SYARIAH APPROACH MANAGEMENT MODEL OF THE COMMISSION TAKEN FROM THE PUBLIC DONATION BY NON-GOVERNMENTAL ORGANIZATIONS (NGOs) KHADIJAH AMIRA BINTI ABDUL RASHID UNIVERSITI SAINS ISLAM MALAYSIA SYARIAH APPROACH MANAGEMENT MODEL OF THE COMMISSION TAKEN FROM THE PUBLIC DONATION BY NON- GOVERNMENTAL ORGANIZATIONS (NGOs) Khadijah Amira binti Abdul Rashid Thesis submitted in partial fulfillment for the degree of MASTER OF SYARIAH UNIVERSITI SAINS ISLAM MALAYSIA March 2021 ii AUTHOR DECLARATION I hereby declare that the work in this thesis is my own except for quotations and summaries which have been duly acknowledged. Date: ……….. .. Signature: Name: Khadijah Amira binti Abdul Rashid Matric No: 3181053 Address: Teratak Raida, PTD 12479, Batu 8 ½, Bukit Kangkar, Jalan Tangkak Muar, 84400 Sungai Mati, Johor Darul Takzim. NOORAHZIANTI BINTI ARIF 1208 Highlight iii ACKNOWLEDGEMENTS بسم الله الرحمن الرحيم First of all, I am very grateful to Allah for all the favor, opportunity, strength, patience and inspiration given to me in completing this thesis as well as possible. Secondly, I would like to express my sincere appreciation to my supervisor, Dr Mohd Mahyeddin bin Mohd Salleh and my co-supervisor, Dr Mohd Soberi bin Awang for all the knowledge, guidance and moral support during the research until I succeed to complete this thesis. Thirdly, I would like to thank Centre for Graduate Studies and Dean of Faculty of Syariah and Law of University Sains Islam Malaysia for the opportunity given to pursue a Master‟s degree level. Fourthly, I would like to thank the involved NGOs such as Islamic Relief Malaysia (IRM), Aman Palestin, Majlis Perundingan Pertubuhan Islam Malaysia (MAPIM), Cinta Syria Malaysia (CSM), Muslim Volunteer Malaysia (MVM) and Pertubuhan Kebajikan Serantau Muslim for their willingness to help me in collecting data to complete this study. May Allah reward their good deeds. Next, million thank to my postgraduate colleagues and my best friend, Najwa binti Mohd Latif for supporting and helping me throughout this study. Thank you also to all the persons involved during my Master journey. Highest appreciation also to my beloved mother, Hamidah binti Abu Talib for the permission given to me to further study and always keep supporting and praying for my success in completing the thesis. Also, to my siblings, Muhammad „Afif, Muhammad Afiq, Muhammad Azfar and Khalidah Asyilah for understanding my commitment as a Master student. Lastly, millions of thanks to my beloved late father, Abdul Rashid bin Sarmon for every single sacrifice he did that cannot be expressed in any words. In fact, he always encouraged me to further a Master‟s degree level during his lifetime. Abah, this thesis is special for you. iv ABSTRAK Di Malaysia, dana awam kebiasaannya digerakkan oleh pertubuhan badan bukan kerajaan (NGO). Namun, terdapat pelbagai isu akauntabiliti dan integriti yang membelenggu pengurusan dana tersebut. Ini disebabkan oleh ketiadaan garis panduan yang jelas berkaitan kadar komisen yang sepatutnya diambil daripada kutipan dana oleh badan- badan NGO. Tujuan kajian ini adalah untuk mengkaji aspek pengurusan dana awam oleh badan-badan NGO di Malaysia, menganalisis undang-undang sedia ada berkaitan tadbir urus dana awam, menganalisis jenis-jenis akad kontrak yang digunapakai dan faktor- faktor yang mempengaruhi penetapan komisen hasil kutipan dana awam. Seterusnya, membangunkan sebuah model pengurusan berpendekatan syariah terhadap komisen hasil kutipan dana. Metodologi kajian ini berbentuk kualitatif melalui pendekatan analisis dokumen dan temubual separa berstruktur dengan melibatkan enam NGO terpilih di Malaysia yang terlibat secara aktif dalam aktiviti kutipan dana orang ramai. Hasil kajian mendapati bahawa terdapat lapan aspek pengurusan dana awam yang dikendalikan oleh NGO. Dari sudut perundangan, hanya NGO yang berdaftar di bawah Akta Syarikat 2016 sahaja yang dibenarkan untuk menggunakan dana awam, dengan merujuk Garis Panduan bagi Kelulusan Ketua Pengarah Hasil Dalam Negeri di bawah Subseksyen 44(6) Akta Cukai Pendapatan 1967. Garis panduan tersebut memperuntukkan sekurang-kurangnya 50% daripada dana awam yang diperolehi mestilah dibelanjakan bagi mencapai objektif pertubuhan. Bagi NGO yang berdaftar di bawah seksyen 6 Akta Pertubuhan 1966 pula, mereka tidak diberi sebarang garis panduan berkaitan pengambilan komisen. Selain itu, terdapat tiga jenis akad kontrak Islam yang diaplikasikan oleh NGO iaitu ijarah, ji’alah dan wakalah. Pengambilan komisen dipengaruhi oleh empat faktor seperti; i) upah amil, ii) rujukan undang-undang syariah, iii) panduan daripada mufti, institusi zakat dan NGO- NGO lain serta iv) kos projek dan pengurusan. Pengkaji juga meletakkan tujuh elemen penting kepada NGO untuk memastikan pengurusan komisen dana awam adalah selari dengan pendekatan syariah. Impak kajian ini dapat dilihat dari aspek sosial dengan memberikan penyelesaian kepada kadar komisen yang boleh diambil daripada kutipan dana awam oleh badan-badan NGO di Malaysia. Dalam aspek ekonomi, kajian ini membantu mengukuhkan keutuhan pengurusan dana awam oleh badan-badan NGO berteraskan prinsip akauntabiliti dan integriti. Hal ini secara tidak langsung menyokong pelaksanaan Rancangan Pencegahan Rasuah Nasional (NACP) (2019-2023) di mana negara menggalakkan ketelusan, akauntabiliti dan budaya integriti dalam kalangan rakyat Malaysia di samping dapat merealisasikan hasrat Wawasan Kemakmuran Bersama (WKB) iaitu menyediakan taraf hidup yang wajar kepada semua rakyat Malaysia pada tahun 2030. Kata kunci: pengurusan pendekatan syariah, komisen, kutipan dana, badan bukan kerajaan (NGO), akauntabiliti dan integriti. v ABSTRACT In Malaysia, public donation is usually implemented by non-governmental organizations (NGOs). However, there are various issues of accountability and integrity involved in the donation management. This is due to the absence of clear guideline regarding to the commission taken from public donation by the NGOs. The purpose of this research is to study the management aspects of donation fund by NGOs in Malaysia, analyzes the existing law relating to the donation management, analyze types of contracts used and the factors affecting the determination of commission rate. Thus, develop a syariah approach management model of commission taken from the public donation. The methodology used is qualitative method in form of documents analysis and semi-structured interview by involving six selected NGOs in Malaysia who are actively involved in the fundraising activities. The findings show that there are eight management aspects of donation fund applied by the NGO. From a legal perspective, NGOs that registered under Companies Act 2016 only are allowed to spend the donation collection, by referring to the Guideline for Approval of Director General of Inland Revenue under Subsection 44(6) of the Income Tax Act 1967. The guideline stated that at least 50% from the donation received must be spent to achieve the objective of the organization. Meanwhile, the NGOs registered under section 6 of Societies Act 1966 stated that they are not provided with any guideline relating to the commission rate. Besides, there are three three types of Islamic contract applied by the NGO which are ijarah, ji’alah and wakalah. The commission taken is affected by four factors like; i) wage of amil, ii) referring to the syariah law, iii) guideline from mufti, zakah institution and other NGOs and iv) project and management cost. The researcher also suggests seven important elements to the NGO to ensure that it is according to the syariah approach. The impact of this study can be seen from the social aspect by providing solution to the commission rate taken from the donation fund made by the NGOs in Malaysia. In economic aspect, this study helps to strengthen the management of public donation based on the accountability and integrity principles. Indirectly, it supports the implementation of National Anti-Corruption Plan (NACP) (2019-2023) where it promotes transparency, accountability and integrity culture in every Malaysians other than realizing the aim of Shared Prosperity Vision which is providing a decent standard of living for all Malaysians by 2030. Keywords: syariah approach management, commission, donation fund, non- governmental organizations (NGOs), accountability and integrity. vi الملخص هنظاؾ، . كمع ذلك(NGO)كومية الحغير اتنظم الد ما تكوف الأمواؿ العامة مدفوعة من قبلعادة ،ماليزيافي كيرجع ذلك إلى عدـ كجود مبادئ .تتخبط في إدارة أمواؿ الصنظدكؽ الدساءلة كالنظزاهة التي قضاياالعديد من توجيهية كاضحة في ا يتعلق بمعدلات الع ولات التي ينظبغي أف تؤخذ من جمع الأمواؿ من جانب الدنظم ات تهدؼ هذه الدراسة إلى مراجعة دكر الدنظم ات غير الحكومية في ماليزيا في الإدارة الدنظهجية .غير الحكومية دة الت ويل، ككذلك تحليل القوانين القائ ة الدتعلقة بإدارة الت ويل. كبالإضافة إلى ذلك، تهدؼ إلى تحليل لأرص أنواع العقود الدستخدمة كالعوامل التي تؤثر على إعداد ع ولات جمع التبرعات. كعلاكة على ذلك، تهدؼ إلى استخداـ الدنظم ات غير الحكومية في كضع نموذج للشريعة كنهج منظهجي في لجاف جمع الإيرادات من أجل ماليزيا. كتستخدـ هذه الدراسة الدنظهج النظوعي من خلاؿ تحليل الوثائق كالدقابلات شبه الدنظم ة التي تشارؾ فيها ست منظم ات غير حكومية مختارة. كتوصلت النظتائج إلى أف الدنظم ات غير الحكومية لعبت ثمانية أدكار من كجهة نمر قانونية ، ييس ح لل نظم ات غير الحكومية ؿ في حالة منظهجية. في ض اف أف تكوف إدارة الأموا الأمواؿ العامة، مع الإشارة إلى الدبادئ التوجيهية باستخداـ 6102الدسجلة بموجب قانوف الشركات لعاـ ( من قانوف ضريبة الدخل لعاـ 2) 44لاعت اد الددير العاـ للإيرادات الداخلية بموجب القسم الفرعي ٪ من الأمواؿ العامة التي يتم جمعها 01ما لا يقل عن أخذ جوازتنظص الدبادئ التوجيهية على .0621 من قانوف الج عيات 2لتحقيق أهداؼ الدنظم ة. بالنظسبة لل نظم ات غير الحكومية الدسجلة بموجب الدادة غير الحكومية ثلاثة بأخذ اللجاف.ك ا طبقت الدنظم ات، لا يتم إعطاؤها أم إرشادات تتعلق 0622لعاـ )أ( الأجور :عقود إسلامية هي: "إجارة" ك "جعالة" ك"ككالة". كتتأثر ع لية الع ولة بأربعة عوامل مثل العامة، )ب( كمراجع الشريعة، )ج( كالتوجيه من الدفتين كمؤسسات الزكاة كغيرها من الدنظم ات غير لباحثة سبعة عنظاصر رئيسية لل نظم ات غير الحكومية الحكومية، ك )د( حساب الدشاريع كالإدارة. ك ا اقترح ا لض اف إدارة اللجاف طبقا للشريعة الإسلامية. كتؤثر هذه الدراسة اجت اعيان من خلاؿ توفير حلوؿ لدعدلات رج من جمع التبرعات من قبل الدنظم ات غير الحكومية في ماليزيا. كفي الجانب الع ولات التي يمكن أف تُي د هذه الدراسة على تعزيز نزاهة إدارة الأمواؿ العامة من جانب الدنظم ات غير الحكومية الاقتصادم، تساع استنظادان إلى مبادئ الدساءلة كالنظزاهة. كهذا يدعم بشكل غير مباشر تنظفيذ الخطة الوطنظية لدكافحة الفساد يزيين ككذلك لتحقيق ( التي تعزز فيها البلاد الشفافية كالدساءلة كثقافة النظزاهة بين الدال6106-6162) ـ.6121( التي توفر مستول معيشة معقوؿ لج يع الداليزيين في عاـ WKBتطلعات رؤية الرخاء الدشترؾ ) vii .إدارة الشريعة، اللجاف، جمع التبرعات، الدنظم ات غير الحكومية، الدساءلة كالنظزاهةالكل ات الدفتاحية: viii TABLE OF CONTENTS CONTENT PAGE AUTHOR DECLARATION ii ACKNOWLEDGEMENTS iii ABSTRAK iv ABSTRACT v vi الدلخص TABLE OF CONTENTS viii LIST OF TABLES xi LIST OF FIGURES xii LIST OF STATUTES xiii LIST OF APPENDICES xiv LIST OF TRANSLITERATION xv LIST OF ABBREVIATION xvii CHAPTER 1: INTRODUCTION 1.1 Introduction 1 1.2 Problem Statement 3 1.3 Research Questions 5 1.4 Research Objectives 6 1.5 Significant of the Research 6 1.6 Scope and Limitation of the Research 7 1.7 Definition of Terms 7 1.8 Conclusion 9 CHAPTER 2: LITERATURE REVIEWS 2.1 Introduction 10 2.2 Past Research Findings 10 2.2.1 Concept of Syariah 11 2.2.1.1 Syariah Contract 11 2.2.1.2 Syariah Compliant Securities 12 2.2.1.3 Syariah Compliant Takaful 14 2.2.1.4 Syariah Compliant Hotel 15 2.2.2 Meaning of Commission 16 ix 2.2.2.1 Wage as a Commission 17 2.2.2.2 Concept of Ijarah, Ji’alah and Wakalah 18 2.2.3 Non-Governmental Organizations (NGOs) 21 2.2.3.1 Roles of NGOs in Malaysia 23 2.3 Conceptual Framework 28 2.4 Conclusion 30 CHAPTER 3: METHODOLOGY 3.1 Introduction 31 3.2 Research Design 31 3.3 Location and Subjects of the Study 32 3.4 Population and Sampling Procedures 33 3.5 Pre-Testing 33 3.6 Data Collection Method 34 3.6.1 Document Analysis 34 3.6.2 Interview 35 3.7 List of Informants 36 3.8 Data Analysis 39 3.9 Conclusion 40 CHAPTER 4: FINDINGS AND DISCUSSION 4.1 Introduction 42 4.2 Management of the Donation Fund by NGOs in Malaysia 43 4.2.1 Target Group and the Percentage of Distribution Provided by NGOs in Malaysia and Abroad 44 4.2.2 Main Source of the Operation 51 4.2.3 Method of Donation Collection 54 4.2.4 Option to Channel the Donation 61 4.2.5 Transparency of Contribution 68 4.2.6 Collaboration with Other NGOs 74 4.2.7 Strategic Partner of NGOs 77 4.2.7.1 Influencer of NGOs 78 4.2.7.2 Volunteer of NGOs 82 4.2.8 Annual Collection of Donation 89 4.3 The Law and Regulation Relating to the Donation Management 91 4.4 Types of Contract Used and the Factors Affecting the Determination of Commission Rate of Public Donation 95 4.4.1 Types of Contract 95 4.4.2 The Factors Affecting the Determination of Commission Rate 101 4.4.2.1 Wage of Amil 102 4.4.2.2 Referring to the Syariah Law 103 4.4.2.3 Guideline from Mufti, Zakah Institution and Other NGOs 104 4.4.2.4 Project and Management Cost 106 x 4.5 Syariah Approach Management Model of the Commission Taken from the Public Donation by NGOs 107 4.5.1 Element of Syariah Approach Management Model of Commission Rate 113 4.6 Conclusion 117 CHAPTER 5: CONCLUSION AND RECOMMENDATION 5.1 Introduction 118 5.2 Conclusion of the Research 119 5.3 Contribution of the Research 122 5.3.1 Registrar of Societies (ROS) 122 5.3.2 Non Governmental Organizations (NGOs) 123 5.3.3 Public 123 5.4 Recommendation of the Research 124 5.5 Conclusion 125 REFERENCES 127 APPENDIX 1 137 APPENDIX 2 138 APPENDIX 3 150 xi LIST OF TABLES Tables Page Table 4.1: Target Group and the Percentage of Distribution Provided by NGOs 44 Table 4.2: Main Source of the Operation 51 Table 4.3: Method of Donation Collection 54 Table 4.4: Option to Channel the Donation 61 Table 4.5: Transparency of Contribution 68 Table 4.6: Collaboration with Other NGOs 74 Table 4.7: Influencer of NGOs 78 Table 4.8: Volunteer of NGOs 82 Table 4.9: Annual Collection of Donation 89 Table 4.10: Types of Contract 95 Table 4.11: Factors Affecting the Determination of Commission Rate 110 xii LIST OF FIGURES Figures Page Figure 2.1: Conceptual Framework of Syariah Approach Management Model 28 Figure 4.1: Management of the Donation Fund by NGOs 43 Figure 4.2: The Factors Affecting the Determination of Commission Rate 101 Figure 4.3: Commission Taking of the NGOs 108 Figure 4.4: Commission Rate Taken from Public Donation 109 Figure 4.5: Similarity of the Commission Rate among NGOs 109 Figure 4.6: Similarity of the Factor Affecting the Commission Rate by NGOs 111 Figure 4.7: Elements of Syariah Approach Management Model of Commission Rate 113 xiii LIST OF STATUTES Statutes Page Business Act 1965 21 Companies Act 1965 21 Companies Act 2016 91, 92 Employment Act 1955 (Act 265) 16 Parliamentary Act 21 Payment of Wages Act 1936 17 Societies Act 1966 21, 93 Trustees Incorporation Ordinance 1952 21 xiv LIST OF APPENDICES Appendices Page Appendix 1: Questionnaires 137 Appendix 2: Official Letter of Application to Conduct Interviews with NGOs 138 Appendix 3: Pictures with the NGOs 150 xv LIST OF TRANSLITERATIONS ء ‘ b ب t ت th ث j ج h ح kh خ d د dh ذ r ر z ز s س sh ش s ص d ض t ط z ظ ع „ xvi gh غ f ؼ q ؽ k ؾ l ؿ m ـ n ف w ك h ق xvii LIST OF ABBREVIATIONS ABIM Angkatan Belia Islam Malaysia ACA The Awareness and Consolation Association ACT Aksi Cepat Tanggap AKPK Agensi Kaunseling dan Pengurusan Kredit ATM Automated Teller Machine CCTV Closed-Circuit Television CEO Chief Executive Officer CGM Cinta Gaza Malaysia COO Chief Operation Officer CSM Cinta Syria Malaysia CSR Corporate Social Responsibility DWAS Dana Wakaf Air Somalia GPM Global Peace Mission Malaysia HRDC Human Relief Development Center ID Identity Document IKIM Institut Kefahaman Islam Malaysia IKRAM Pertubuhan IKRAM Malaysia IRM Islamic Relief Malaysia IRW Islamic Relief Worldwide JAKIM Jabatan Kemajuan Islam Malaysia JIM Jamaah Islam Malaysia JPPM Jabatan Pendaftaran Pertubuhan Malaysia KLN Kementerian Luar Negeri KSSB Kempen Seorang Sekampit Beras LHDN Lembaga Hasil Dalam Negeri xviii MAIM Majlis Amal Islami Malaysia MAPIM Majlis Perundingan Pertubuhan Islam Malaysia MLLFS Malaysia Life Line for Syria MOA Memorandum of Association MOF Ministry of Finance MPWIM Majlis Perunding Wanita Islam Malaysia MVM Muslim Volunteer Malaysia NGOs Non-Governmental Organizations NUIM Nadwah Ulama dan Ilmuan Malaysia PICOM Palestinian Cultural Organization Malaysia PPIM Persatuan Pengguna Islam Malaysia PPR Program Perumahan Rakyat PSK Welfare Voluntary Organizations ROC Registrar of Companies ROS Registrar of Societies Malaysia SAC Syariah Advisory Council SC Securities Commission Malaysia SOP Standard Operation Procedure SSM Suruhanjaya Syarikat Malaysia TDV Turkiye Diyanet Vakfi UK United Kingdom UN United Nations URDA Union of Relief and Development Associations USA United States of America USD United States Dollar USIA United Sabah Islam Association USIM Universiti Sains Islam Malaysia xix YADIM Yayasan Dakwah Islam Malaysia YWCA Young Women‟s Christian Association