Mediating Role of Trust in Cash Waqf Donations

Cash waqf donations are being administered by Islamic banks in Bangladesh. This study investigates the determinants of such donations by the depositors of Islamic banks using the waqf. The data for the study was collected through a self-administered questionnaire from 317 randomly selected depositors of two Islamic banks. The structural equation modelling approach was used to establish the significant determinants and validate the Modified Key Mediating Variable (MKMV) model developed in the study. The results indicated that board ability, board integrity, communication and accountability positively influence depositors’ trust, while board opportunism has a negative impact on trust. Trust has a positive impact on depositors’ commitment towards continuous donations. While trust fully mediates the impacts of board benevolence, board integrity, board opportunism and communication on commitment, the impacts of board ability and accountability on commitment are partially mediated by trust. The study is limited to only two Islamic banks. Therefore, the inclusion of all Islamic banks offering cash waqf deposits would improve the generalisability of the results. This study indicates the areas that require the necessary reform by Islamic banks. Public waqf administrators will also be able to understand the significance of factors discussed in the study. Sargeant and Lee (Journal of Nonprofit and Public Sector Marketing 18(2):1–33, 2004) first realized the potential of the waqf for charities operating in the UK. This study is the first to test the significance of the waqf and the validity of MKMV model for Islamic banks performing as a non-profit religious organization in a South-East Asian country.