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MALAYSIAN CORPORATE WAQF BENCHMARKING AND PERFORMANCE

EVALUATION

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 MALAYSIAN CORPORATE WAQF BENCHMARKING AND
PERFORMANCE EVALUATION
Hazriah binti Hasan1
Abstract
Islam is not just a religion of worship; it is a comprehensive discipline that includes all aspect
of sciences including economics. It provides many institutions that functioning in parallel to
meet a just and welfare society for all. As the faith-based organization, Waqf stayed firm with
its definition, context and motivation. The most successful corporate Waqf in Malaysia is
Waqf An-Nur Corporation Berhad (WANCorp) of Johor Corporation. The founder of
WANCorp, Tan Sri Ali Hashim had suggested that the Malay community must establish a
corporate endowment funds in supporting the struggle of their businesses and also urged to
focus on business and corporate endowment as "a formula and potential business strategies to
restore economic empowerment status and the position of the economy as a caliph of
Muslims.” As the main and successful corporate Waqf in Malaysia, WanCorp drove a
increasing trend of its collection and distribution. This study aimed at measuring efficiency
score of WanCorp and determining the best management practices in the year examined.
DEA computing the best tool for efficiency measurement as to date. DEA uses the input and
output information of the firm to analyse the efficiency scores that can be as the benchmark
of the firm operation (decision making units).
Keywords Waqf, Corporate Waqf, efficiency, DEA

Introduction
Development of Malaysia's corporate endowment has started since the establishment of the
Wakaf An-Nur Corporation Berhad (WANCorp) led by a renowned founder, Tan Sri
Muhammad Ali Hashim. WANCorp valued at RM200 million in 2006 it had increased to
RM538.5 million in 2011. WANCorp successfully invented An-Nur Endowments Clinic
project as a basis to contribute to the society as more than 800,000 patients have been treated
with only RM5 fee. Health treatment and consultation is also enjoyed by non-Muslims. The
clinic projected its 17 outlets across the country. Not only enjoying the healthcare services,
the society also benefitted from the micro credit scheme offered, facilities, business premises
and religious activities.
Corporate Waqf in Malaysia has been developed tremendously as Yayasan Wakaf Malaysia
(YWM) was developed in Department of Waqf, Zakat and Pilgrimage (JAWHAR), Ministry
of Prime Minister’s Office. Perbadanan Wakaf Selangor (PWS) also enhancing the
collaboration with Bank Muamalat Berhad to produce Wakaf Selangor Muamalat.
In a keynote address made by the Bank Negara Malaysia, at the 2007 INCEIF Global Forum
said “A stronger zakat and waqf system would not only complete the equation for a
comprehensive Islamic financial system, that supports a more equitable distribution of wealth
to ensure fairness and equity, it will also become the user of the Islamic financial services
particularly in the management and investment of the zakat and waqf funds. In addition,
access to Islamic financial services to micro enterprises would bring such activities into the
economic mainstream and improve their level of performance”. Thus, from the keynote
address made by the Governor, zakat and waqf could support equitable distribution of
income achieving equality and consequently the development of the ummah.
Islam is not just a religion of worship; it is a comprehensive discipline that includes all aspect
of sciences including economics. It provides many institutions that have to function in

1
PhD, Senior Lecturer, Faculty of Entreprenuership & Business, Universiti Malaysia Kelantan;
hazriah.h@umk.edu.my

Page 1 of 12
parallel in order to meet a just and a welfare society for all. As the faith-based organization,
Waqf stayed firm with its definition, context and motivation.
Waqf is generally related to the religion and economic system of Islamic society which play a
big role since the beginning of Islamic civilization history. This Islamic institution was well
spread and was accepted as one of a foundation to build the human society especially in
providing the basic need and functions as system supporter as well as free infrastructure.
Waqf or religious endowment plays an important role in bringing out the equality and human
development for the nation. This institution was well known by the people since the
beginning of Islamic civilization history.
People in initial time tried to apply the concept of Waqf in their society so as to upgrade their
lives and offered many benefits to the people and societies. This Waqf or endowment also
forms a strong and dynamic force in moving the society towards development and success. In
addition to that, the United State also agrees that the system of Waqf forms the best
mechanism to rearrange and manage the state of richness between the rich and poor people in
the society. This Waqf system is not only an Islamic Institution which can sweep out the bad
attitudes such as greediness, jealousy, and the betrayal but it also be able to bring out the
sense of love and sympathizes toward each others in society as well as creating the quality
people who respect the right of others by holding strongly good ethics and moral values.
Waqf as Chapra (2008) describes in his writing on Ibn Khaldun’s theory of development:
Wealth (W) provides the resources that are needed for ensuring justice (j) and
development (g), the effective performance of its role by the government (G),
and the well-being of all people (N).
AbulHasan (2002) did mention in his writing that a poverty alleviation program should
address issues related to the four variables. If peoples’ access to education, health care and
physical infrastructure is increased, it is expected to alleviate the problem of poverty without
even any direct income-enhancement strategy. Any further income-enhancement strategy will
reinforce the positive effects on poverty alleviation. It is therefore imperative to take a
comprehensive approach to poverty and poverty alleviation. Waqf, as a constituent ingredient
of the poverty alleviation program of Islam, takes such an approach.
In economic literature, the ‘efficiency’ terminology is usually centered on the physical,
allocative and economic aspects of enterprising, not being conveniently adaptable to Waqf
operations. In contrast, concepts of financial and operational efficiency seem to be more in
conformity with the nature of Waqf operation. Hossein Pirasteh in “Efficiency criteria in the
public and private Waqf management: the Iranian experience” did describes about three
kinds of general definition of efficiency namely technical, allocative and economic efficiency
(Monzer Kahf & Siti Mashitoh Mahamood, 2011). Even though the definition of efficiency
seems to be applicable to all private, public, profit and non-profit seeking enterprises, but
with respects to the differences in objectives, nature of performance of Waqf organizations in
terms of its insourcing and outsourcing flows, it is expected that the definition, measurement
and interpretation of the social institution to be rather different.
This type of non-profit institution is purely technical in the sense that physical amount of
output is related to a unit physical amount of input. It seems not much problem exist in
measuring technical efficiency if the production process uses only one type of input. Since
technical efficiency is usually measured in agricultural or industrial activities, it may look
impossible at the first glance and to be conformed to the subject of social service provision by
non-profit institutions. Rather, it can be conceptualized if a Waqf structure like mosque or
orphanage is located in a site which is well populated and renders more services to the users.
Likewise, an orphanage, a school, a graveyard or the like which is entitled for Waqf by a
donor but not so many individuals are using their services, therefore can be considered as a
resource waste assets. This explains the efficiency criterion demonstrates service intensity

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rendered use (waste) in such institutions. To sum, technical efficiency can be definable,
approximately measurable and comparable for Waqf unit entities, showing how resources are
used to reach the intended objectives.

Waqf An-Nur Corporation Berhad (WANCorp)

Waqf An-Nur Corporation Berhad or WANCorp is a company limited that functioning as the
manager of the Waqf shares and assets. WANCorp began its operations on October 25, 2000
with the name of Waqf Management Clinic An-Nur Berhad. Clinic Management Waqf An-
Nur Berhad was initially established to manage the endowment clinics and dialysis centers
under KPJ Healthcare Berhad of Johor Corporation (JCorp). The company later changed its
name to Waqf An-Nur Berhad on 19 July 2005 and Waqf An-Nur Corporation Berhad on 18
May 2009 to play its wider role and aspirations to the company. WANCorp financial
performance for 2012 remain favorable due to the country's economic situation growing
steadily and has contributed to the improved performance of the Company's Waqf assets
which successfully amounted RM57.56 million in 2012.
WANCorp assets is generated from Waqf funds from the group of listed and unlisted
companies of KPJ groups. KPJ Healthcare Berhad allocated 8.95 percent of the company’s
shares to WANCorp, KULIM (M) Berhad allocated 4.16 percent and AL-AQAR KPJ Reit
allocated 0.38 percent of the company’s shares. Also, the unlisted companies of the group
like Tiram Travel Sendirian Berhad allocated 75 percents, Capaian Aspirasi Sendirian Berhad
allocated 75 percents and TPM Management Sendirian Berhad allocated 61 percents of
company’s shares for WANCorp.
WANCorp also providing Waqaf Dana Niaga for upgrading economic achievement of
Muslim Malay businesses. This scheme is a micro credit scheme with no interest charged.
Moreover, WANCorp establishing Waqaf Brigade for humanitarian and welfare mission of
WANCorp and JCorp itself.
Historically, JCorp 's involvement in the awareness of endowments started in January 1992
through An-Nur Mosque Waqf site of Johor Bahru Plaza that incurred construction cost of
RM500, 000 . The mosque is the first mosque ever built in Malaysia in a shopping centre.
Progressively, JCorp is continuing its efforts in Waqf commercial space established in Waqf
An- Nur Clinics in the mosque area.

Literature reviews
Efficiency in the organization is viewed as a very important measurement to identify a good
management practice is applied in the organization. The measurement tells how the
organization uses its funding, human capital, technology and information in achieving
organization’s objectives. Measuring various aspects of the organization’s performance
requires the transformation of the data into useful ‘knowledge’ for decision-making process.
Clearly a principal objective of performance measurements is to enhance various notions of
efficiency. In its popular manifestation performance measurement leads to league tables but
within the context of performance management that is only the starting point of an exercise of
performance measurement. Also further detailed analysis and possibly inspection of the best
and the worst performers is then necessary in order to understand the production process and
derive useful information which may help both the worst and the best performers to make
further improvements towards efficiency.

Waqf
Literally, Waqf came from Arabic word which means: make endowment of the land and give
itto the needy. It is a religious endowment, recognized by Shariah as religious, pious
orcharitable donation. Waqf also means: make endowment of houses and keep its gains in

Page 3 of 12
the way of God. By this we can understand that waqf or endowment is to preserve or upkeep
the original wealth, whether land or house etc and give its profit to the needy.
By this we can understand that waqf is wealth that was kept from the consummation of the
original owner and give its benefit to the poor and needy, and that wealth must remain in the
same condition without being consummate by the first owner. From these four eminent
scholars’s views we can learn that all scholars agreed that the waqf is to keep the origin
wealth and use its profit for charity in order to help the poor and needy. However, Prof. Ab.
Manan defines that Waqf is ownership of a property which was converted from private
ownership to social ownership category by allocating a property together with its own income
to a beneficial service.
The institution of waqf refers to a foundation set up by keeping a property in perpetual
existence and making its income available for specified beneficiaries. This institution has
been in existence from the very early days of Islam. It has always played an important social
and economic role. The waqf properties have traditionally financed expenditure on mosques,
schools, research, hospitals, social services and defense.

Corporate Waqf
The founder of Waqf An-Nur Corporation Berhad (WANCorp), Tan Sri Ali Hashim had
suggested that the Malay community to establish a corporate endowment in order to support
the struggle of their business. Former President and Chief Executive Officer of Johor
Corporation (JCorp) also urged to focus on business and corporate endowment as "a formula
and potential business strategies to restore economic empowerment status and the position of
the economy as a caliph of Muslims.”
In the case of corporate Waqf, all shares belonging to JCorp that are endowed are registered
as Waqf with Majlis Agama Islam Johor (MAIJ). However the ownership of share certificate
is under the name of Waqaf An-Nur Corporation Berhad (WANCORP), a company specially
created with JCorp’s guarantee to manage matters concerning endowed shares and the
allocation of benefits as stated in the “deed of waqaf”, including for the purpose of God
(fisabilillah). Thus, the structure and control system of WANCorp is a crucial one. JCorp
Chief Executive is appointed as WANCorp’s Chairman. The Memorandum of Articles and
Association of WANCorp stipulates that the Director of Johor Islamic Religious Department,
Johor State Mufti, Deputy Mufti, and the Director of Waqaf Department as members of the
Board of Directors. Other members are the CEOs of JCorp’s leading companies and
independent professionals.
JCorp’s initial action in endowing shares under this concept began on 3rd August 2006, when
Dato’ Haji Nooh Gadut was the State Mufti of Johor. With his wisdom and knowledge, he
saw that this concept needed to be quickly implemented for the benefit of people.
The initial action involved endowment of shares valued at RM 200 million (on Net Asset
Value) in three JCorp companies listed in the Malaysia Bourse (KLSE) that is RM 142
million in Kulim (Malaysia) Berhad (a company that also owns Sindora Berhad and the
restaurant chain KFC and Pizza Hut nationwide), RM 45 million in KPJ Healthcare Berhad
and RM 13 million in Johor Land Berhad (substituted through Istibdal in Al’Aqar KPJ REIT
in 2009).
The objectives of WANCorp:
a) Inculcating Islamic values in the management and administration of JCorp and its
Group of Companies
b) Managing and conducting the operations of Waqaf An-Nur Hospitals, Waqaf An-Nur
Clinic and its branches as well as ensuring the objectives of providing good healthcare
benefits to the needy and less fortunate.

Page 4 of 12
 c) Becoming the centre for reference with regards to the matters pertaining to corporate
Waqf management in Islam.
d) Management of mosques.

Efficiency
The efficiency measurement was at first introduced in 1950s by Koopmans (1951). In his
own words Koopmans said:
A possible point (…) in the commodity space is called efficient whenever an
increase in one of its coordinates (the net output of one good) can be achieved
only at the cost of a decrease in some other coordinated (the net output of
another good).
Another definition made by Debreu (1951) who initiated a measurement towards efficiency:
A numerical evaluation of the ‘dead loss’ associated with a non optimal situation
(in the Pareto sense) of an economic system.
Then the work of M. J. Farrel (Farrell, 1957) in his paper in Journal of the Royal Statistical
Society in 1957 which entitled: The Measurement of Productive Efficiency, he used the work
of Koopmans (1951) and Debreu (1951). Farrel demonstrated how distance functions can be
used in a practical way. To illustrate this practical way he then uses an empirical example of
the efficiency in the agricultural sector.
Clearly a principal objective of performance measurements is to enhance various notions of
efficiency. In its popular manifestation performance measurement leads to league tables but
within the context of performance management that is only the starting point of an exercise of
performance measurement. Also further detailed analysis and possibly inspection of the best
and the worst performers is then necessary in order to understand the production process and
derive useful information which may help both the worst and the best performers to make
further improvements towards efficiency.
A firm is said to have realized allocative efficiency if it is operating with the optimal
combination of inputs given input prices. The traditional approaches3 to measuring allocative
efficiency require input prices which are hardly available in reality. This explains why
empirical studies of allocative efficiency are highly concentrated on certain industries,
particularly banking, because information on input price can be readily obtained for these
industries (Badunenko, Fritsch, & Stephan, 2008). The major virtue of current article is that it
introduces a new approach to estimating allocative efficiency, which is solely based on input
and output quantities and profits and does not require information on input prices. An
indicator for allocative efficiency is derived as the profit-oriented distance to a frontier in a
profit-technical efficiency space. What is, however, needed is an assessment of input-saving
technical efficiency; i.e., how less input could be used to produce given outputs. This new
approach rests on an assumption of the law of one price, or competitive market equilibrium in
which all firms face the same input and output prices.
In his seminal paper, Farrell (1957) introduced a satisfactory measure of productive
efficiency and offered a practical solution to it. He used the concept of efficiency postulated
by Koopmans (1951) and the radial type of efficiency measure considered by Debreu (1951)
to introduce the foundation for efficiency analysis. He differentiated between technical and
allocative efficiencies. A firm is technically efficient if it uses the minimal possible
combination of inputs for producing a certain output (input orientation). Allocative
efficiency, or as Farrell called it price efficiency, refers to the ability of a firm to choose the
optimal combination of inputs given input prices. If a firm has realized both technical and
allocative efficiency, it is then cost efficient (overall efficient).

Page 5 of 12
Data Envelopment Analysis (DEA)
Its convenience in assessing the multiple input and output variables of the researched entities
by not requiring congruity and an apriori relationship makes it a very popular management
tool in many application areas (Akçay, Ertek, & Büyüközkan, 2012). According to the
authors, DEA is a widely used benchmarking tool to evaluate performances and efficiency.
Thanassoulis (2001) prescribed in his book that traditionally DEA is one of the methods
which we can use to assess the comparative efficiency of homogeneous operating units as
such schools, hospitals, utility companies or sales outlets. In less traditional contexts DEA
can be used to choose from a set of competing multi-attribute alternatives such as selecting a
most preferred site for locating some major facility or a sale outlet.
Several papers did discussed on the bank or financial institutions’ efficiency (Berger,
Leusner, & Mingo, 1997; Berger & Mester, 1997; Drake, Hall, & Simper, 2009; Halkos &
Salamouris, 2004; Holod & Lewis, 2011). As the proxy in making identification of method of
measuring efficiency in Waqf institutions, since there is no publication yet to discuss upon
using DEA in measuring Waqf institutions’ efficiency, then the measurement of efficiency of
the Islamic banks and Zakat department is referred. The Islamic banks efficiency
measurement in DEA was greatly discussed academically in prominent author, Professor Dr
Fadzlan Sufian.
Much of researches on banking efficiency had been discussed by Professor Dr Fadzlan Sufian
in his numerous articles. In Sufian (2009), he did on finding determinants of banking
efficiency during Asian financial crisis in 1997 from the Malaysia perspective. The study was
investigating Malaysia banking efficiency during the crisis by using DEA approach, then it
examined the robustness of the estimated efficiency scores from three different approaches
that are intermediation approach, value added approach and operating approach in Tobit
regression. The findings in the study showed a significant inefficiency in local banking
sectors during the crisis as the study also inserted the dummy variables of bank ownership,
economic conditions and bank characteristics in determine the real determinants of the
banking efficiency.
Sufian (2010) wrote on Modeling Banking Sector Efficiency: a DEA and time-series
approach that the present paper employs the data envelopment analysis (DEA) method on
quarterly data to construct the efficiency frontiers. Furthermore, the DEA method allows us
to focus on the technical efficiency of input savings, which can be further detailed into its
pure technical and scale efficiency components. The results of this study are useful to enrich
knowledge on the factors that influence the performance of banks in a developing economy.
The present paper also provides important findings in regard to the best practice among
banks. The findings from this study could be useful to bank managements and policymakers
in developing and transition economies in regard to attaining optimal utilization of capacities,
improvement in managerial expertise, efficient allocation of scarce resources and the most
productive scale of operation in the banking sector. The inputs variable consist of deposits,
fixed assets and overhead expenses as to represent measures for the banks’ labor, capital and
operating costs. Whereas the outputs variable consist of loans and advances and also
investments made by the banks as to represent measures for banks’ revenues and major banks
activities. The findings concluded that the banks operated at reducing its cost successfully,
nevertheless at non-optimal scale of operations.
Nor Hayati Ahmad, Mohamad Akbar Noor Mohamad Noor, and Fadzlan Sufian (2010)
provided an empirical study of measuring Islamic banks efficiency from all Muslim countries
that practicing Islamic banks during period of 2003 to 2009. This vast research dominated
with macroeconomic findings that examine countries’ banking characteristics and economic
indicators of the studied countries in which may have relationship with the Islamic banking
sector performance. It is commonly acknowledged that the choice of variables in efficiency

Page 6 of 12
studies significantly affecting the findings. Islamic banks activities particularly have
differences with the conventional banks in its products, services and financial sources.
Therefore, this study carefully identified its outputs and inputs variable so that the findings
representing the sector at best. Two approaches applied in this study that was production
approach and intermediation approach. Both approaches categorizing different inputs and
outputs variable. In the production approach, Islamic banks are regarded as the services
providers; the inputs are physical variables of labor and materials, including other associated
costs. The outputs are all the services provided in term of transactions, documents processed
and specialized services provided over a given time period. Whereas in intermediation
approach, Islamic banks are considered as the party whom intermediating funds between
savers and investors. Therefore, the inputs are labor, deposits and physical capitals while
loans and investments traded are regarded as the outputs. The findings of the study concluded
that Islamic banking sector dominated by the high income Muslim countries that representing
higher income people and prosperous nations.
Numerous of literatures found on efficiency study upon banking sector as such in Sufian and
Ibrahim (2005), Sufian (2004), Fadzlan Sufian (2006), Sufian (2006), Sufian (2007b), Sufian
(2007a), Fadzlan and Muhd-Zulkhibri (2007), Sufian and Chong (2008), Sufian and
Habibullah (2009), and Sufian and Noor (2009).
The only paper discussed on efficiency measurement in Zakat department found in Norazlina
Abd and Abdul Rahim Abdul (2011).
So as to measure the efficiency levels of firms, two separate methods have been developed by
researchers under the rubric of mathematical programming approach and the econometric
approach. Mathematical programming approach which is also known as Data Envelopment
Analysis (DEA) was originated by Charnes, Cooper, and Rhodes (1978). In DEA, multiple
outputs and inputs are reduced into a single output-input form in which efficiency measure is
yielded after necessary calculations are completed with linear programming.
In DEA, Berber, Brockett, Cooper, Golden, and Parker (2011) analyzes the efficiency of
SPEs (Social Profit Enterprises) and describe the social profit as “The amount of social and
humanitarian benefit gained as a result of investing in the well-being of others”.
While the stated goal of not-for-profit organizations is to generate revenues for their
“causes,” they vary in the “efficiency” of fundraising, and in effectively funneling raised
resources toward their stated causes. A charity may, in fact, be an efficient fundraiser without
effectively directing resources to the causes it serves, or vice versa. Existing rating systems
aggregate fundraising with the delivery of services, thus confounding the efficiency of two
distinct functions. Inefficiency in fundraising could very easily dominate that of cause
delivery, making a charity’s “good work with donated funds” difficult, if not impossible to
judge. We offer a rigorous analysis of charitable efficiency based on a two-stage Data
Envelopment Analysis (DEA) model yielding useful information for donors as well as SPEs
as both a performance metric and benchmarking vehicle. The methodology allows an SPE to
separately focus on different efficiencies (fundraising and service delivery), which are
generally critical goals for such organizations.

Research methodology
Data Envelopment Analysis (DEA) is a body of concepts and methodologies that have now
been incorporated in a collection of models with accompanying interpretive possibilities. In
the CCR ratio model (1978), it yields an objective evaluation of overall efficiency and
identifies the sources and estimates the amounts of thus-identified inefficiencies. Whereas the
BCC model in 1984 distinguishes between technical and scale inefficiencies by estimating
pure technical efficiency at the given scale of operation and therefore identifying whether
increasing, decreasing, or constant returns to scale possibilities are present for further

Page 7 of 12
exploitation. In Sengupta (2000), the economist views DEA as a partial equilibrium
characterization of efficiency of firms within an industry. In case of technical or production
efficiency, the market prices are not used at all. The DEA models concentrate on production
side only and that too at a given industry level.
The main method in non-parametric methods for measuring comparative performance.
Pioneers of data envelopment analysis (DEA) may not have expected that their ideas have
inspired the thinking of a group of researchers and have been developed collectively into a
widely accepted academic field. Thirty some years after the publication of the seminal paper
by Charnes, Cooper and Rhodes (Charnes A, Cooper WW, & Rhodes E., 1978), the
development continues and has not seen any signs of weakening. In 2009 alone, more than
700 DEA papers were published. Up through the year 2009, the field has accumulated
approximately 4500 papers in ISI Web of Science database (Liu, Lu, Lu, & Lin, 2013).
Moreover, the Multiplicative models by Charnes et al., 1982 and 1983 provide a log-linear
envelopment or a piecewise Cobb-Douglas interpretation of the production process by the
reduction to the antecedent 1981 additive model of Charnes, Cooper, and Seiford.
Another advancement from the original model is the Additive model and the extended
Additive model by Charnes et al. (1985) and Charnes et al. (1987) respectively. Both models
relate DEA to the earlier Charnes-Cooper (1959) inefficiency analysis and in the process.
Also, relate the efficiency results to the economic concept of Pareto optimality as interpreted
in the still earlier work of T. Koopmans (1949) in the volume that published the proceedings
of the first conference on linear programming.
While each of these models addresses managerial and economic issue and provide useful
results, their orientations are different and more importantly they generalize and provide
contact with these disciplines and concepts. Thus, models may focus on increasing,
decreasing, or constant return to scale as found in economics that are generalized to the case
of multiple outputs.
Essentially, the various models for DEA each seeks to establish which subsets of n decision-
making units (DMUs) determine parts of an envelopment surface.

Subscription
I fees O
Assets Non-Profit
N U
(buildings & Rents
charity
P T
structures institution Social P
U Other
income Services
T sources (Awqaf) U

S T
Labour S
(mutawallis,
nazirs)

Figure 1: Operational framework of non-profit charity institutions (Waqf) (Hossein Pirasteh

in Monzer Kahf and Siti Mashitoh Mahamood (2011)

Page 8 of 12
In measuring efficiency of WANCorp, we need the information from the company that
comprises of panel data. Yearly data of WANCorp from its early operation till the most
current year were collected. Simply from the dataset we can see the trend of its increasing or
decreasing trends of its figures. Hence, this analysis is aimed at measuring the WANCorp
efficiency scores in the years it is operated. So therefore, here the decision making unit in this
analysis is the years of its operation. Meaning to say that this analysis is to measure the
efficiency scores for each and every year.
In this study, the technical efficiency scores will be measured by DEAP Version 2.1 by Coelli
T.J, a DEA application tool in computing efficiency and productivity. We apply two inputs
and single output data to simplify the analysis. In DEA, the score ranges from zero (0) to one
(1). Zero score equals zero percent efficient (inefficient) score and one equalized one hundred
percent efficient score.
Since the ultimate mission of Waqf funds is to serve people with Waqf’s strong fundings in
providing aids, facilities and premises, then this analysis is output orientation or specifically
orientated at technical output efficiency. The technical output efficiency of a DMU is the
maximum proportion any one of its observed output levels represents of the level that the
output takes when all outputs are expanded radially as far as feasible, without detriment to its
input levels. In this case, the decision making unit (DMU) is the years of WANCorp
operation. Assuming that the analysis is catering from the year 2007 to 2012. So the DMUs is
2007, 2008, 2009, 2010, 2011 and 2012 which are totalled up to six DMUs.
In this case of WANCorp, the inputs and output are determined. Referring to the framework
in Figure 1, the inputs consist of WANCorp total annual assets (buildings and structures),
employees and other income sources as such rentals, fees and so forth. The ouput is classified
under one term it is the social services, benefit or projects financed by the Waqf funds of
WANCorp.
Therefore, the analysis is summarized in the equation:
We consider a problem with n DMUs indexed by j in {1,2,…,n}. Each DMU has p inputs and
q outputs. DMUj has inputs a1j, a2j,…,apj and outputs c1j, c2j,…,cqj. Here aij is the amount of
input i used by DMUj for i = 1, … , p and ctj is the amount of output t produced by DMUj for
t = 1, … , q.
∑𝑠𝑟=1 𝑣𝑟 𝑐𝑟0
𝑀𝑎𝑥 ℎ0 (𝑢, 𝑣) = 𝑚
∑𝑖=1 𝑢𝑖 𝑎𝑖0
∑𝑠𝑟=1 𝑣𝑟 𝑐𝑟𝑗
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜: ≤ 1 𝑓𝑜𝑟 𝑗 = 0,1, … . 𝑛
∑𝑚𝑖=1 𝑢𝑖 𝑎𝑖𝑗
𝑢𝑖 ≥ 0 𝑓𝑜𝑟 𝑖 = 1,2, … , 𝑚
𝑣𝑟 ≥ 0 𝑓𝑜𝑟 𝑟 = 1,2, … , 𝑚
where;
𝑎𝑖𝑗 = the amount of input i utilized by the jth DMU
𝑐𝑟𝑗 = the amount of output r produced by the jth DMU
𝑢𝑖 = weight given to input i
𝑣𝑟 = weight given to output r
j = number of DMUs
From the above equation, the technical efficiency of WANCorp management for the year
2007 until 2012 can be measured by the application of DEA.
Conclusion
From this conceptual modelling of corporate Waqf efficiency measurement in Data
Envelopment Analysis (DEA), we can generate efficiency scores according to wanted
decisison making units (DMUs) that we have. Technical efficiency (TE) measurement can
best be representing the best management practice of the organization studied. From the

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scores that we have in DEA, we able to see the range of efficiency score from zero value that
equal to zero percent efficiency to the value of one that equals to a hundred percent fully
efficient score. From the scores also, the benchmark of the most efficient DMU can be the
role model for the other DMU in order to evaluate the performances.
As the conclusion, efficiency measurement is important as to evaluate managerial
performances of any organization, so that fair evaluation is made based on the organizational
internal information and database. Efficiency measurement also best to comparing between
organizations within the same industry or homogeneous and among organizations that play
almost the same mission in the operation.

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