How to harness billions in Muslim giving at Ramadan for global causes

It’s the holy month of Ramadan, which means that many Muslims are in an annual period of fasting, reflection, and prayer. It’s also the period of increased Zakat, or charitable giving, in accordance with the Islamic faith. A rising number of philanthropic organizations are seizing the opportunity to tap some of the billions of dollars that Muslims give in Zakat during Ramadan and steer those funds toward humanitarian causes worldwide. They range from GiveDirectly, a nonprofit that provides cash grants to impoverished people, to United Nations agencies like UNICEF and the UN Refugee Agency, to major international NGOs like Save the Children. Islamic giving represents a large untapped pool of potential funding for global philanthropy. Research shows that Zakat — an income-based donation of 2.5% of one’s surplus wealth — totals roughly $600 billion per year globally. In the United States, Muslims gave nearly $2 billion through Zakat in 2021. Like many forms of religious tithing, Zakat is often given through unofficial channels, such as to family members in need. That’s changing as more Muslims decide to donate to more established institutions and nonprofits. “Ramadan is widely seen to be the holiest month of the year and one of the most impactful months to give Zakat,” Walid Herzallah, GiveDirectly’s senior manager for growth, told Devex. “A lot of Muslims will wait to give the majority or all of their Zakat during the month of Ramadan, which is why we decided to launch our fund now,” Herzallah explained. This year Ramadan started on March 22 and will end around April 21. Last month, GiveDirectly launched a fund to raise $1 million for displaced families in Yemen, which has been ravaged by a nearly decade-long civil war. The fund targets Muslim donors who want to give Zakat, which is one of the Five Pillars of Islam, along with fasting and regular prayer. GiveDirectly’s online fundraiser for Yemen, which is slated to end July 1, had raised just over $95,000 as of Monday, the organization told Devex. It has raised more than $8,000 through LaunchGood, a global crowdfunding platform for Muslims. “We’d love to reach the goal by the end of Ramadan, but Zakat is given year-round and the fund is open for gifts anytime,” Herzallah said. Giving usually increases this week as Ramadan draws to a close. LaunchGood also hosts Zakat campaigns throughout the year, but its peak season is Ramadan, said Aarij Anwer, LaunchGood’s Zakat program manager. The Detroit-based organization hosted more than 5,000 campaigns and helped raise more than $40 million to be distributed in 190 countries during last year’s Ramadan. The 27th day of Ramadan is the biggest for fundraising, Anwer added. Muslims believe on that night, called Laylat-al-Qadr or the Night of Power, the first verses of the Quran were revealed to the Prophet Muhammad. This year’s Laylat-al-Qadr will be observed Tuesday. “Some of the earliest stories of Muslim giving here come from enslaved people who were giving among each other … and that's a tradition that we're proud to build upon.” --— Kalia Abiade, vice president of programs, Pillars Fund “That’s where we have our all-time high in terms of donations received, in terms of traffic — all the metrics,” Anwer said. LaunchGood’s current Zakat-verified campaigns include fundraisers to help children displaced by the recent earthquakes in Turkey and Syria as well as to prevent childhood blindness in Sudan. The Support Orphans and Refugee Children in Turkiye and Syria campaign had raised more than $53,000 of its $74,840 goal as of Monday. The rules of Zakat All donations to GiveDirectly’s Yemen fund will go to a “Zakat-eligible Yemeni family in need of cash.” The organization also said it will handle all donations in accordance to Islamic rules of Zakat. Those rules have different interpretations. For instance, many believe that while Muslims should generally give to people of all faiths throughout the year, Zakat offerings should only go to fellow Muslims, Herzallah said. It is common for nonprofits collecting Zakat donations to be vetted by Islamic experts to ensure that they are following the general concepts of Zakat. At LaunchGood, Anwer worked with two external advisors to develop a Zakat policy. It lays out categories of people eligible to receive Zakat, including Muslims considered “poor” and “needy,” those of “weak faith,” and “the indebted.” GiveDirectly hired Amanah Advisors, a United Kingdom-based global Islamic finance and fintech firm, to review its fund. Aminah Advisors granted GiveDirectly a certification letter. Those steps were meant to help make Muslim donors feel more comfortable working with GiveDirectly, Herzallah said. GiveDirectly has said that it wants to encourage more Muslims to join the effective altruism movement, which encourages givers to use evidence and data to maximize the impact of each dollar they give. For its Yemen fund, GiveDirectly has partnered with other organizations such as the U.K.-based Centre for Effective Altruism and Giving What We Can. Giving What We Can, which describes itself as a “community of effective givers” that helps donors find charities, has been helping to raise awareness around the fund and “facilitate the donation process and ensure that funds are allocated efficiently and transparently to direct cash transfers,” executive director Luke Freeman told Devex in an email. Freeman said he sees potential for Zakat giving to benefit other global causes, such as distributing bed nets and providing medicine to prevent malaria, vitamin supplementation, and vaccination programs in lower-income countries. “While we have not yet investigated whether these specific interventions could be Zakat certified, we believe there is great potential for effective giving to become an integral part of the Zakat giving season,” he wrote. A new generation of American Muslim donors The attacks of September 11, 2001 and the subsequent scrutiny that Muslims faced in the U.S. awakened a philanthropic muscle in the country’s community of about 4 million. Older generations, many of whom are immigrants, tended to focus their giving to communities and causes from back home and had a more informal approach to Zakat. That is changing. Muslim Americans today are more mindful of supporting local causes as well as global ones, such as international nonprofits and relief organizations. “There were a handful of American Muslim donors who were giving to their local mosques … but didn't have a way to do it in an organized way,” said Kalia Abiade, vice president of programs at Pillars Fund, a Chicago-based nonprofit that, since its founding in 2010, has given $7 million in grants to Muslim organizations and funds artist fellowships that fight negative narratives of Islam. In 2022, Pillars disbursed $2 million to 32 organizations through its Catalyze Fund. Pillars does not solicit Zakat but can receive it — and it then helps Muslims give to organizations that meet their Zakat giving goals. In a way, Zakat encourages the redistribution of wealth in society to support those in need, she said. “It's so unique and specific because it's required of people of a certain means,” Abiade said. Giving to institutions also became even more of a phenomenon after the 9/11 attacks, according to Shariq Siddiqui, an assistant professor of philanthropic studies at Indiana University’s Lilly Family School of Philanthropy. “Post-9/11, there's been scrutiny on Muslim giving, so people would rather now give it to institutions that have been vetted,” he told Devex. Poverty alleviation in the U.S. and abroad is a top priority for Muslim donors, said Siddiqui, who also runs Indiana University’s Muslim Philanthropy Initiative, which aims to make Islamic philanthropy larger and more effective. One aspect that makes Zakat giving different from other types of philanthropy is that it is driven by the spiritual intention of doing good — compared to other forms of charity, which tend to focus on the outcomes, Siddiqui said. This could allow for more innovation in the world of philanthropy. “There's more experimentation and more leaps of faith in terms of doing good that could come out of Islamic philanthropy,” he said. Debating who should receive Zakat The evolution of Zakat in the United States is part of a rethink among Muslims about how their philanthropy can support systemic change and battle inequality around the world. “If we're doing this individually, do we create a systemic response or do we just make ourselves feel better?” Siddiqui said. “Institutions are more likely to create a system that can deal with the inequities.” Having a more standardized approach to Zakat giving will help resolve these debates and create more sustainable anti-poverty efforts, said Sharif Aly, CEO of the charity organization Islamic Relief USA. More large institutions are becoming aware of the potential of Zakat. The UN Refugee Agency has a Refugee Zakat Fund, which raised more than $21 million last year. Its sister body UNICEF launched a Muslim philanthropy fund in 2019 that aimed to raise $250 million for its emergency response and development work for children. The British global nonprofit Save the Children established its Zakat fund last year. The emergence of these funds is also raising questions whether it's appropriate for non-Muslim individuals and entities to receive Zakat. Siddiqui said that for Muslims, when an Islamic institution collects Zakat, there is an understanding that the giving is rooted in a religious and spiritual responsibility. The question for Muslim givers, then, is how much non-Muslim or secular institutions are adhering to the Islamic regulations of Zakat. “They have reputable well-known established scholars that have given rulings that give them permission to do this,” Siddiqui said of the U.N. and others who have established their own Zakat funds. “But I think it's a discussion about whether this is the right approach to create that systemic response to inequity.” There are also concerns that larger nonprofits entering this space could crowd out funding for Muslim civil society groups that rely on that giving, said Aly of Islamic Relief. “That is creating a red flag” for smaller Muslim charities, he said. Pillars Fund’s Abiade said one thing she hopes becomes clear with the increased focus on Islamic philanthropy is that Muslims can be part of the solutions to large-scale societal problems. She is also hopeful that Islamic philanthropy can be sustainable long term due to its obligatory nature and the demographic of the Muslim community, particularly in the U.S. “We skew younger than all other faith groups in the United States. So there's an opportunity for this to take root for generations to come,” Abiade said. “Some of the earliest stories of Muslim giving here come from enslaved people who were giving among each other within their communities, and that's a tradition that we're proud to build upon.”