Although it predated official development assistance, zakat — the Muslim practice of social giving and one of the pillars of Quran — has only gotten ample attention lately. And it has much to do with the need to find new sources of financing for humanitarian aid and development.
Zakat is equivalent to 2.5 percent of a Muslim’s wealth; this goes to certain categories of people, including the needy, the poor and those in debt.
The role of zakat in financing humanitarian action has taken the spotlight ahead of the World Humanitarian Summit, which is slated for 2016. It’s in fact one of the areas the WHS secretariat is “studying in more detail” and discussing with a range of stakeholders, its chief, Jemilah Mahmood, noted in a gathering in London.
“I wouldn't be at all surprised to see it in the 2016 recommendations,” Chloe Stirk, program adviser for the Global Humanitarian Assistance program of Development Initiatives, told Devex.
Magnitude of zakat
Stirk authored a recently launched report exploring the magnitude of zakat. Actual numbers on the global volume of zakat can’t be determined but it’s estimated to be in the tens of billions of dollars per year.
“One big takeaway for me is the scope and potential of zakat as a resource, and yet despite it's clearly huge potential, there’s a lack of really credible evidence or data on just how much is raised, collected and how it's being used and where it's being used,” Stirk said.
Stirk and her team were however able to get figures from Indonesia, Malaysia, Qatar, Saudi Arabia and Yemen — where 17 percent of the world’s Muslim population resides — and funds raised through zakat from these countries currently total $5.7 billion each year.
In these countries, the state collects and distributes zakat, and it gets paid for administering the funds. In cases where neither the state nor a governing entity administers zakat, Muslims can choose who to hand funds to, like nonprofits such as the Islamic Relief Worldwide.
NGO constraints to collecting zakat
The Islamic Relief Worldwide has been collecting zakat since its founding 31 years ago. It mainly raises funds through zakat in the “global north.”
It has ventured into raising funds through zakat in Malaysia but found it “quite difficult” to do it actively because collecting zakat is a government function there, according to Sadia Kidwai, policy and research analyst at IRW. One option it has explored is to approach zakat collecting agencies, offering to become an implementing body of zakat-funded programs.
In general, IRW often faces questions about whether, like governments, it can actually take a portion of the zakat to pay for the costs of collecting and administering it.
“This is something that we had to consult with scholars on and actually a lot of scholars have said ‘well, actually you are a legitimate authority because you are collecting zakat so it's fine if you take some money from your running costs,’ and that makes it a lot easier for us because we can make our zakat program more practical and sustainable,” Kidwai said.
A global policy on zakat
IRW has been talking with a range of Islamic scholars across the globe over the past year to develop a global policy on zakat. The policy is due out in June or July this year.
According to Kidwai, the goal is to provide consistent guidance to staff and Muslims alike on how and where to use it.
“What we realized is that although zakat is the third pillar of being a Muslim, for many Muslims, it doesn't even feature in their day-to-day thinking because there's maybe just a lack of awareness about it, a lack of guidance around it,” she told Devex. “And we realized that as Islamic Relief, as we're getting bigger, as we're getting more experienced, maybe we have quite an important role to play in educating people and providing that guidance to people so that we can encourage more zakat to be paid.”
The goal of boosting zakat is not just about raising more money; more importantly, according to Kidwai, it’s to make sure that Muslims are performing their duty. Islamic text dictates that it’s the right of persons in poverty and need to receive zakat and they “can hold us to account if we don't pay.”
The policy thus “is a service on both sides: It's service to the zakat recipient because it's giving them what they're entitled to and it's service to the zakat payer because you're helping them to dispense a duty,” Kidwai said.
Backed by opinions of Islamic scholars, the policy intends to debunk myths surrounding zakat. For instance, because zakat is collected every year, some believe it should be used also within that time frame.That puts a lot of pressure on collecting agencies especially when the funds collected are massive.
Although it is ideal to dispense zakat quickly, there’s no Sharia requirement on the period to use zakat; rather, the rule of thumb is to spend zakat in a way that is most beneficial to the people in need, whether that be within two, three or five years.
Once complete, IRW intends to share the findings with the its peers and the public.
“Because we very much feel that this policy, you know you're talking about stuff that comes from the Quran, you're talking about guidance that's come from scholars, it's not Islamic Relief's right to keep that private from other charities,” Kidwai said. “If other people can benefit from that, then we definitely want to enable that and facilitate that.”