The Power of Zakat as a fundraising strategy.

Diaspora organizations around the world are adopting diverse ways of raisings funds for supporting people in humanitarian crisis. Muslim faith-based organizations, such as Transparent Hands, are using the system of Zakat to provide immediate humanitarian relief for people affected by conflicts or natural disasters.

According to a report by the University of Birmingham, the global value of Zakat is estimated to range from US$ 200 billion to US$ 1 trillion per annum across the world or around US$ 187 million among countries in the Organization of Islamic Cooperation.

The latest Islamic Philanthropy report of the UNHCR has shown that Islamic Zakat donations in 2020 saw a big increase compared to previous years, amounting to $61.5 million for the UNHCR Refugee Zakat Fund, reaching more than 2 million displaced people across the world. 

“Zakat donations increased by 12.5% in 2020 in comparison to 2019, triggering a much higher increase in the number of Zakat beneficiaries, which grew by 59% compared to 2019,” UNHCR states. 

Over 80 million people worldwide are forcibly displaced from their homes with over 50% of them originating in member countries of the Organization of Islamic Cooperation (OIC). The COVID-19 pandemic has worsened their situation even further. Zakat donations collected by diaspora organizations help to support affected populations in dire need.

What is Zakat?
As one of the pillars of Islam, zakat – also known as ‘almsgiving’ - is a religious obligation, not a voluntary charity. The word literally means ‘to cleanse’. Muslims believe that paying zakat purifies, increases and blesses the remainder of their wealth and acknowledge that everything a Muslim owns belongs to Allah. Zakat is a payment made annually under Islamic law and used for charitable and religious purposes.

Who must pay Zakat?
Zakat is compulsory for every Muslim adult. Zakat is 2.5% of wealth that has been in one’s possession for a lunar year. If wealth amounts to less than a threshold figure, termed the Nisab, then no Zakat is payable. If wealth amounts to more than the Nisab, Zakat becomes obligatory. 

What is Nisab?
Nisab is the term for the threshold figure at which point Zakat becomes obligatory. If wealth amounts to less than the Nisab, then no Zakat is payable. Nisab is the minimum amount of net capital that a Muslim must possess to be eligible to pay Zakat, which is prescribed as the equivalent of 87.48 grams (7.5 tola) of gold and 612.36 grams (52.5 tola) of silver, respectively. (As Gold and Silver prices can fluctuate, please verify these numbers with your local Imam).

Which of the possessions qualify for Zakat?
Zakat must be paid on any assets above the Nisab. This includes cash, shares, pensions, gold, silver, business goods, money you lend to others, agricultural produce, and income from property investments.

Some scholars state Zakat is to be paid on all gold and silver (above the Nisab level), including jewellery, but not on other precious metals like platinum, nor on precious stones like diamonds. Moreover, others claim that mixed metals are only liable to Zakat if half or more of the metal is gold or silver. Other scholars argue that, if jewellery is owned by women for personal use only, and not used as an asset, Zakat is not obligatory. 

Who is eligible to receive Zakat?

There are eight kinds of people to whom zakat can be given as mentioned in the Quran (Al-Tawbah, 9:60):

• Al-Masakin: The poor who have no or low income
• Al-Fuquara: The needy who do not have a day’s food
• Those employed to distribute Zakat
• Anyone in slavery or captivity
• Anyone in unmanageable debt
• Anyone in the cause of Allah
• The Wayfarer: Stranded or struggling travellers
• Those new to the Muslim faith or friends of the Muslim community

One can also give Zakat to relatives. However, parents, children, spouse, siblings, and others with whom one has blood relations are not entitled to get Zakat.

When it is best time to pay Zakat?
Whilst Zakat can be paid throughout the Islamic year, it is believed the most reward is received during the month of Ramadan. However, if a person is paying Zakat in the first month of the year, he/she should pay Zakat at the same time next year i.e. after the year finishes. Therefore, there is no need not wait for Ramadan to pay Zakat. Once one becomes liable, you can pay your Zakat as the year ends.

How can I calculate my Zakat?
You can use a Zakat calculator to determine the amount of Zakat you will need to pay.

What is the difference between Zakat and Sadaqah?
Sadaqah is a form of charity that is short-term. Sadaqah differs wholly from Zakat in how it is paid, how it benefits those who receive it, and because it is a voluntary form of charity rather than obligatory. Where Zakat is used to help those in the here and now, a Sadaqah-compliant donation will continue to support project participants for years to come – even after you have passed. This is by giving something more than food and money on its own, it is providing the resources for communities to utilize time and time again.

Photos by Hussain Ali Ygu, Ayaneshu Bhardwaj, Hassan Almasi on unsplash.com