What does Zakat-Eligible mean?
I have served hundreds of clients over the years with Islamic Estate Planning. This means providing advice on all kinds of assets and integrating planning with values. One of those values, indeed a fundamental act of worship and a pillar of Islam, Zakat, seems to be on the verge of crumbling into nothingness. This is a fundamental value for Muslims. Don’t let it slip away. Unfortunately, there are no uniform standards and charities can do or say whatever they want. So you need your own standards.
Asking for Zakat
I occasionally write on a website, MuslimMatters. They started to ask for Zakat since they count what they do as “dawa” (though not everything is, that is another story) despite my prior criticism of non-profit corporate practices in the past. Zakat has become a way for the affluent to donate to benefit the well-off. We forget the poor and needy. They don’t often fit into the plans of many nonprofits who want Zakat funds to pay their overhead. Indeed, if Zakat were distributed efficiently, as my recent article shows, poverty could be eliminated completely. Obviously, it has not been.
My article, written with Sh. Osman Umarjee (who has partnered with me on other Zakat articles) is entitled “This Article Could be Zakat Eligible.” Please check it out and share it with your friends.
Advice On Selecting Charities
You should not rely on other people (including Shuyukh) to tell you where to donate. It is rare that an Imam is going to go vet a charity’s finances and overall strategic plan. Most of the time, endorsements will be in the “he is a good brother” genre of recommendations. That should frankly not be good enough. There are no real standard accreditations for Zakat-eligible, literally, anyone can slap that label on themselves for practically anything perceived to be a social good. There are no standards, no accountability. However, you should have your own standards.
A few things to look for when evaluating charities
- Does the charity publish Zakat distribution policies?
- Is everything the charity does Zakat eligible? Stay away.
- Does the charity have a policy on segregating Zakat funds?
- Does the charity have a policy of not using Zakat funds for overhead? This is not a deal killer, it may be part of having a sustainable operation and Allah expressly permits it in the Quran. If there is an endowment that pays for overhead or if it is a small, well-run volunteer operation, bonus points.
- Are there independently-audited financial reports? If they do, read it or have it read by a trusted friend who likes reading these things.
- Read the organization’s 990, is something out of whack? Note Masajid don’t file 990s. However, they should make their financials available if you are going to donate to them.
- Does the charity use Zakat funds only to benefit the poor and needy (that may include services)? There are other legitimate criteria, but you should focus on the poor and needy when there are so many.