Maqasid Values and its Application in Donation-Based Crowdfunding Practices

Abstract

Even though crowdfunding is considered a new industry, the dramatic expansion of financial technology (FinTech) has significantly contributed to its rapid development. This sector has successfully proven its role in supporting business activities and community-based projects. From Shariah perspective, crowdfunding philosophically seems to be in line with its objectives in terms of promoting wealth distribution, encouraging transparency, and supporting social justice. Nevertheless, several issues are associated with the current practice of crowdfunding in Malaysia including improper due diligence carried out by platforms to screen campaigns, the lack of regulation in protecting funds and ideas owned by project initiators, and weak Shariah monitoring aspects. As a result, it is doubtful how far crowdfunding practices are in line with Shariah values. In this regard, this paper aims to explore the elements of Maqasid al-Shariah that can be adopted as an additional value to empower donation-based crowdfunding practices in Malaysia. The outcome of this paper would benefit many parties related to crowdfunding including entrepreneurs, crowdfunding platforms, and society who fund the fundraising projects.