The Foundations as A Financial Resource: The Ottoman Example

Abstract In the Ottoman Empire, there was no direct funding from the central budget to finance education, health services and religious and cultural activities. In case of any insufficiency in the state budget for the services that have been mentioned above, they were provided by foundations which are currently referred as the third sector and are organized as more independent economic units. For instance, the ratio of foundations’ income in the Ottoman financial system is approximately 12% at the beginning of the 16th century and it reached to 20% in the early 17th century. Therefore, it can be stated that foundations play a significant role for finance for education, health, cultural and religious activities where profit is not available or the profit margin is low and the investment is not economically attractive. Every charitable institution had a foundation and the working way of foundation and structures of foundation which will be responsible for expenses to meet requirements for charity activities were expressed one by one. The foundation also included subjects such as how the institution would work, who would be employed and how much salary would be earned with regarding the conditions of the foundation (and conditions of the person/founder who established the foundation). This article will focus on the role of foundations as a source of funding in the Ottoman era