In Islamic terms, waqf refers to a religious endowment—a voluntary and irrevocable dedication of one's wealth or a portion of it. It can be in the form of cash or properties (such as land or buildings), and is disbursed for Shariah-compliant projects (such as mosques, learning institutions, hospitals or public amenities). Once a waqf is created, it can never be donated as a gift, inherited, or sold. Disbursement of its returns is done in accordance with the giver’s wishes.

1. General Waqf, which refers to an asset given by a party (al-waqif) without any specific stipulations on how it should be used. The asset (such as the property or cash) can be freely managed by a Mutawalli (sole trustee), in accordance with Shariah;
2. Specific Waqf, which refers to an asset given by a party (al-waqif) with specific stipulations how it should be used. The asset (such as the property or cash) must be managed by a Mutawalli, in accordance to the specific stipulations of the giver and Shariah.

Endowments represent money or other financial assets that are donated to universities. The purpose of an endowment is to provide a perpetual source of support for the university and its mission. In managing an endowment, the principal is invested so that the total asset value will yield an inflation-adjusted principal amount, along with additional income for further investments and operational expenditures.