In the name of Allāh, Most Gracious, Most Merciful

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A Position Paper : UK Muslim Charities, can we do better?

A POSITION PAPER : UK MUSLIM CHARITIES, CAN WE DO BETTER?

 

Background information

Over the last quarter of a century, the number of Muslim charities, i.e. those charities which accept zakāt donations, in the U.K. has mushroomed, this includes Muslim/ Islamic charities. Many people have become disillusioned with many of the operating methods of these charities. Many charities have become like industrial businesses. A considerable portion of the actual donations are used for promotion and self-perpetuation and these actual amounts involved can be very large indeed.

Indeed the donations used by a charity for its own running costs can be a concern where the donations include zakāt. In order for the donor of zakā to fulfill his or her religious obligation, all the zakāt that he or she donates must reach those eligible for zakāt in full, otherwise the duty is not discharged.

According to a report in 2012 Islamic financial analysts estimated annual zakāh spending exceeded US$200,000,000,000 per year compared to total global humanitarian funding in 2011 of just US$13,000,000,000, according to the UN's Financial Tracking System. Yet about a quarter of the Muslim world continues to live on $1.25 a day or less. Islamic scholars and development workers state that much of this zakāh practice is mismanaged, wasted or ineffective.

Currently, there are over 3,000 Muslim charities in the U.K where the adult Muslim population is only around 2 million. This equates to 1 charity per 670 Muslim adults. This is hard to justify. Most of the charities have the same objectives and work in the same countries.

An unnecessarily large amount of donated funds are used in the administration, running costs, salaries, promotion events etc. by the unusually large number of charities which could be easily reduced if the number of charities were to reduced. The amount of zakāt donation as a whole will, of course, not be affected as that is an obligatory duty.

 

Proposal

In order to make the whole system of Muslim charities in the UK more efficient and reduce the wasteage of funds the following is proposed as initial steps to improve the whole system.

1. When donating zakāt only donate to charities which have a track record of 100% donation policy in place.

2. All those who are employed and pay zakāt should pay their zakāt through their employer where possible using Payroll Giving, this will greatly benefit the donor while at the same time denying the recipient charity any Gift Aid.

3. Those who have a private company should pay their zakāt from the company account, as the zakāt is paid before taxation this will be beneficial to the company owner and also deny the recipient charity any Gift Aid.

4. The effect of denying the recipient charity Gift Aid will mean many charities which have been set up merely for the sake of acquiring Gift Aid will need to reconsider if it is worthwhile continuing to exist or not.

5. Another option which would be difficult to set up as it would require considerable cooperation is to designate a UK charity which has no administrative/ salary costs etc. (i.e. is run purely by professional volunteers for the sake of the UK Muslim community) which receives all zakāt donations from UK Muslims and then distributes these funds to other UK Muslim charities to distribute the funds as they already so. The cost and running of these selected distributive charities would require a rethink over time.

All comments/ suggestions welcome.

 

Dr. A. Hussain