What Makes a Nonprofit Organization Zakat Eligible?

Are all nonprofits eligible for Zakat?

No.

The Texts of Revelation – meaning the Quran’s verses and prophetic reports – set well-defined limits on ‘Zakat al-Mal’ (obligatory ‘Alms on Wealth’) in all three of its phases – assessment, collection, and distribution to divinely designated recipients.

Can any charitable organization collect Zakat?

No.

In our present circumstance, only Muslim organizations that carefully comply with Zakat’s established rules in each of the three aspects just mentioned can rightfully take in Zakat and distribute it.

Do all Muslim nonprofits that collect Zakat follow Zakat’s rules?

‘Rightfully,’ in the previous answer, is the keyword. Practically, many Muslim organizations (and, increasingly, non-Muslim ones) claim Zakat-eligibility for themselves or their programs.

Realistically, this means that you, as a Zakat-payer, must develop three mental and practical habits to ensure you properly fulfill your obligation to God and to the Zakat-eligible in remitting you Zakat:

  1. Educate yourself about Zakat and its requirements. Alternatively (and probably as part of your education about Zakat), locate a reliable, knowledgeable resource you can turn to, to ensure you meet your Zakat duty.
  2. Diligently question Zakat-collecting organization representatives regarding their claims of Zakat-eligibility for their institution and particular programs. Ask them for the rationale, or scholarly proofs, that justify their rightful collection of Zakat for their stated purposes.
  3. Determine how a Zakat-collecting agency will actually use your Zakat payment and what designated recipients or uses it will reach or be put toward.

How is Zakat Foundation of America unique in this?

First, Zakat Foundation of America’s founders established it (in accordance with American nonprofit law in 2001) for one explicit purpose: to create a global Zakat-collecting and -distributing humanitarian organization. The intention behind it was two-fold:

  1. To enable Muslims to easily and correctly fulfill this Third Pillar of Islam, which stands alone as a unique, individualized hybrid obligation of worshipping God and purifying one’s wealth. Zakat is first and foremost a rite of worship in Islam on each and every Muslim who does not have an exemption. Alongside this, it is an annual financial duty to God and the needful (see Why Muslims Pay Zakat).
  2. To uplift Zakat-eligible Muslims and humanity, near and far, with their God-given right to the obligatory alms of Zakat and Zakat Al-Fitr, along with voluntary sadaqah-charity, from the wealth that God has invested for them with their brothers and sisters in possession of wealth (see What Is Zakat? and What Is the Difference Between Zakat and Sadaqah?).

How does Zakat Foundation achieve this?

From its birth in 2001, Zakat Foundation’s architects have consciously anchored it in three solid cornerstones:

  1. scholarship: The great tradition of Muslim learning – as transferred and interpreted by the foremost scholars of Islam, Zakat, and finance in our time as it relates to Muslims now – underpins all Zakat Foundation’s work. Every avenue of Zakat Foundation’s Zakat collection and distribution is examined for eligibility and approved by qualified scholars of specialized knowledge.
  2. Partnership: A growing network of locally based and international humanitarian partners enable Zakat Foundation to reach the impoverished, afflicted, and deserving directly. This eliminates go-between agencies and services that waste precious Zakat and charitable dollars. Every penny of Zakat Foundation’s Zakat collection goes to the eight Zakat-eligible classes of recipients designated by the Quran.
  3. Teaching: A commitment to develop programs that make Zakat Foundation (1) a well-tuned vehicle of timely public education about all things Zakat, (2) a clearinghouse of easily-accessible knowledge for Zakat payers, and (3) a source of public literacy about the inspiringly broad varieties of sadaqah, voluntary charity, available to and for all people to fulfill (a) our godly purpose as worshippers and (b) the most humbling and urgent humanitarian and social justice needs crying out for help in the world.

These public education programs about Zakat and sadaqah include a full range of publications locally and internationally across all media and institutional platforms: in-print and internet books, articles, news reports, and press releases; public speaking; conference organization and participation; robust nonprofit sector association and involvement; governmental charity-related assessment, appraisal, and advocacy; and specialized social media humanitarian awareness campaigns.

Who Receives Zakat from Zakat Foundation?

Zakat Foundation distributes Zakat to the eight categories of eligible people set by God in the Quran (see Surat Al-Tawbah, 9:60):

  • The Poor (in dire need but prevented from asking)
  • The Indigent (whose destitution drives them to ask)
  • Those Administering Zakat’s collection and distribution
  • Those whose hearts are to be reconciled
  • Those in bondage and captives (this includes slaves to be freed – and yes, they still exist – and their modern-day equals, forced laborers, detained migrants, the labor-interned, etc.)
  • The Debt-Ridden
  • In the Cause of God
  • The Wayfarer (the stranded, displaced (including the homeless and refugees), or those cut off from resources while traveling)

What Does Zakat Foundation Do with Your Zakat?

The poor and indigent hold the two top priorities of Zakat Foundation’s Zakat distribution. These are the people in desperate need that the Zakat Foundation’s aid specialists focus on distributing your Zakat to.

When you pay your Zakat through the Zakat Foundation, you are sending your charitable offering directly to widows and orphans; refugees, the displaced of war, and victims of communal violence; and to families struck by disease, earthquakes, storms, drought, climate change, and other natural disasters.

Can you give a recent example of what Zakat Foundation has done with the Zakat and Sadaqah it has received?

Yes, here are two:

Pandemic & Protest Emergency Food Aid

In these signal times of converging pandemic and anti-racist protest (January through June 2020), Zakat Foundation supporters and relief workers have distributed more than a million tons of fresh, farm-picked produce to communities in need across America, most of it in just the three months from April through June, or in the Hijri Islamic lunar year of 1441, from the holy month of Ramadan to the sacred month of Dhu’l Qi’dah (times when good deeds, including charity, count for more in the Heavenly Scales).

Note that this charitable aid not only helped impoverished, entrapped people closed off in our nation’s food deserts, it also aided struggling farmers in the economic throes of coronavirus lockdowns plowing-under their unsellable, not distributable food crops.

medical PPE for exposed frontline workers

From March onward in this same time frame, the sacred month of Rajab and in Sha‘ban of the Islamic Year, Zakat Foundation leaders procured tens of thousands of medical PPE items (personal protective equipment, including masks, gloves, gowns, etc.) for frontline healthcare and essential workers in desperate need of these lifesaving articles, in critically short supply.

Not only did Zakat Foundation principals go to great and innovative lengths to obtain these PPE components, they saw to their distribution in the places and to the people who needed them most:

(1)  Hospital staff and clinicians in our country’s scandalously undersupplied Safety-Net Hospitals – like Roseland Community Hospital and St. Bernard Hospital on Chicago’s deeply impoverished South Side, and their like elsewhere in the nation – from coast to coast.

Designated Safety-Net Hospitals (SNHs) are those that “by mission or mandate, provide care to a substantial share of vulnerable patients regardless of their ability to pay,” according to The National Academies of Sciences, Engineering, and Medicine.

The facilities Zakat Foundation used your donations to supply with PPE served upwards of 80% poor and indigent populations.

(2)  Essential workers, disproportionally from the African American and Latino communities, inordinately struck first by COVID-19 in terms of infection and death because they lived in healthcare deserts and did not have the economic support to work from the safety of home and quarantine, and then hit again by the police-killing of George Floyd in Minneapolis and the police actions against the urgent eruption of anti-racist protesting. Zakat Foundation focused its PPE aid on these frontline workers in Minneapolis, New York, Chicago, St. Louis, Houston, East Oakland and many other locations of dire need.

How much of that charity reaches its intended recipients?

Zakat Foundation uses 100% of your Zakat offerings for Zakat-eligible causes. Your Zakat payments reach the most needful people in the world, at home and abroad.

Last year, Zakat Foundation used 11 cents per Zakat dollar on average as designated Zakat administrators working to collect and distribute your Zakat directly to the world’s impoverished, war ravaged, and disaster stricken. That’s below the allowed limit of 12.5% for Zakat’s collectors.

But the important point here is that even the 11 cents per dollar goes to purifying your wealth and fulfilling your Zakat obligation. All of it counts as Zakat for its payers because Zakat Workers are the third of the eight categories of divinely designated Zakat recipients, with some scholars saying that the Quran’s list of Zakat designees appears in order of Zakat priority, and it is the Zakat collectors and distributors that make the institution of Zakat possible.

What should I know and be careful about in evaluating a Muslim nonprofit for Zakat eligibility?

The eight exclusive categories of “people” that God has designated in the Quran as eligible for Zakat payments exclude all other persons and every other kind of need, in general (see Surat Al-Tawbah, 9:60).

So organizations or utilities not owned by any person in particular (mosques, schools, public works, properties, and general deeds of benefit to people) do not lie within Zakat’s divinely delimited bounds. Therefore, such institutions and programs do not qualify for Zakat. This is the long-standing, majority position of Muslim jurists (see Can Zakat Be Paid for a Mosque?)

What else should I look for in particular regarding an organization’s Zakat eligibility?

Many organizations claim that the seventh divinely designated Zakat category — “in the path of God” (fi sabili’Llah) – qualifies them or their programs as “Zakatable,” or eligible to receive Zakat.

But this inclusion is restricted and should not be viewed as a “catchall” exemption.

It hinges on two primary understandings of the intent of the Quranic phrase “in the path of God” (fi sabili’Llah) as it is used in the Zakat verse of Surat Al-Tawbah, 9:60. One understanding, which is a restricted minority opinion, interprets this phrase linguistically and thus literally as inclusive of all virtuous activities and good deeds done in the service of God.

The vast majority of scholars (rightly) reject this understanding because the Zakat verse lists specific Zakat-eligible categories, and “in the path of God” (fi sabili’Llah)” in its general linguistic sense encompasses the other seven categories. Rather, “in the path of God” (fi sabili’Llah)” strongly connotes a particular activity to the point that it has always been widely recognized as synonymous with ‘physical struggle’ in the path of God.

This is the one meaning that all scholars accept for this category based on its clear contextual interpretation as it occurs in the Quran, in general, and in this verse in particular, and as demonstrated in the use and understanding of this phrase by the first generation of Muslims, that is, the Prophet, on him be peace, and his Companions, God’s mercy on them, and by every generation of Muslims thereafter. These scholars uphold that Zakat cannot be paid to these other kinds of virtuous works, to a mosque, for example.

Are there scholarly exceptions to this exclusion of Zakat?

Yes. The hallmark of Islam is balance.

Some scholars of the majority opinion — that “in the path of God (fi sabili’Llah) in the Zakat verse is synonymous with ‘physical struggle’ to elevate the Word of God – extract from this the ‘intent’ of Zakat’s seventh category as its governing rule.

This is not to be interpreted as all-inclusive, and it is tempting for nonprofit Muslim representatives to see their missions and work in this light. Rather, this ruling specifies cultural, educational, and informational struggle – waged against forces that have the capacity and intent to extinguish Islam as a faith in a region or country, or to distort it beyond comprehension from its original beliefs, morality, and practices – as Zakat-eligible under this seventh category.

Indeed, some scholars see such work among Muslims today as this seventh category’s primary application. Shaykh Yusuf Al-Qardawi writes in Fiqh az-Zakat that the organizations and programs that qualify are those in communities facing the existential threat just described, and which “provide correct and pure Islamic information to men and women throughout [meaning ‘anywhere in’] the world … even in Muslim countries, [and which serve] to provide Islamic education and training” to all people, and to “protect the faith of [Muslims] from deviation, agnosticism, and behavioral corruption.”

What advice do you give in this regard?

Zakat is a vital practice and duty in Islam. The Quran frequently conjoins it with its sister Pillar, the Salat-Prayer, as required to gain God’s grace and admission to the Garden of Paradise in the Hereafter.

As such, contemporary Islamic scholars have advised Muslims, in the absence of qualified polities and governance, to establish Zakat entities that collect and distribute Zakat in accordance with the commands of the Quran and the example of the Prophet, on him be peace.

This is precisely what the Zakat Foundation of America is and what it does.

To calculate your Zakat payment today, use our Zakat calculator here.

Give sadaqah, voluntary charity, today.

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