The Measuring Efficiency of Waqf Fund

Abstract

This study will try to measure the efficiency of waqf funds in zakat institutions in Indonesia using the non-parametric Data Envelopment Analysis (DEA) method. The objects in this study are eight zakat institutions that manage waqf funds in Indonesia. The data in this study comes from the annual reports of each of these institutions during the period 2013-2020. The input variables in this study include operational costs and HR costs. In comparison, the output variables in this study include the collection and distribution of waqf funds. This study indicates that during 2013-2020, the efficiency of zakat institutions in managing waqf funds has a fluctuating trend. This study will also look at the possibility of improving inefficient programs from input and output variables; in general, the main factor in the efficiency of waqf funds lies in the output variable, namely the acceptance and distribution of waqf funds. In addition, this study provides a reference for other decision-making units (DMUs) in improving efficiency, and the average DMU used as a reference is the one who has good professionalism and innovation.
 Keyword : Waqf fund, Data envelopment analysis (DEA), Efficiency, Indonesia

Measuring the Efficiency of Waqf Fund in Indonesia

“…This is demonstrated by the constantly rising graph of efficiency beginning in 2019 and continuing until 2021. The results of this study contradict those of Herindar and Rusydiana (2021) claiming that the Covid epidemic reduces the efficiency of waqf funds due to a decrease in the amount of waqf funds collected and dispersed.…”

“…Thus, in this paper, we measure the efficiency of philanthropic institutions that manage waqf funds in Indonesia. In the literature, to the best of our knowledge, there are only four studies on waqf efficiency - Herindar & Rusydiana (2021); research by Hasan et al (2020); Pyeman et al (2016); and Bakri et al (2020). These studies employ the Data Envelopment Analysis (DEA) approach to measure waqf efficiency.…”

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