Regulating charitable organization in Malaysia: Issues and proposal

Purpose: The aim of this paper is to outline the various types of charitable trusts and examine to what extent, these organisation or forms of charitable trust are regulated under the Malaysian law. This will include Muslim charitable trust as well as the trust governed by the civil law. Methodology/Approach: Adopting a doctrinal research analysis, this paper assesses the various forms of charitable trusts, the laws and policies governing the forms based on the al Quran and Hadith, the statutes and the previous literatures. Findings: Currently charitable organizations in Malaysia can be in the form of a waqf institution, societies, foundation and company and there are different regulators in these different organizations. The scope of charity in Islam is wider as compared to under the civil law. There is no specific law for charity and there is no uniform law for Waqf as well other charitable deeds. With these shortcomings, abuse in charity organization may occur directly or indirectly. The research proposed that there is a need for a single body to oversee and with authority to monitor the practice of charity in various states in Malaysia. Research Limitations/implications The research merely focuses on practices in certain states with special reference to the states having experiences in dealing and managing charities including waqf. Practical Implication – The proposal for a statutory authority or clear provisions for regulating charitable acts and waqf in the statutes would strengthen the instiution and increase transparency thus build trust from the public to do more charitable acts. Originality/value – This paper addresses the lack of regulatory authority in monitoring charitable acts in Malaysia