DETERMINATION OF ZAKAT AND WAKAF AS A FUNCTION OF COMMUNITY WELFARE IN INDONESIA

Abstract

This study analyzes the effects of Productive Zakat (X₁) and Productive Waqf (X₂) on Community Welfare (Y) in Indonesia, with Institutional Governance (X₃) as a supporting variable. The research is driven by the urgent need to optimize the role of Islamic philanthropy in sustainably alleviating poverty and social inequality. Employing a quantitative causal design, data were gathered from LAZNAS and BWI annual reports, alongside questionnaires from at least 200 beneficiaries (mustahik/mauquf alaih). Community welfare was measured via the CIBEST Model, which encompasses Material, Spiritual, and True Welfare dimensions, and the data were analyzed using Multiple Linear and Panel Data Regression. The empirical results indicate that productive zakat has a positive and significant effect on welfare by driving economic self-sufficiency among beneficiaries. Furthermore, productive waqf serves as a positive and significant determinant for sustainable social development capital as an endowment fund to finance basic public services. Additionally, institutional governance, characterized by transparency and accountability, acts as a key variable that strengthens the link between zakat or waqf instruments and their corresponding welfare impacts, while simultaneously exhibiting a strong overall coefficient of determination. In conclusion, Zakat and Waqf play a vital role in achieving Falah, or holistic welfare, in Indonesia. Policy implications recommend strengthening synergies between LAZNAS and BWI, alongside standardizing program impact measurements using multidimensional models to maximize the contribution of Islamic economics to national development.