From application to disbursement: Governance, risks and workflow in Islamic donation-based crowdfunding

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Abstract

This study examines the operational workflow and governance structure of Islamic donation-based crowdfunding, focusing on its alignment with Shariah principles and ethical financial practices. Islamic donation-based crowdfunding provides a faith-based mechanism for charitable contributions through digital platforms. Employing a qualitative document analysis approach, this research identifies four key stages in the end-to-end campaign process: project application, fundraising, post-campaign reporting, and fund disbursement. The findings show that campaign initiators begin by submitting proposals for platform approval, followed by public fundraising. Upon project completion, initiators are required to report on fund utilisation and outcomes. A notable feature of most platforms is that funds are disbursed directly to beneficiaries or service providers, rather than to project owners, reinforcing the principles of trust (amanah) and public benefit (maslahah) in Islamic finance. However, the study also finds inconsistencies in verification procedures and post-campaign accountability across platforms. It aligns with concerns raised by previous studies regarding the need for enhanced governance mechanisms. These variations highlight the need for a more standardized governance structure. In conclusion, the study highlights the need for a unified, Shariah-compliant framework to enhance transparency, build donor confidence, and uphold the objectives of Islamic Law (maqasid al-Shariah), particularly justice (‘adl), social responsibility (mas’uliyyah), and social welfare.

Keywords: Islamic Donation-Based Crowdfunding, Shariah Governance, Crowdfunding Regulation, Ethical Finance, Maqasid Al-Shariah, Malaysia

Authors’ individual contribution: Conceptualization — W.N.F.W.M.N. and S.M.Z.; Methodology — A.F.K.; Investigation — W.N.F.W.M.N., A.F.K., and R.M.R.; Resources — N.A.M.; Data Curation — S.M.Z.; Writing — Original Draft — W.N.F.W.M.N.; Writing — Review & Editing — W.N.F.W.M.N., M.I.H.K., N.A.M., and R.M.R.; Funding Acquisition — M.I.H.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G23, L31, Z12, D64, G38

Received: 15.07.2025
Revised: 05.12.2025; 05.02.2026; 05.03.2026
Accepted: 17.03.2026
Published online: 20.03.2026

How to cite this paper: Nazarie, W. N. F. W. M., Kamaruddin, M. I. H., Muhamed, N. A., Kamarubahrin, A. F., & Radzi, R. M., & Zaimi, S. M. (2026). From application to disbursement: Governance, risks and workflow in Islamic donation-based crowdfunding. Risk Governance and Control: Financial Markets & Institutions, 16(1), 178–186. https://doi.org/10.22495/rgcv16i1p15