http://www.maeeshat.in/2015/06/need-to-streamline-zakat-sadaqah-administration-in-the-world/
http://www.dailyo.in/politics/zakat-sadaqah-syed-zafar-mahmood-zakat-foundation-of-india-islam-muslim-shariah-csr/story/1/4488.html
http://www.milligazette.com/news/12581-need-to-streamline-zakat-sadaqah-administration-in-the-world
http://twocircles.net/2015jun21/1434889893.html#.VYaux_mqqko
http://muslimmirror.com/eng/need-to-streamline-zakat-sadaqah-administration-in-the-world/
http://www.siasat.com/english/news/need-streamline-zakat-sadaqah-administration-world
http://article.wn.com/view/2015/06/22/Need_to_streamline_Zakat_Sadaqah_administration_in_the_world/
Dr Syed Zafar Mahmood, President, Zakat Foundation
of India
ZakatIndia.org info@zakatindia.org
Circulation of wealth: Zakat & Sadaqah
Bringing about economic equality through circulation of wealth in the
society is one of the fundamental objectives of Islam. The
instrumentality prescribed to achieve this goal is popularly known as
Zakat that is considered, like Namaz or Salah, as a prescribed mode of
mandated worship. Zakat is yearly donation of 2.5% of the individual's
wealth plus annual savings. The eight heads of distributing Zakat are
defined in chapter 9 verse 60 of the holy Quran. These are (i) the poor,
(ii) the needy, (iii) those employed to administer the funds, (iv) those
whose hearts have been recently reconciled to Truth, (v) those in
bondage (literally and figuratively), (vi) those who are in debt, (vii)
in the cause of God and (viii) for the stranded traveler. Such deserving
persons are identified and helped by individual or organized effort.
A deeper understanding of Quran, however, reveals a wider methodology of
the circulatory mechanism of the society's wealth. As against Zakat the
term Sadaqah has a more far-reaching connotation. In the above-referred
verse 9.60 also, the term used to indicate charity is Sadaqah though, as
per general consensus, this specific verse has been accepted the world
over as the divine instruction for Zakat heads. On the other hand,
Sadaqah is ordinarily considered as optional charity and most of the
Muslims - though erroneously - do not attach much importance thereto
except sporadically giving away very small amounts (much less than one
percent) of their financial holdings.
Qulil Afwa
In this context we must appreciate that if the economically higher
ranked 15-20% of the community contributes only 2.5% of its wealth and
savings that would not suffice to lift the remaining 80-85% of the
people to a higher economic status aspiring to be in the vicinity of the
one enjoyed by the top 15-20%. That is the reason why God has emphasized
the significance of voluntary charity that is broadly referred to by
Muslims as Sadaqah. But here is a catch. Most of us Muslims are not
aware that God has also prescribed a directive principle for us to
decide as to how much we should volunteer to donate as Sadaqah on top of
Zakat. Here comes the principle of Qulil Afw as indicated in the Quran
(2.219). Says God: O Prophet (S), they ask you as to how much should
they spend in the cause of Allah; say, whatever remains after taking
care of yourself and your dependents. Thus, God has minced no words in
His prescription. In fact, before closing the conversation, He adds,
"Thus Allah makes clear to you the verses of revelation so that you give
thought."
In this way, Islam's mechanism of redistributing the community's
earnings and wealth begins from Zakat and completes with 'Sadaqah to the
extent of Qulil Afw'. Daily five times prayers generally consume not
more than one hour of the individual. But these prayers provide the
spiritual skeleton on which the human body must rest during the
remaining 23 hours. Likewise, Zakat is the fundamental indicator to
facilitate the comprehensive human understanding and action. The spirit
of Zakat must permeate the remaining 97.5% of the individual's earnings,
savings and wealth. God says, out of that, spend on yourself and your
dependents as much as is required, but whatever remains does not belong
to you and must be spent on those who need to be helped. Such a matrix
of compulsory and benevolent charity would keep the community
economically robust. However, meshing with the broader divine mandate,
it is the extent of voluntary charity that would decide the worth of the
individual in the divine evaluation.
Islamic charity matrix: panoramic view
Being aware of this panoramic appreciation of Islam's emphasis on
charity yet, for purposes of linguistic convenience, naming it largely
as Zakat, the world administrators of Islamic charities assembled in the
Indonesian port city of Banda Aceh recently (8-10 June 2015) and
mutually agreed to the core principles for Zakat's good governance,
safety net, strong legal foundation, international collaboration, risk
management and financial integrity. The draft of these principles was
discussed, debated and amended at the international seminar. Thus the
following was agreed to.
Core principles of Zakat administration
The Zakat organizational activities must comply with the Shariah
regulations (under the watchful eye of a Shariat advisory body) as well
as the country's constitutional and legal requirements; it should
cooperate with the authorities concerned. Latest accounting standards
and integrated tools of information technology must be deployed to
collect, process, disburse, monitor and analyze the receipts and
expenses. These may include Zakat, Infaq, Sadaqah and other similar
religious charitable funds. The amounts pertaining to the Corporate
Social Responsibility (CSR) fund may be classified as Infaq and may also
be collected and managed by the same organization that should have a
comprehensive internal control system. The Zakat organization should
ensure standard book-keeping and preparation of financial statements in
accordance with the accounting practices that are widely accepted at the
national and international levels. The accounts must be annually
audited. The financial statement should be issued annually to the public
and should bear an independent external auditor’s opinion. The
activities of the organization must be regularly reflected on its
website for use by the general public. The administrators need to be
properly qualified, trained, experienced and of proven integrity. All
required legal reporting to the Government must be punctually complied
with. Manpower must be honest, trustworthy, upright, and virtuous. They
should be having character, integrity and the basic knowledge of
Shari'at and financial accounting. Instances of administrative or
financial indiscipline need to be firmly dealt with in time; these may
include imposing fines, penalties and sanctions. The administrative and
personnel cost should not exceed 1/8th or 12.5% of gross amount
collected.
Trained personnel
The Board should approve, actively direct and oversee the implementation
of the prescribed policy and rules and maintenance of Islamic culture
and values through the prescribed code of conduct. The quality of
officers needs to be ensured by insisting on proper certification and
should be improved through in-service training. They should study the
prevailing price index and should accordingly announce the non-zakatable
exemption limit (nisab) depending upon the sources of income or the
extent of property accumulation in the light of the shari’ah. It should
have appropriate policy and process for regularly evaluating the various
types of zakatable assets and their classification. It should make the
collection proactively. And should advise regarding the period of normal
Zakat donation as well as in times of disaster. It should identify the
Zakat liability from new forms of wealth not known in the early days of
Islam, e.g. the joint-stock company or corporation.
Consumptive & Productive Programs
The organization should formulate policies and processes for utilizing
the Zakat, Sadaqah, Fitra, Infaq for the prescribed beneficiaries. It
should have proper financial planning, recording and management to
prevent mismatch of fund allocation. The donated amount should be
utilized for both consumptive and productive programs. Consumptive
programs aim to fulfill short term basic needs of mustahiks (deserving
persons) while productive programs aim to empower the mustahiks to
cultivate long term socio-economic resilience. The inter se proportion
of consumptive and productive programs should be periodically decided on
the basis of socio-economic and environmental analysis of the area of
operation. The organization should aim at targeted higher reading of the
social benefit indicators that must be achieved in the planned
timeframe.
Priority scale & Hadd-al-Kifayah
The Zakat organization should devise a suitable procedure to decide a
priority scale of the eight prescribed heads of expenditure. The poor (fuqara)
and the needy (miskeen) are the most needy groups that must be given the
first priority and large amount in the distribution of zakat.
Taking into account the macroeconomic conditions of the area of
operation the Zakat organization should prepare a priority scale of
recipients through poverty level or the calamity impact, as the case may
be. It may review the range of activities by identifying a clear
definition and assessment of the eight heads of expenditure. It should
have adequate socialization and education programs to enhance the public
awareness about Zakat. It should adopt a standard 'hadd-al-kifayah'
representing adequacy to meet the individual requirements and may, for
this purpose, collaborate with other similar facilities such as Islamic
banking and Awqaf. The Zakat organization should have an appropriate
internal process for preempting and dealing with potential fraud,
technical failure of the IT system, and any other factors that are
likely to vitiate the normal organizational operations.
Consensus & adoption
These core principles will also be shown to well known Islamic
international bodies like the Islamic Development Bank seeking their
concurrence and will then be passed on to all Islamic countries and
societies to be considered for adoption and adherence.
