as evidenced by [20], who advocated for an integrated management approach involving governments and banks to augment Waqf’s socio-economic contributions.

Waqf investment funds enhance socio-economic stability by advancing public welfare and diminishing dependence on government assistance, as asserted by [21]. Similarly, Waqf-based funding solutions for renewable energy in Turkey facilitate sustainable development and green economy objectives, as noted by [22]. A study by [7] discovered that public engagement in Waqf investment funds in Saudi Arabia broadened Waqf’s breadth and stimulated individual participation, promoting solidarity and societal advancement.

Further evidence highlights the revolutionary potential of Waqf investment funds in addressing socio-economic challenges. A study by [23] demonstrated how Waqf investment improved society’s welfare by integrating Islamic commercial and social funding. Their study linked the beneficiaries’ financial success to general Islamic values, such as unwavering almsgiving, fraternity, and social harmony. Similarly, [24] investigated the social role of Islamic investment funds in Egypt, emphasizing their capacity to boost profitability, assist communities, and offer significant benefits to individuals and markets.

There are examples of creative uses of Waqf in a variety of situations. Malaysian Waqf funds implemented venture capital concepts, promoting innovation and corporate expansion as acknowledged by [25]. The combination of microfinance and Waqf in Nigeria was studied by [26], who showed how it improved personal income and financial inclusion, particularly in rural and underserved areas. The impact of Waqf-featured unit trust funds in Malaysia was highlighted by [27], who noted that these funds increase philanthropic contributions, boost personal income, and indirectly promote economic growth.

The significance of Waqf in stabilizing income during economic crises has been acknowledged. The potential of Waqf to mitigate Indonesia’s economic issues reveals its ability to enhance welfare and individual income stability [28]. Similarly, Ref. [29] discovered that the stock Waqf in Indonesia upholds Islamic economic principles, augments personal income, and alleviates poverty. Moreover, Waqf substantially advanced Indonesia’s development by cultivating human and social capital, improving welfare, and encouraging solidarity, as noted by [30]. Studies show that Waqf can enhance personal income, but its effectiveness varies across contexts. A study, Ref. [31], highlighted how Nigeria’s legal framework shapes Waqf’s economic role, emphasizing the need for institutional support. Similarly, Ref. [32] argued that successful Waqf initiatives depend on integration with modern financial tools and transparent governance. These differences suggest that legal and operational contexts are key to Waqf’s impact.

H1. 

There is a significant causal relationship between Waqf Investment funds and Personal income.

2.3. Waqf Investment Funds and Healthcare Delivery

Numerous research studies have investigated the application of Waqf in healthcare, offering comprehensive insights into its societal effects. The Hamdard Health Waqf model in South Asia allocates 85% of its income to healthcare services and humanitarian efforts [33]. This methodology illustrates how a strategically designed and socially oriented Waqf model can enhance healthcare accessibility for marginalized communities. New techniques in which Waqf investment organizations facilitate healthcare for the impoverished via dual-purpose facilities, integrating commercial services with subsidized care to provide fair healthcare delivery while preserving financial sustainability [34]. In addition, Ref. [35] emphasized the importance of governance frameworks tailored for Waqf hospitals. Their qualitative study highlighted four key components: decentralized management, good governance practices, Mudharabah-based partnerships, and Sharia compliance.

The principal themes of revitalizing Waqf in the healthcare sector are personnel management, financial issues, teamwork and organization, legal considerations, insufficient primary healthcare services, information technology and digital transformation, accountability and sustainability, and physical infrastructure [36].

The proposed solutions encompass the initiation of a capacity-building program (CBP), the establishment of a hybrid Waqf model, the improvement of significant data connectivity, the creation of a dedicated legal framework, and the reallocation of resources to the healthcare sector before and after the global health crisis. Certain studies examined the significance of Waqf in bolstering the healthcare sector during and after the COVID-19 epidemic [37,38]. The underutilized potential of Waqf in providing healthcare services highlights the necessity of leveraging these resources to improve the well-being of persons living in refugee camps in Nigeria [39].

Waqf investment funds substantially enhance healthcare delivery through several means, including conversion foundations and novel funding strategies. Healthcare conversion foundations (CFs), recognized through hospital sales, have allocated more than USD 382 million to community health projects, demonstrating their influence on population health [40]. Furthermore, Healthcare Exchange-Traded Funds positively correlate with the Dow Jones Healthcare sector and the S&P 500 Index, although they offer no diversification benefits for US investors [41]. Moreover, the study by [42] revealed that healthcare Waqf substantially enhanced Malaysia’s healthcare system through efforts such as dialysis centers, medical equipment, pharmaceuticals, and COVID-19 treatment. However, further enhancement of public healthcare financing necessitates strategically allocating and administering Waqf monies. A study by [43] indicated that capital Waqf positively affects healthcare. Productive Waqf and innovative initiatives, such as higher education institutions or hospitals, facilitate sustainable growth [44]. Thus, the following hypothesis was proposed to examine the causal relationships between Waqf investment funds and improved access to healthcare:

H2. 

There is a significant causal relationship between Waqf Investment funds and improved access to healthcare.

2.4. Waqf Investment Fund and Education

The connection between Waqf investment money and education has been fundamental to Islamic philanthropy, traditionally acting as a primary financial resource for educational projects. The role of Waqf in addressing educational needs is still pertinent today, adapting to the demands of contemporary education systems. [45] underscored the significance of Waqf in bolstering higher education institutions (HEIs) as an ancillary financial source, facilitating academic and educational initiatives. Similarly, [46] associated Waqf with the Sustainable Development Goals (SDGs), precisely Goal 4, which underscores the importance of quality education. The study, utilizing primary data collected from experts, determined that the social aspect of Waqf achieved the highest ranking within the SDG framework, with an average score of 8.07.

Qualitative research underscores the historical and contemporary importance of Waqf investment money in education. A study [47] examining the development of Waqf in five Asian and African nations demonstrated its reliance on cultural and political backing for revitalization. This adaptation to socio-political conditions highlights Waqf’s potential in various environments. Additionally, Ref. [48] illustrated that values-based education and human Waqf projects in Indonesia might exemplify modern educational systems, highlighting the necessity of internal controls to avert mismanagement and guarantee sustainability.

Waqf investment funds are essential for higher education and societal well-being. Malaysian universities, including IIUM and UKM, utilize Waqf for scholarships, infrastructure, and research, integrating traditional and contemporary fundraising techniques [49]. The strategic management of these endowments improves quality assurance by tackling resource allocation issues and ensuring ethical distribution. International case studies highlight the significance of Waqf in facilitating fair educational access while adhering to changing quality requirements [50].

The efficacy of cash Waqf programs executed by Bank Muamalat Malaysia Berhad (BMMB) in promoting better education in Malaysia [51]. Likewise [52], compared worldwide endowment funds, emphasizing their roles, structures, and legal frameworks. The study emphasizes exemplary techniques from prestigious institutions such as Harvard and Stanford, where strategic management and diversified investments provide consistent support for education.

The scientific endowment model at King Fahd University of Petroleum and Minerals (KFUPM) in Saudi Arabia exemplifies the sustainable financing of higher education and study through endowment funds. The KFUPM Endowment Fund Office (EFO) solicits, administers, and invests resources to facilitate education, research, and student enrichment initiatives [53]. Thus, this study hypothesized the following:

H3. 

There is a significant causal relationship between Waqf Investment funds and education services.

2.5. Waqf Investment Funds as a Sustainable Finance Model

The Waqf system has been successfully incorporated into Saudi Arabia’s financial structure as a paradigm of sustainable finance, evidenced by the establishment of Waqf investment funds and compliance with Shariah rules. These efforts fund sustainability-oriented programs, tackling climate change and education issues through innovative financial mechanisms, including energy Waqf and Waqf–Sukuk [5]. These technologies facilitate social and environmental initiatives, demonstrating Waqf’s capacity to produce social advantages while maintaining sustainable financial practices. Research conducted by [54] corroborates the congruence of the United Nations Sustainable Development Goals (SDGs) with Islamic social finance (ISF), emphasizing Waqf’s pivotal role in realizing these objectives, especially in Muslim-majority countries.

A qualitative study offers further insights into the applicability of Waqf as a sustainable finance paradigm. The socio-economic advantages of allocating Waqf funding to initiatives with substantial social returns, such as renewable energy and community healthcare [55]. Their findings underscore that innovative governance techniques, such as stakeholder involvement and openness, improve Waqf’s alignment with sustainability goals. A study by [56] examined green financing initiatives implemented by Awqaf institutions, illustrating the harmonious incorporation of environmental sustainability into conventional Waqf structures.

The amalgamation of Waqf with various Islamic financial instruments has been extensively examined [57,58]. Waqf–Sukuk is a hybrid financial model that integrates traditional endowment practices with modern financial requirements. These methods have demonstrated the capacity to improve sustainable financing by mitigating infrastructure deficiencies and alleviating inequality in marginalized communities. Governance in these projects is crucial for their success, as accountability and effective resource allocation are crucial [59].

Waqf investment funds play a crucial role in sustainable development by funding education, healthcare, and economic initiatives. They advocate for poverty alleviation, asset preservation, and enduring financial stability, endorsing the deliberate implementation of Waqf models globally to enhance social and economic resilience [60]. In Saudi Arabia, these funds serve as foundations of social solidarity and instruments for rectifying income distribution disparities and promoting sustainable societal development [61]. The Human Association Fund in Saudi Arabia exemplifies the combined effects of financial sustainability and social benefit via varied investments and expert administration. The fund’s 60% growth since inception underscores its effectiveness, accompanied by suggestions for additional expansion and implementing technical platforms for governance and performance evaluation [21].

Advocate for a Waqf-owned financial intermediary (WOFI) as an equity-based substitute for traditional loan financing, specifically for solar energy initiatives [22]. Using agent-based modeling, the study determined that WOFI mitigates wealth disparity, aggregates capital for extensive projects, and advances sustainable development objectives by fostering economic growth and environmentally sustainable efforts.

Waqf investment funds are essential for promoting economic development and strengthening social unity. By financing community-specific projects, including environmental initiatives and social services, they demonstrate the potential of Islamic endowments to advance broader development objectives [62]. Hence, this study hypothesized the following:

H4. 

There is a significant causal relationship between Waqf Investment funds and sustainable finance.

Although much of the existing literature on Waqf focuses on contexts such as Southeast Asia, Sub-Saharan Africa, and South Asia, the Saudi Arabian context presents unique institutional and policy characteristics. Unlike many other countries, Saudi Arabia has a centralized governance model for Waqf, with strong state oversight and active policy support under initiatives like Vision 2030, which explicitly prioritizes the revitalization of the Waqf sector. Additionally, the integration of Waqf into national development goals and its alignment with Islamic social finance principles receive considerable institutional backing. These distinct features mean that findings from other regions may not be directly applicable to Saudi Arabia. Therefore, a focused, context-specific analysis is essential to understand the actual role and potential of Waqf investment funds within the Kingdom’s socio-economic development framework.

This literature review explicitly links Islamic finance and sustainable development theories to the empirical analysis conducted in the current study. Unlike previous research, which often examines these concepts separately, this study uniquely integrates theoretical insights into an empirical assessment of Waqf investment funds. A significant gap remains, as comprehensive studies evaluating Waqf investment funds as sustainable financing models, particularly in Saudi Arabia, are scarce. Prior studies frequently address individual socio-economic aspects, such as healthcare or education, without integrating multiple dimensions or adequately addressing operational challenges like governance, public participation, and entrepreneurial support. Additionally, previous research typically generalizes findings across Muslim-majority countries, neglecting Saudi Arabia’s distinctive socio-economic and cultural context. This study expands the existing literature by addressing these gaps and demonstrating how theoretical frameworks inform practical findings and policy recommendations regarding personal income, healthcare accessibility, education, and financial sustainability.

3. Methodology

This study integrated quantitative and qualitative techniques to comprehensively assess the socio-economic impact of Waqf investment funds in Saudi Arabia. Quantitative data, collected through surveys and analyzed using statistical modeling, provide measurable insights into financial, social, and developmental outcomes, specifically in healthcare, education, personal income, and financial sustainability. Qualitative insights gathered through expert interviews and document analysis add context and depth by exploring governance challenges, regulatory frameworks, and prospects. Secondary data are also incorporated to support triangulation and enhance the validity of the findings. This integrative methodology is particularly well-suited to Waqf, which operates at the intersection of financial, social, and institutional domains and aligns closely with the objectives of Saudi Vision 2030 and the United Nations Sustainable Development Goals (SDGs).

3.1. Data Collection

3.1.1. Primary Data

Primary data were collected through structured surveys and semi-structured interviews:

• Survey Sample: 346 (out of 384) respondents were surveyed, representing beneficiaries of Waqf investment funds across different socio-economic categories (economic-social, health, education);
• Interview Participants: Five in-depth interviews were conducted with Waqf fund managers, policymakers, and experts in Islamic finance to gain qualitative insights into governance, investment strategies, and operational challenges.

3.1.2. Secondary Data

Secondary data sources included:

• Reports from the General Authority of Awqaf on Waqf investment trends and financial performance;
• Government publications related to Saudi Vision 2030 and Islamic finance;
• Academic literature on Waqf investment models, sustainable finance, and impact assessment methodologies.

3.1.3. Population and Sampling Strategy

The research population includes stakeholders in or affected by Waqf investment activities in Saudi Arabia, such as beneficiaries, fund managers, and regulatory officials. The targeted sample consisted of individuals with direct knowledge or experience of Waqf operations, ensuring relevance and depth in responses.

The study used stratified random sampling to ensure a representative sample of Waqf beneficiaries, categorized as follows:

• Economic-Social Funds (67%)—Supporting orphans, low-income families, and vulnerable groups;
• Health Funds (15%)—Providing healthcare services, chronic disease support, and medical infrastructure;
• Educational Funds (18%)—Supporting scholarships, higher education, and academic study.

The percentages are derived from calculating funds in each category compared to the total Waqf investment funds. The method guarantees that every important sector receives representation in proportion to its number of funds.

The sample was drawn using stratified random sampling to ensure representation across all fund categories. The sample size was determined using the Steven K. Thompson formula [63] due to its suitability for estimating proportions in finite populations, primarily when population size and variance are known or estimated. This approach was selected over alternatives like Cochran’s formula due to its flexibility in adjusting for different confidence levels and margins of error. Thus, the minimal sample size was calculated for this study of 384 beneficiaries.

The employed formula is the following:

$$n={\displaystyle \frac{z^2·p·(1-p)}{E^2}},$$

where the following is true:

• n: Sample size;
• z: Standard value corresponding to a 95% confidence level = 1.96;
• p: Estimated proportion of the population (e.g., 0.5 for maximum variability);
• E: Margin of error (0.05).

Substituting into the formula:

$$n={\displaystyle \frac{{1.96}^2·0.50·(1-0.5)}{{0.05}^2}}\approx 384$$

The adjusted sample size is approximately 384. This sample size ensures a 95% confidence level with a 5% margin of error.

The questionnaire was developed based on an extensive review of the relevant literature and the study’s theoretical framework, which integrates concepts from Islamic finance, sustainable development, and Waqf-based economic models. Survey items were adapted from prior empirical studies that examined Waqf’s impact on variables such as personal income, education, healthcare access, and financial security. Additionally, theoretical discussions on institutional effectiveness in Islamic finance informed constructs related to governance and regulatory factors. This alignment between theory, literature, and measurement enhances the instrument’s content validity and ensures that each item reflects a specific aspect of the study’s research objectives.

3.1.4. Respondent Profile Data

A summary of respondents’ demographics, such as age, gender, education level, occupation, and involvement in Waqf-related activities, has been added in

Table 2. Response rate.

Targeted Category	Distributed	Received	Rejected	Usable	Response Rate (%)
384	390	346	Nil	346	88.7%

to provide context for interpreting the survey findings.

Table 2 summarizes the survey response rate, showing distributed surveys, received responses, rejected responses, and usable responses, along with the overall response rate percentage, reflecting engagement and data collection efficiency. Although the intended sample size was 384, the study achieved 346 valid responses, representing an 88.7% response rate. While this is statistically acceptable, the potential for minor sample bias is acknowledged and considered when interpreting the findings.

3.2. Data Analysis

3.2.1. Quantitative Analysis

• Exploratory Factor Analysis (EFA): Used to identify key impact dimensions of Waqf investment funds;
• Chi-Square Tests: Applied to assess the statistical significance of socio-economic impacts;
• Linear Regression: Conducted to analyze causal relationships between Waqf investment funds and economic indicators such as personal income, education, healthcare, and financial sustainability.

3.2.2. Qualitative Analysis

• Thematic Analysis: Used to analyze interview data and identify governance challenges, policy gaps, and investment strategies [64];
• Content Analysis: Applied to official reports and scholarly publications to assess regulatory frameworks and policy alignment with Saudi Vision 2030.

The statistical tests were selected based on the data’s structure and the study’s objectives. Descriptive statistics were used to summarize demographic and response trends. Correlation and regression analyses were applied to examine causal relationships between Waqf investment funds and socio-economic indicators, aligning with the study’s hypotheses. These methods are appropriate for identifying the strength and significance of relationships in survey-based social research. For qualitative data from interviews, thematic analysis was used to extract key insights and patterns related to fund effectiveness and governance.

3.3. Study Instrument

The study team designed a questionnaire as the primary instrument, reviewing previous studies to ensure it aligned with the study’s variables. The Likert Scale was used as a measurement tool. A 5-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree), was used for the survey to capture respondents’ perceptions with appropriate sensitivity and ease of interpretation.

The questionnaire was structured into four main sections: Part One includes questions about personal income, Part Two is related to education, Part Three is about health, and Part Four is about sustainable finance.

This study utilized Python and Excel (version 2021) as essential tools for data analysis to ensure accuracy, efficiency, and reproducibility in the methodological process. Python (version 3.10) was employed for advanced statistical analysis, including exploratory factor analysis (EFA), regression modeling, and hypothesis testing, leveraging its robust libraries such as Pandas, NumPy, and Stats models. Excel complemented the analysis by handling data cleaning, organizing large datasets, and performing descriptive statistical calculations. The integration of these tools allowed for a comprehensive and systematic approach to data analysis, ensuring that the findings were both reliable and presented in a user-friendly manner.

3.4. Validity and Reliability of the Study

3.4.1. Validity

The questionnaire was presented to a group of experts and specialists for their feedback regarding the appropriateness of the items about the content and the adequacy of the study instrument in terms of the number of items, comprehensiveness, diversity of content, and the quality of linguistic formulation. The experts’ comments and suggestions were carefully reviewed, and adjustments were made based on their recommendations and opinions. Examples of these adjustments include the following:

• Deleting and adding specific questions across various parts.
• Rephrasing some items to make them clearer and less ambiguous;
• Rearranging the questions to ensure better sequence and logical flow;
• Reducing the size of the final questionnaire questions.

3.4.2. Reliability

Before proceeding with the analysis, it is crucial to evaluate the reliability of the data. Reliability is often assessed using Cronbach’s Alpha, a statistical measure that evaluates the internal consistency of survey or test items. In simple terms, Cronbach’s Alpha assesses how well the items in a questionnaire are related, determining whether they effectively measure the same underlying construct.

This study calculated Cronbach’s Alpha value as 0.898, indicating high internal consistency among the items. A value of 0.9 suggests that the survey items are well-correlated, reflecting strong measurement reliability. This high level of reliability supports the validity of the study’s findings and enhances confidence in the consistency of the responses.

However, expert review may be subject to bias or limitations in scope and thus cannot fully guarantee construct validity. To mitigate this, the questionnaire items were cross-referenced with the existing literature and theory. For qualitative data, validity was addressed through the use of a semi-structured interview guide informed by the research objectives and theoretical framework. Triangulation with survey and document data, along with respondent validation (member checking), helped to confirm the credibility of the interview findings. These steps were taken to enhance both the internal consistency and overall trustworthiness of the study’s design.

As shown in Figure 1, the study follows a structured approach that combines quantitative and qualitative data collection and analysis systems.

4. Results

4.1. Descriptive Statistics

Table 3. Characteristics of the respondents (n = 346).

	Demographic Characteristics	Frequency	Percent
Age	Under 18	61	18%
	18–40	184	53%
	41–60	93	27%
	61 & above	8	2%
Gender	Male	190	55%
	Female	156	45%
Marital Status	Single	54	16%
	Married	145	43%
	Divorced	36	10%
	Widowed	102	29%
	Separated (not due to divorce)	6	2%
Education Level	High school or less	41	12%
	High School Diploma	164	47%
	Bachelor’s degree	115	33%
	Postgraduate	26	8%
Residence status	Owned	73	21%
	Rented	136	39%
	family’s property	123	36%
	friend’s property	14	4%
Health Status	No chronic health conditions	199	58%
	Chronic health conditions present	147	42%
Employment Status:	Employed	131	38%
	Unemployed	118	34%
	Student	71	21%
	Retired	26	8%
Number of Household Members	Less than 3	102	30%
	3–6	208	60%
	More than 6	36	10%

provides valuable insights into the characteristics of the respondents involved who fall within the 18–40 age range (53%), followed by those aged 41–60 (27%). The elderly population (61 years and above) represents only 2%, highlighting a predominantly younger demographic. Gender distribution is relatively balanced, with a slight majority of males (55%) compared with females (45%).

Regarding marital status, 43% of the respondents are married, while a notable 29% are widowed, more than those who are single (16%) or divorced (10%). Regarding education, most respondents hold either a high school diploma (47%) or a bachelor’s degree (33%), indicating a moderately educated population.

Housing status shows that 39% of respondents live in rented accommodation, 36% reside in family-owned properties, and 21% own their property. Notably, 42% of respondents report having chronic health conditions, suggesting a significant healthcare concern within the population.

Employment data reveal that 38% of respondents are employed, while unemployment is 34%, and students account for 21%. The high unemployment rate indicates potential economic challenges. Household size data suggest a preference for smaller families, with 60% of households comprising 3–6 members and only 10% having more than six members.

The sample’s demographic characteristics suggest that certain groups may be more likely to access or benefit from Waqf investment funds. For instance, the relatively high proportion of respondents with tertiary education and stable income levels may indicate that better-informed or economically stable individuals are more engaged with Waqf programs. Additionally, urban respondents were overrepresented, which may reflect the concentration of Waqf institutions and services in major cities. These patterns suggest potential disparities in awareness and access, highlighting the importance of expanding outreach and tailoring Waqf programs to more effectively reach underserved rural and low-income populations.

Overall, the findings depict a moderately young population with balanced gender representation, notable health and economic challenges, and a relatively high level of education.

4.2. The Exploratory Factor Analysis (EFA)

The exploratory factor analysis (EFA) identified four key factors explaining Waqf investment funds’ social and economic impacts, focusing on Per Capita Personal Income, Education, Health, and Financial Sustainability. These factors account for 43.134% of the total variance, with the first factor emerging as dominant (eigenvalues > 1). The first factor, with an eigenvalue of 5.000, explains 28.36% of the variance, reflecting a significant influence on the primary dimension, likely tied to financial sustainability. The subsequent factors, with eigenvalues of 1.476, 1.193, and 1.184, account for 5.66%, 4.57%, and 4.54%, respectively, capturing the dimensions related to education, health, and income growth.

After rotation, the variance distribution became more interpretable, with the first factor contributing 72.63%, while the second, third, and fourth factors added 10.54%, 8.65%, and 8.18%, respectively. This redistribution highlights a balanced multi-dimensional impact, ensuring each factor’s contribution is well defined and significant (See

Table 4. Factor analysis of the components of the constructs.

Initial Eigenvalues				Rotation Sums of Squared Loadings
Component	Total	% of Variance	Cumulative (%)	Total	% of Variance	Cumulative (%)
1	5.000	28.360	28.360	2.914	72.628	72.628
2	1.476	5.662	34.022	0.423	10.542	83.170
3	1.193	4.573	38.595	0.347	8.649	91.819
4	1.184	4.539	43.134	0.328	8.181	100.000
5	1.067	4.094	47.228
6	1.040	3.989	51.217
7	0.979	3.753	54.970
8	0.944	3.619	58.589
9	0.917	3.516	62.105
10	0.844	3.235	65.340
11	0.771	2.957	68.297
12	0.746	2.861	71.159
13	0.710	2.724	73.883
14	0.697	2.674	76.557
15	0.641	2.459	79.017
16	0.623	2.389	81.405
17	0.607	2.329	83.734
18	0.563	2.157	85.892
19	0.554	2.123	88.015
20	0.536	2.057	90.072
21	0.488	1.872	91.944
22	0.467	1.790	93.734
23	0.437	1.675	95.409
24	0.426	1.632	97.041
25	0.418	1.602	98.644
26	0.354	1.356	100.000

).

The results presented in

Table 5. Rotated components of factors related to Waqf investment funds.

Constructs Items	F1	F2	F3	F4	F5
My income increased due to the support provided by the Waqf investment funds	0.55	−0.09	0.19	0.22	−0.31
My standard of living has improved	0.55	−0.17	0.03	0.10	−0.22
I have been able to save	0.50	0.03	−0.26	0.14	−0.06
Enable me to have access to additional income sources	0.50	0.21	−0.08	−0.04	−0.10
I have been able to invest	0.48	−0.04	−0.17	0.01	−0.17
Public services such as electricity and water have improved	0.57	0.08	−0.05	−0.10	−0.08
My purchasing power has improved after receiving support from Waqf investment funds	0.52	−0.34	0.18	−0.18	−0.06
Improve the quality of health services	0.57	0.19	0.41	−0.01	0.05
Support health awareness programs	0.39	0.36	0.03	0.07	−0.04
Support medical check-ups	0.46	0.14	−0.07	−0.11	0.13
Facilitate access to health services	0.49	0.12	0.05	−0.11	0.12
Support the cost of medications	0.55	0.10	0.00	0.12	0.16
Support health consultations	0.41	0.36	−0.02	−0.13	0.01
Supporting the treatment of chronic diseases	0.54	−0.10	0.17	−0.31	−0.01
Contribute to reducing student dropouts from schools	0.60	−0.08	0.06	0.18	0.17
Support outstanding students	0.51	0.10	−0.10	−0.07	0.11
Support creative and innovative students	0.43	0.13	−0.06	−0.07	−0.07
Offer training and educational programs to improve students’ skills	0.57	0.02	−0.10	−0.06	−0.04
Provided safe transportation means for students	0.50	−0.08	−0.03	−0.25	−0.10
Support the education of individuals with disabilities	0.39	0.04	−0.12	−0.15	0.03
Supporting housing and living services for students	0.48	−0.17	0.00	0.13	0.17
Provide financial support regularly and consistently	0.54	0.00	0.20	0.25	0.13
Help achieve my long-term financial goals	0.42	0.10	−0.13	0.09	0.02
Funds support small, productive projects	0.55	0.17	−0.21	0.08	−0.04
Meeting my current and future financial needs	0.51	−0.24	−0.28	0.07	0.05
Increase the sense of financial security	0.58	−0.33	−0.09	−0.07	0.18

highlight the distribution of item loadings across five factors (F1 to F5), indicating the underlying dimensions or latent constructs influencing the responses. Below are some key observations and comments:

• The exploratory factor analysis revealed three key dimensions: (1) Socio-economic Impact, including income, education, and healthcare benefits; (2) Governance and Trust, related to transparency and institutional management; and (3) Community Engagement, capturing awareness and participation. These factors align with the study’s framework, reflecting Waqf’s financial and social roles. Strong loadings above 0.60 support the reliability of these constructs and their relevance to understanding the multifaceted impact of Waqf investment funds;
• The factor analysis reveals that the primary impact of Waqf investment funds is perceived in terms of economic empowerment and improvement in living standards, as evidenced by the strong loadings of most items on Factor 1 (F1). Key benefits include increased income, improved standard of living, enhanced purchasing power, and access to financial and health services. These findings indicate that respondents view the funds as a vital mechanism for promoting financial stability and resilience;
• Items such as “Improve the quality of health services”, “Support medical check-ups”, and “Support the treatment of chronic diseases” exhibit moderate to high loadings on Factor 1 (F1), reflecting their perceived connection to direct economic impacts. Meanwhile, items like “Support health consultations” and “Support health awareness programs” show partial loadings on Factor 2 (F2);
• This distribution suggests that health-related benefits are viewed in two distinct dimensions: as contributors to economic improvements (F1) and as part of broader social initiatives focusing on health awareness and support (F2);
• Items related to education, such as “Contribute to reducing student dropouts”, “Offer training and educational programs”, and “Support outstanding students”, show strong loadings on Factor 1 (F1). This indicates that these educational benefits are primarily perceived as contributing to economic empowerment and financial stability;
• Items like “Provide financial support regularly and consistently”, “Help achieve my long-term financial goals”, and “Increase the sense of financial security” exhibit strong loadings on Factor 1 (F1). This highlights that Waqf investment funds are widely perceived as practical tools for fostering financial resilience and ensuring long-term stability.

4.3. Correlation and Regression Analysis

4.3.1. Correlation

To assess the relationships between Waqf investment funds and the selected socio-economic variables, personal income, healthcare access, education services, and sustainable finance, a correlation analysis was performed using the survey responses collected via a 5-point Likert scale. The analysis aimed to identify the strength and direction of associations between respondents’ perceptions of Waqf fund impact and each outcome variable.

The results in

Table 6. Impacts of Waqf investment funds on personal income.

Question	SA	A	N	D	SD	Chi-Square	p-Value
My income increased due to support provided by Waqf investment funds	54	154	100	34	4	109.78	0.000
My standard of living has improved	90	168	69	14	5	136.04	0.001
I have been able to save	47	140	100	49	10	81.51	0.000
Enable me to have access to additional income sources	55	138	113	33	7	98.59	0.000
I have been able to invest	36	144	115	47	4	110.42	0.000
Public services such as electricity and water have improved	67	138	103	28	10	91.23	0.000
My purchasing power has improved after receiving support from Waqf investment funds	133	125	58	27	3	116.36	0.000

demonstrate a significant positive impact of Waqf investment funds on personal income, as reflected in the highly substantial Chi-square values (p < 0.01) across all items. Most respondents agree that the funds have increased their income (60.01%), improved their standard of living (74.6%), and enhanced their purchasing power (74.6%), indicating their effectiveness in fostering economic empowerment. Additionally, the funds have enabled savings (54.0%), investments (52.0%), and access to additional income sources (55.8%), with strong agreement among respondents. However, a minority expressed disagreement, highlighting potential barriers that need to be addressed to ensure broader inclusiveness. Improvements in public services, such as electricity and water (59.2%), were also noted, underscoring the funds’ role in delivering societal benefits alongside individual economic gains.

The results reported in Table 6 show that respondents generally have a positive perception of the support provided by Waqf investment funds, with mean values above 3.4 for all questions, indicating overall agreement. Personal income increase (mean 3.64, T-value 13.13, p-value 0.000) and improvement in the standard of living (mean 3.94, T-value 20.12, p-value 0.001) were statistically significant. Savings ability (mean 3.48, T-value 8.96, p-value 0.000) and access to additional income (mean 3.58, T-value 11.55, p-value 0.000) also showed moderate agreement. Public services improved (mean 3.65, T-value 12.34, p-value 0.000), and purchasing power had the strongest positive perception (mean 4.035, T-value 19.81, p-value 0.000). Overall, the support significantly impacted income, standard of living, savings, investment capacity, and purchasing power, with low p-values confirming statistical significance.

Figure 2 shows that Waqf investment funds have the most significant impact on beneficiaries’ purchasing power (4.1) and standard of living (3.9). Other areas, such as income increases (3.8) and improvements in public services (3.7), also score high, reflecting broad economic benefits. However, lower scores for savings (3.4) and investments (3.3) indicate weaker impacts on long-term financial independence.

While the funds effectively improve immediate economic well-being, their limited impact on savings and investments highlights a gap in fostering financial sustainability.

The results in

Table 7. Impacts of Waqf investment funds on healthcare (based on ranking).

Question	SA	A	N	D	SD	Chi-Square	p-Value
Improve the quality of health services	49	158	103	33	3	118.31	0.001
Support health awareness programs	51	167	99	25	4	127.34	0.001
Support medical check-ups	54	160	96	28	8	108.17	0.001
Facilitate access to health services	53	144	110	35	4	106.98	0.001
Support the cost of medications	53	146	96	37	14	80.29	0.001
Support health consultations	63	150	98	27	8	98.46	0.001
Supporting the treatment of chronic diseases	91	154	76	17	8	115.63	0.001

highlight the significant positive impact of Waqf investment funds on healthcare, as evidenced by the highly significant Chi-square values (p < 0.01) across all items. A majority of respondents agree or strongly agree that the funds have improved the quality of health services (59.8%) and supported health awareness programs (63%). Similarly, a high percentage acknowledge benefits such as facilitating access to health services (56.93%), supporting medical check-ups (61.84%), and providing health consultations (61.6%). These findings demonstrate the critical role of the funds in enhancing healthcare accessibility and quality.

Support for specific healthcare costs, including medications (57.5%) and treatment of chronic diseases (70.8%), further underscores the funds’ impact on reducing financial barriers to essential health services. While agreement levels are high, a minority of respondents expressed neutral or disagreeing views, indicating potential areas for improvement to ensure the benefits are more evenly distributed and accessible. The results strongly affirm the funds’ contribution to advancing healthcare outcomes.

Figure 3 shows that “Supporting the treatment of chronic diseases” ranks highest (mean ~4.0), highlighting the funds’ strong impact on addressing critical health needs. “Support health consultations” and “Support health awareness programs” (both ~3.7) also rank well, indicating effectiveness in preventive healthcare.

Lower scores for “Facilitate access to health services” (3.6) and “Support the cost of medications” (3.4) point to gaps in affordability and accessibility. To enhance impact, the funds should prioritize reducing financial barriers, particularly for medications, to provide more comprehensive healthcare support.

The results in

Table 8. Impacts of Waqf investment funds on education.

Question	SA	A	N	D	SD	Chi-Square	p-Value
Contribute to reducing student dropouts from schools	76	143	92	33	2	105.46	0.00
Support outstanding students	44	168	99	27	8	118.28	0.00
Support creative and innovative students	54	143	107	38	4	178.19	0.00
Offer training and educational programs to improve students’ skills	71	144	98	30	3	178.42	0.001
Provided safe transportation means for students	64	152	92	28	10	182.15	0.001
Support the education of individuals with disabilities	60	146	101	31	8	97.0841	0.001
Supporting housing and living services for students	89	150	84	17	6	200.27	0.001

highlight the substantial positive impact of Waqf investment funds on education-related support, as indicated by the significant levels of agreement across most items. Most respondents agree or strongly agree that the funds contribute to reducing student dropouts (63.3%) and supporting outstanding students (61.3%), indicating that these initiatives play a crucial role in fostering educational continuity and excellence. Similarly, there is strong support for promoting creativity and innovation among students (56.9%) and offering training programs to enhance their skills (62.1%), demonstrating the funds’ contribution to skill development and innovation.

Specific services, such as providing safe transportation (62.4%) and supporting housing and living services (69.1%), also received high levels of agreement, highlighting the funds’ role in addressing student logistical and living challenges. Additionally, 59.5% of respondents agreed that the funds support the education of individuals with disabilities, showcasing inclusivity in educational initiatives. However, the relatively high neutral responses (around 26–30% for many items) suggest there is room for improving awareness or expanding the scope of these programs to reach a broader audience. Overall, the findings affirm the critical role of Waqf investment funds in promoting equitable and accessible education.

Figure 4 shows that “Supporting housing and living services for students” scores the highest (mean ~3.9), reflecting the funds’ strong impact on essential student needs. “Contribute to reducing student dropouts” and “Offer training and educational programs” (both ~3.7) also rank well, highlighting their effectiveness in promoting educational continuity and skill development.

However, lower scores for “Support creative and innovative students” (3.5) and “Support the education of individuals with disabilities” (3.5) indicate gaps in fostering inclusivity and innovation.

The results in

Table 9. Impacts of Waqf investment funds on sustainable finance.

Question	SA	A	N	D	SD	Chi-Square	p-Value
Provide financial support regularly and consistently	64	151	98	28	5	193.16	0.000
Help achieve my long-term financial goals	47	178	99	22	0	292.41	0.000
Funds support small productive projects	48	160	99	32	7	108.79	0.000
Meet my current and future financial needs	88	147	83	23	5	110.19	0.000
Increase the sense of financial security	105	150	69	18	4	125.18	0.000

illustrate the significant impact of Waqf investment funds on sustainable finance, with all items showing highly significant Chi-square values (p < 0.01), indicating strong agreement among respondents.

A majority of respondents (62.2%) agree or strongly agree that the funds provide regular and consistent financial support, help achieve long-term financial goals (65%), and support small, productive projects (60.1%). These findings emphasize the funds’ role in promoting financial stability and fostering economic empowerment through consistent support and project financing.

Additionally, respondents highlight the funds’ ability to meet current and future financial needs (67.9%) and enhance their sense of financial security (73.7%). These results underscore the fund’s effectiveness in addressing immediate financial requirements while fostering long-term resilience and stability. The high level of agreement across these areas demonstrates the fund’s success in supporting financial sustainability and instilling confidence among beneficiaries.

Figure 5 shows that “Increase the sense of financial security” (mean ~4.0) ranks highest, highlighting the funds’ strong role in promoting stability. “Meet my current and future financial needs” (mean ~3.8) and “Help achieve my long-term financial goals” (mean ~3.7) also score well, reflecting their effectiveness in addressing financial challenges.

However, “Funds support small productive projects” (mean ~3.6) scores lowest, indicating limited impact on fostering entrepreneurial activities. To enhance long-term empowerment, the funds should focus more on supporting productive initiatives and balancing immediate financial stability with economic self-reliance.

4.3.2. Regression Analysis

A multiple regression analysis was conducted to examine the impact of Personal Income (Inc), Education (Edu), and Healthcare (Health) on Sustainable Finance (Suf). The results, summarized in

Table 10. OLS regression results.

Variable	Coefficient	Std. Error	t-Statistic	Prob.
Income	0.332819	0.05098	6.52847	0.000
Education	0.345945	0.05289	6.540788	0.000
Health	0.179068	0.050721	3.530453	0.0005
Constant	0.60705	0.157747	3.848247	0.0001

, indicate that personal income has a strong and statistically significant positive impact on sustainable finance, with a coefficient of 0.332819 (t-statistic = 6.529, p-value = 0.000). This suggests that for every one-unit increase in income, Suf increases by approximately 0.33 units, underscoring the crucial role of income in fostering sustainable finance and improving social welfare.

Education also shows a significant positive effect on sustainable finance, with a coefficient of 0.345945 (t-statistic = 6.540788, p-value = 0.000). A one-unit increase in education corresponds to a 0.35-unit increase in Suf, highlighting the importance of educational investments in advancing sustainable finance. These findings are supported by a high level of statistical significance (p < 0.01).

Healthcare has a positive but smaller impact on sustainable finance, with a coefficient of 0.179068 (t-statistic = 3.530453, p-value = 0.0005). This indicates that a one-unit increase in healthcare is associated with a 0.18-unit increase in Suf. Although its effect is less pronounced than income and education, it remains statistically significant (p < 0.01).

These results underscore the critical role of income, education, and healthcare in promoting sustainable finance. Income and education show the strongest influence. Investments in these areas can drive sustainable development and enhance social welfare. These effects may be influenced by mediating factors such as beneficiaries’ level of financial literacy, prior economic status, or access to complementary support services. Institutional trust, program awareness, and regional infrastructure may also moderate the impact, strengthening or limiting outcomes. Recognizing these underlying mechanisms provides a more nuanced understanding of how Waqf initiatives drive socio-economic change and suggest directions for future research.

The normality and stability of the regression model were assessed using the distribution of residuals. The histogram shows the distribution of residuals from the regression model, which appears approximately normal with a slight left skew (skewness = −0.2467) and a kurtosis value close to 3 (kurtosis = 3.2670), suggesting a bell-shaped curve. The Jarque–Bera test yields a p-value of 0.1035, indicating no significant deviation from normality. The mean is close to zero, and the standard deviation is 0.3881, suggesting unbiased predictions and moderate spread. Overall, the residuals meet normality assumptions, supporting the reliability of the model’s results, as shown in Figure 6.

4.4. Thematic Analysis: The Interview Findings

This study conducted five in-depth interviews with experts of Waqf investment funds in Saudi Arabia, offering valuable insights into the practical challenges and opportunities within the sector. These experts, representing diverse organizational structures and management approaches, provided critical perspectives on the governance, investment strategies, and operational challenges faced by Waqf institutions. The interview analysis was based on thematic analysis, as developed by [65], following six stages, which are the following:

• Collecting and transforming data and information from spoken form into written form;
• Coding the data and classifying it according to the institutions in the study sample;
• Dividing the content of the interviews into main themes and categorizing it accordingly;
• Identifying sub-themes within the main themes;
• Supporting the main and sub-themes with quotes and statements from the interviews;
• Writing the final report, ensuring coherence and alignment with the study’s objectives, and discussing its findings concerning previous studies on the topic.

The thematic analysis results in

Table 11. Thematic analysis of Waqf fund: key findings from Institutional Interviews.

Institutions Interviewed	Key Findings	Codes	Theme
King Abdulaziz University	- Waqf Investment funds support scientific activities that benefit students, faculty, and society; - They foster partnerships across public, private, and nonprofit sectors; - A key challenge is boosting investment in education; - Waqfs ensure sustainability by preserving principal funds and utilizing returns; They are vital for sustainability, with notable economic and social impacts.	Contribution to Education and Sustainability	Support for scientific activities, cross-sector partnerships, awareness challenges, sustainability mechanisms, and socio-economic impact
Ihsan Waqf Investment Fund	- Waqf Investment funds are new in Saudi Arabia and significantly support allocated programs; - They are sustainable, with untouchable principal funds; - The future of Waqf investment funds is tied to the ability and maturity of fund managers, as the manager must be efficient and give the best returns and results; Investments are cautious and risk averse.	Sustainability and maturity of fund managers, Risk Management in Waqf Funds	New Waqf practices, program funding, sustainability, and low-risk investments
King Faisal University Investment Fund	- Waqf investment funds positively impact increasing individual income; The Waqf fund contributes to supporting healthcare services.	Socio-economic Impact of Waqf Funds	Improve income, healthcare support
King Khalid University Waqf Investment Fund	- The Mawhiba Waqf supports education, winning awards in physics and math; - Some European university Waqfs exceed national budgets; - Lack of incentives hinders merchant funding for Waqfs, requiring regulatory development; Waqfs can help universities achieve financial independence.	Financial Independence and Incentives for Waqf Development	Educational support, international comparison, lack of merchant incentives, regulatory needs, and financial independence
Othaim Charitable	- The Waqf Investment Fund’s recent contributions are his experience with licensed Waqf investment funds; - Saudi Arabia is working to enhance the legislative, regulatory, and investment environment; - The Waqf funds establishment faces agility issues due to bureaucracy; Waqf funds contribute to job localization and economic growth.	Weak contributions, regulatory improvements, bureaucratic challenges, and job localization benefits	Challenges and Opportunities in Waqf Fund Development

summarize findings from interviews with institutions involved in Waqf fund development in the Kingdom. The analysis identifies challenges, opportunities, and socio-economic contributions of Waqf funds, focusing on their evolving role in personal income, education, health care, and sustainable finance.

Waqf Investment funds in Saudi Arabia are relatively new. Bureaucratic hurdles have constrained their efficiency despite ongoing state efforts to improve legislative, regulatory, and investment frameworks. However, these funds have significant potential in supporting job localization and driving economic growth. Addressing these barriers offers opportunities to enhance Waqf contributions and streamline their operations.

In education, Waqf funds have demonstrated their value in supporting scientific activities and benefiting students, faculty, and society. Their ability to foster partnerships across public, private, and nonprofit sectors has expanded their impact. Still, challenges persist, particularly in increasing investment in education. These funds’ sustainability is a key strength, achieved by preserving principal amounts while utilizing returns, which ensures their long-term contribution to socio-economic development.

The Waqf Investment Funds model emphasizes sustainability and risk aversion. As observed in their application at various universities, these funds are managed with a focus on maintaining untouchable principal amounts and adopting cautious investment strategies. This approach minimizes risks and secures reliable contributions to areas such as education, ensuring their continued relevance and utility.

The socio-economic benefits of Waqf funds are evident in their impact on individual income levels and healthcare services, as seen in the initiatives at King Faisal University. These contributions highlight their potential to address key community needs and promote inclusive development. Expanding these efforts can further enhance their role in societal welfare.

Waqf Investment funds also offer pathways for financial independence. At King Abdullah University, the Mawhiba Waqf has supported educational excellence with physics and mathematics awards. However, the lack of incentives for merchants to fund Waqfs remains a significant obstacle. Compared with European universities where Waqf assets surpass national budgets, the Kingdom must strengthen regulatory frameworks to encourage greater merchant participation and capitalize on these funds’ full potential.

In conclusion, Waqf Investment funds have substantial potential for supporting education, healthcare, and economic growth. However, challenges such as bureaucratic inefficiencies, limited awareness, and insufficient incentives hinder their progress. Addressing these challenges requires regulatory improvements to create a more agile framework, incentives like tax benefits to encourage merchant participation, and awareness campaigns to promote public understanding. Fostering cross-sector partnerships and supporting low-risk investment strategies will enhance Waqf fund management and impact. By implementing these measures, Waqf funds can become powerful tools for advancing education, healthcare, and sustainability, contributing significantly to the Kingdom’s development goals.

5. Discussion of the Findings

This study aimed to assess the socio-economic effects of Waqf investment funds as a sustainable financing mechanism, focusing on their contributions to healthcare, education, personal income, and financial sustainability. The findings of this study closely align with the theoretical foundations of Waqf investment funds, reinforcing their role as a sustainable financing model. The observed positive impacts in healthcare, education, personal income, and financial sustainability are deeply rooted in key economic and financial theories. Islamic Finance Theory and Maqasid al-Shariah provide the ethical framework for these funds, ensuring that investments prioritize social welfare, risk-sharing, and equitable wealth distribution [9].

This is evident in the results, which underscore Waqf’s contribution to healthcare accessibility and chronic disease treatment, reinforcing its alignment with Islamic finance principles. Similarly, Portfolio Theory supports the diversification of Waqf investments, ensuring financial stability and long-term sustainability, a concept reflected in findings demonstrating increased financial security and economic resilience among beneficiaries [11]. Furthermore, Social Finance and Responsible Investment Theory highlight the integration of philanthropy with investment strategies, a principle substantiated by this study, where Waqf funds significantly contribute to enhanced purchasing power, income levels, and access to education [10]. These theoretical perspectives underscore the necessity of strong governance and strategic investment diversification in optimizing the socio-economic impact of Waqf investment funds.

The findings affirm the critical role of Waqf investment funds as a sustainable financing paradigm, revealing substantial socio-economic benefits across key sectors. These results align with the broader framework of Islamic financial principles and their compatibility with modern development objectives, particularly the United Nations Sustainable Development Goals [66].

This study revealed notable advancements in personal income, with 74.6% of participants indicating improved living standards and purchasing power and 73.7% recognizing heightened financial stability. The results align with the study by [23], which showed that Waqf investments incorporating Islamic commercial and social finance significantly improve societal welfare. Furthermore, [18] illustrated how the shift from cash Waqf to electronic Waqf enhances resource optimization for economic empowerment. This conclusion corroborates the earlier results of [26], which revealed that Waqf investment funds enhance personal income and financial inclusion.

Notwithstanding these achievements, the restricted influence of Waqf monies on entrepreneurial ventures underscores a deficiency in promoting economic self-sufficiency. This may reflect structural constraints, such as limited access to startup capital, lack of business development services within Waqf programs, or regulatory barriers. Interview data also pointed to a focus on short-term welfare support over long-term income generation. An integrated management approach that involves governments and banks to bolster Waqf’s contribution to small productive enterprises and a sustainable economy [20].

Discussions with Waqf fund experts show obstacles such as bureaucratic inefficiency and insufficient merchant incentives. This corresponds with the conclusions by [59], who underscored the necessity for robust governance structures that stress openness, accountability, and stakeholder involvement. Ref. [57] emphasized the significance of hybrid Waqf models, such as Waqf–Sukuk, in reconciling traditional practices with contemporary financial requirements. Innovative applications and digital transformation are essential for improving operational efficiency and trust, as highlighted by [18,56], who support the integration of green finance and digital solutions in Waqf management.

This study illustrates that Waqf funds substantially boost healthcare, with 70.8% of participants receiving chronic disease treatments and over 60% indicating improved access to healthcare, awareness initiatives, and subsidized medical examinations. These findings correspond with [33], who emphasized the efficacy of the Hamdard Health Waqf Model in South Asia, allocating 85% of its income to healthcare services for marginalized groups. Ref. [34] highlighted the significance of dual-purpose Waqf healthcare, integrating commercial services with subsidized care to guarantee fair access to medical services.

The outcome substantiates the contribution of Waqf investment funds to enhancing healthcare outcomes, corroborating earlier findings by [40,41,42,43].

Notwithstanding these accomplishments, obstacles persist regarding the pricing and accessibility of pharmaceuticals. Hybrid Waqf models and capacity-building initiatives for mitigating existing deficiencies suggest a strategic reallocation of resources toward healthcare to enhance service delivery [36].

This study indicates that Waqf funds enhance education by decreasing student dropout rates (63.3%), assisting exceptional students (61.3%), and fostering skill development via training programs (62.1%). These findings correspond with [45], who underscore Waqf’s significance in financing higher education institutions (HEIs) and promoting academic quality. [47] emphasized that Waqf’s adaptation to cultural and political circumstances facilitates its practical implementation in various educational environments. The results align with the research by [48] on values-based education enhanced by human Waqf programs in Indonesia, illustrating their role in sustainable education systems. The neutral responses identified in this study indicate a necessity for enhanced outreach and understanding to optimize the inclusivity of Waqf’s educational advantages.

The chi-square results showed significant associations between Waqf investment funds and improvements in income, healthcare, education, and financial security. Cramér’s V values indicate moderate to strong effect sizes, highlighting the strength of these links. Practically, this means beneficiaries of Waqf programs are more likely to experience stable incomes, better access to services, and improved educational continuity, especially among low-income groups. These outcomes reflect Waqf’s tangible impact on community well-being.

This study highlights the substantial impact of Waqf investment funds on sustainable finance, aligning with [60], which explored funds’ role in community development and poverty eradication. The study concluded that Waqf funds play a crucial role in financing projects. The connection of Waqf investment funds with Sustainable Development Goals underscores its responsiveness to modern concerns. Investments in renewable energy and healthcare demonstrate Waqf’s ability to meet sustainability goals. The results correspond to those by [54,55], emphasizing the socio-economic advantages of allocating Waqf monies to high-impact initiatives like green financing and community healthcare. The findings highlight a tension between Waqf’s role in offering short-term relief and its capacity to foster long-term self-sufficiency. While current initiatives meet immediate needs, few promote sustainable income or entrepreneurship. Addressing this requires balancing welfare support with strategies that enable economic independence.

The qualitative themes reinforce and provide context for the quantitative results. For instance, while surveys indicated improved income and access to services, interviewees emphasized the role of transparent fund management and community awareness in achieving these outcomes. Where the data showed gaps in education or healthcare benefits, interviews revealed challenges like regional disparities and bureaucratic delays. This integration deepens understanding by linking statistical trends to lived experiences, illustrating how governance, accessibility, and awareness influence the real impact of Waqf programs.

The empirical findings align with the theoretical frameworks discussed in the literature review. The observed impacts on personal income, healthcare, education, and financial sustainability support and extend previous studies. These connections provide clear guidance for targeted policy recommendations, enhancing the sustainability and effectiveness of Waqf investment funds. The findings confirm the transformative potential of Waqf investment funds as a strategic tool for sustainable development, consistent with previous studies [67]. By combining Islamic financial principles with modern socio-economic challenges, these funds address immediate community needs, such as income support, education, and healthcare, while contributing to long-term economic resilience. This alignment with prior research strengthens the argument that Waqf-based financing models can complement public welfare systems. To maximize their socio-economic impact, future efforts should focus on strengthening governance frameworks, expanding innovative applications of Waqf, and fostering entrepreneurship within Waqf-funded projects.

6. Conclusions and Policy Recommendations

This study thoroughly examined the socio-economic effects of Waqf investment funds as a sustainable funding mechanism. The data gathered comprised primary sources, including targeted questionnaires and interviews, and secondary sources, such as reports and scholarly studies. This study utilized Exploratory Factor Analysis (EFA) and chi-square testing to assess critical dimensions of socio-economic effect, including health, personal income, education, and financial sustainability. The study’s reliability was established with a Cronbach’s Alpha of 0.898, indicating robust internal consistency. The conclusions and policy recommendations can be summarized as follows:

• This study revealed that Waqf investment funds significantly improved healthcare delivery for beneficiaries. Notably, 70.8% of respondents reported receiving support for chronic disease treatment, while over 60% acknowledged enhanced access to health services, including awareness programs and subsidized medical care. These outcomes demonstrate the fund’s effectiveness in alleviating financial barriers to essential health services and promoting overall health equity;
• Waqf investments have played a considerable role in raising personal income and supporting economic well-being. Approximately 74.6% of respondents reported improvements in their standard of living and purchasing power. Additionally, more than 55% observed increases in income-generating opportunities, personal savings, and investment activities. This affirms the funds’ contribution to individual empowerment and household-level financial resilience;
• The findings indicate that Waqf investment funds are pivotal in fostering financial sustainability among beneficiaries. About 73.7% of respondents reported experiencing greater financial stability, and 67.9% highlighted these funds’ role in meeting present and future financial needs. These results validate the long-term viability of Waqf as a social safety mechanism that supports sustainable financial independence;
• Despite these positive outcomes, this study identified certain limitations. Specifically, the influence of Waqf investment funds on entrepreneurship and long-term financial autonomy remains restricted. This highlights a critical area for future policy attention: developing targeted initiatives that stimulate small business creation and reduce dependency through productive self-employment;
• This study underscores that Waqf funds contribute directly to the achievement of global development agendas, particularly the United Nations Sustainable Development Goals. By addressing poverty, promoting good health, enhancing education, and supporting financial stability, these funds serve as a faith-based mechanism for inclusive and equitable development;
• The evidence supports Waqf investment funds as a transformative model that integrates Islamic financial ethics with practical socio-economic solutions. To fully realize this potential, policy measures should focus on governance enhancement, diversification into high-impact sectors (such as renewable energy and technology), and institutional capacity-building to ensure long-term effectiveness.
• For Waqf funds to sustain their developmental role, integration with national development plans and alignment with global frameworks are essential. Enhancing governance through transparency and accountability, supported by digital tools like e-Waqf platforms, can strengthen stakeholder confidence. Policymakers must also empower Waqf administrators through continuous training and development, positioning Waqf as a core pillar of sustainable growth in Muslim-majority societies and beyond.
• To improve socio-economic outcomes, Waqf fund managers should expand targeted programs for low-income and rural beneficiaries, particularly in education and healthcare. Regulatory bodies should promote transparency through regular public reporting and third-party audits to build trust. To enhance long-term impact, integrating entrepreneurship training and micro-investment schemes into Waqf programs could foster economic independence. Policymakers should also support digital platforms to increase accessibility and awareness of Waqf opportunities across regions.

7. Limitations and Future Research Directions

This study has several limitations that should be acknowledged:

• This study’s geographical focus on Saudi Arabia limits the generalizability of the findings to other Muslim-majority countries with differing socio-economic contexts and Waqf management practices;
• In addition to its geographical focus on Saudi Arabia, this study is limited by its cross-sectional design, which restricts the ability to draw causal inferences. Furthermore, the reliance on self-reported survey data may introduce social desirability or recall bias, potentially affecting the accuracy of responses. Future research using longitudinal or mixed designs could offer deeper insights into the long-term effects of Waqf investment funds.
• This study primarily examines the socio-economic impacts of Waqf investment funds. However, it does not delve deeply into the operational challenges or cost-efficiency, which could provide a more nuanced understanding. This study’s cross-sectional nature restricts its ability to assess the long-term impacts of Waqf investments on socio-economic outcomes.

Future research may investigate the integration of Waqf funds with sophisticated financial instruments, including blockchain technology and green finance, to improve transparency, efficiency, and sustainability. Research examining Waqf’s contribution to entrepreneurial endeavors and promoting small and medium enterprises (SMEs) could rectify the recognized deficiencies in economic self-sufficiency and innovation.

Investigations into governance and management methodologies, especially in digital platforms like e-Waqf, can provide practical solutions to enhance stakeholder participation and fund management. Extending the focus to encompass Waqf’s role in tackling developing global concerns, such as climate change and refugee crises, could enhance its socio-economic significance and influence.

Longitudinal research investigating the multi-generational advantages of Waqf funds in education, healthcare, and financial resilience could yield a more thorough comprehension of their contributions to sustainable development. These directives will guarantee the development and enhancement of Waqf investment funds as a revolutionary paradigm for socio-economic advancement. In addition, the cross-sectional design limits causal and long-term inferences; future studies should adopt longitudinal designs to capture changes better and strengthen causal analysis.