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Charitable giving in Islam1

Fundraising | Fadi Itani | 26 Jul 2012

Muslim commitment and potential to support charitable causes in the UK should not be underestimated, says Fadi Itani.

As the Islamic holy month of Ramadan commences, in this year from 21 July, millions of Muslims in the UK will be fulfilling a fundamental part of their faith by donating a proportion of their wealth to charitable causes around the world. The general concept of Zakat is well known, yet even among many Muslims the detail and intricacies of this spiritual act of giving are not fully understood.

Understanding Zakat

Zakat is the compulsory form of charity for all Muslims based on the amount of wealth they have held over an Islamic year (the Muslim calendar is based around the moon and lasts for either 354 or 355 days). For Muslims, Zakat is not simply a form of charitable giving but rather a means of achieving spiritual, moral and social objectives - a path to ‘purification’ of a donor’s wealth and a mechanism to redistribute income to the poorer elements of the Islamic economic system.

Each year, every Muslim is compelled to pay 2.5 percent of their wealth should they be in possession of the minimum amount of wealth on which Zakat is due (known in Islam as the nisab.)

Zakat is the third pillar of Islam and is closely aligned to the second pillar of Salat (prayer). It is a mandatory act of worship for Muslims and is considered both an obligation to God and an enshrined moral duty to the poor.

Common misconceptions

Zakat is commonly paid by Muslims during the holy month of Ramadan - the Islamic time of fasting and a period of intense spiritual reflection and worship. Zakat paid during Ramadan is believed to increase rewards given to the individual, as declared by the Prophet Muhammad (pbuh).

However, this standard practice by the majority of Muslims tends to counteract the true spirit of Zakat. When Zakat payment is due – i.e. if an individual has been in ownership of the minimum “Zakatable” wealth for one lunar year – then it must be paid on time and not delayed, even if rewards for charity are increased during Ramadan.

Traditionally, Zakat distribution would not be concentrated in one period but rather spread over a length of time so that recipients could be supported throughout the year. The early history of Islam also indicates that the collection and distribution of Zakat would normally be dispersed regionally to beneficiaries in the same surroundings. Today, Zakat donations are commonly distributed to international causes such as poverty alleviation or helping people meet their basic needs.

Zakat contribution to global development

While data on Zakat flows is limited, attempts to chart the potential of this form of giving are emerging. Islamic financial analysts recently estimated that each year, somewhere between £130bn and £645bn are given as mandatory and voluntary donations across the Muslim world. At the low end of this estimate, this is 15 times more than global humanitarian aid contributions in 2011.

Several governments in the Muslim world have made efforts to centralise the management and distribution of Zakat donations. In Malaysia, a massive £286m was collected in Zakat donations in 2010, while in Egypt the government estimated that £480m was given to charity by Egyptians in 2009, enough to pull nearly all of Egypt’s poor out of poverty in strictly financial terms.

Shifting mindsets

At Zakat House, the UK’s first charity dedicated to the collection and distribution of Zakat funds, we are aiming to better inform Muslims on the objectives of Zakat and redress the flow of funds to under-resourced causes based in the UK. We believe that Zakat donations have huge, unfulfilled potential to make a greater difference to charities in the UK in line with the true teachings of the Prophet Muhammad (pbuh).

Our recently launched ‘Just Zakat’ campaign aims to alter donor perceptions of Zakat, and allows them to spread their Zakat over several worthy causes based in the UK and abroad in line with the categories of recipients entitled to receive it.

Currently, five charities make up our coalition of organisations eligible to receive funds under the Just Zakat banner, with two of these focused on providing services to beneficiaries in the UK.

Our website is growing and we are aiming for it to become an extensive resource base on the virtues and practical application of Zakat, as well as dispelling common myths and misconceptions associated with this religious concept of giving.

We are constantly on the look-out for other small and pioneering charities in the UK eligible to join and receive donations within our coalition group.

For more information about our campaign and to see how you can get involved, please visit the Just Zakat website.

Fadi Itani is the CEO of Zakat House a central collection organisation for Zakat in the UK.

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