Revitalizing Waqf and Local Zakat Practices as Instruments of Sustainable Development: Lessons from Islamic Communities in Indonesia

Indonesia, as the world's largest Muslim-majority country, holds enormous yet underutilized potential in waqf (Islamic endowment) and zakat (obligatory almsgiving) as instruments of sustainable development. This article examines how the revitalization of waqf and local zakat practices can contribute to the achievement of the Sustainable Development Goals (SDGs), with particular emphasis on poverty alleviation, social equity, and community economic empowerment. Using a qualitative approach based on a systematic review of 68 peer-reviewed articles and multi-case study analysis from selected Islamic communities in Indonesia, this study analyzes the institutional, regulatory, and social frameworks that govern waqf and zakat management. The findings reveal that Indonesia has made significant strides in formalizing Islamic social finance, as evidenced by productive waqf programs, Cash Waqf Linked Sukuk (CWLS), and BAZNAS poverty reduction initiatives. Notwithstanding these advances, challenges remain in governance, nazhir capacity, digital integration, and public literacy. Lessons from pesantren-based waqf, community-managed zakat funds, and multi-stakeholder collaborations demonstrate that localized, community-rooted approaches yield more sustainable outcomes. The study concludes with policy recommendations for strengthening synergies between waqf, zakat, and SDG frameworks within Indonesia's Islamic philanthropic ecosystem.