AN ACT OF FAITH

BRIEFING PAPER

AUTHOR: DATE:

March 2015

AN ACT OF

FAITH

Chloe Stirk

Humanitarian ﬁnancing and Zakat

Contents

Executive summary 3

Introduction 4

Glossary of key terms 5

1. Faith and humanitarian assistance 6

2. Zakat 7

What is Zakat? 7

How is it collected? 7

3. Relevance of Zakat to humanitarian response 8

4. What is Zakat worth? 11

CASE STUDIES: Saudi Arabia, Islamic Relief Worldwide 12

Untapped and growing potential scale of Zakat 13

5. How is Zakat spent? 13

CASE STUDIES: Indonesia,

The Zakat Foundation of America 14

6. The humanitarian potential of Zakat 16

Domestic response 16

International response 16

CASE STUDIES: Indonesia, Pakistan 17

7. Barriers to realising the humanitarian ﬁnancing

potential of Zakat 18

Logistical barriers 18

Ideological barriers 19

Other barriers 19

8. Conclusions and recommendations 20

Engage and share learning 21

Provide guidance 21

Improve channels between Zakat and the

international humanitarian system 22

Combine eorts with the wider development community 23

Increase Zakat revenues and channel new funds to

humanitarian assistance 23

Methodology 25

Acknowledgements 25

Notes 26

EXECUTIVE SUMMARY

All of the world’s major religions contain

some element of almsgiving, and faith plays

a key role in the funding and delivery of

humanitarian response across the world.

While we cannot say how much religiously

motivated giving takes place globally each

year, it is clear that faith-based organisations

mobilise and channel a signiﬁcant proportion

of global humanitarian assistance, and are

actively involved in its delivery. In 2013,

faith-based organisations received and

delivered between US$420 million and

US$434 million (15–16%) of all international

humanitarian assistance channelled through

non-govermental organisations (NGOs).

Islamic countries and those with large

Muslim populations are also becoming more

signiﬁcant humanitarian actors, as both

donors and recipients. Between 2011 and

2013, international humanitarian assistance

from governments within the Organization of

Islamic Cooperation (OIC) grew from

US$599 million to over US$2.2 billion,

representing a growth in the share of total

international humanitarian assistance from

governments from 4% to 14%. At the same

time, an estimated 75% of people living in the

top ten recipient countries of humanitarian

assistance in 2013 were Muslim.

Zakat, the mandatory Muslim practice of

giving 2.5% of one’s accumulated wealth for

charitable purposes every year, is one of the

main tools of Islamic social ﬁnancing.

It is explicitly intended to reduce inequality and

is widely used in Muslim countries

to fund domestic development and

poverty-reduction eorts. There are clear

parallels to be drawn between the eight

individual categories of eligible recipients of

Zakat listed in the Qur’an and people in need of

humanitarian assistance.

Zakat can be paid in a variety of dierent ways

to a variety of dierent institutions, either

governmental or non-governmental, often

depending on the country a Muslim lives in

or on their sect of Islam. There is no reliable

data currently available to show precisely how

much Zakat is paid by Muslims around the

world, or how it is spent globally. Yet data we

have collected for Indonesia, Malaysia, Qatar,

Saudi Arabia and Yemen, which make up 17%

of the world’s estimated Muslim population,

indicates that in these countries alone at least

US$5.7 billion is currently collected in Zakat

each year.

We estimate that the global volume of

Zakat collected each year through formal

mechanisms is, at the very least, in the tens

of billions of dollars. If we also consider

Zakat currently thought to be paid through

informal mechanisms, then the actual amount

available is likely to be much higher, and could

potentially be in the hundreds of billions of

dollars. By way of comparison, international

humanitarian assistance from government and

private donors in 2013 totalled US$22 billion,

while ocial development assistance (ODA)

from member countries of the Organisation

for Economic Cooperation and Development

(OECD)’s Development Assistance Committee

(DAC) was US$134.8 billion in the same year.

Our research also shows that between 23%

and 57% of Zakat currently collected is used

for humanitarian assistance, depending on

the context in which it is raised and used.

It is therefore likely that Zakat is already a

signiﬁcant source of humanitarian ﬁnancing in

many places, and there are indications that it

has the potential to provide considerably more

humanitarian assistance than is currently the

case. For example, evidence suggests that

the amount of Zakat potentially available in

both Indonesia and Pakistan could meet all

current requirements to respond to domestic

humanitarian emergencies, with signiﬁcant

amounts remaining to cover other areas of

Zakat spending.

However, there are a number of possible

barriers that will need to be overcome if Zakat

is to fully realise its humanitarian potential.

These fall into two main categories:

• LOGISTICAL – such as streamlining and

formalising how Zakat is collected, by

whom, and how it is channelled to the

humanitarian response community.

• IDEOLOGICAL – such as how best to

manage conﬂicting opinions on whether

non-Muslims can beneﬁt from Zakat and

where it can be used.

The question of whether non-Muslims can

beneﬁt from Zakat is central to discussions

concerning the compatibility of Zakat with

the humanitarian principles and will have

an impact on eorts to increase

international humanitarian assistance

provided through Zakat.

To begin to address these barriers, and

so maximise the potential volume and

eectiveness of Zakat for humanitarian

assistance, interested parties need to focus

eorts in ﬁve areas:

1) Humanitarian donors and agencies

should engage in discussion with

academics, Islamic scholars, theologians

and practitioners, and share learning

on the use of Zakat for humanitarian

assistance.

2) An independent and credible global body

that has taken part in these discussions

needs to provide guidance on the

parameters of reasonable interpretations

of Zakat.

3) Actors at all levels – including small,

local Zakat-receiving organisations,

national and international NGOs, and the

UN should work together to improve

channels between Zakat funds given and

the international humanitarian response

system.

4) Resource-mobilisation eorts should

focus on increasing Zakat revenues and

channelling new funds to humanitarian

assistance, rather than redirecting

existing funds.

5) Eorts to increase the use of Zakat

for humanitarian assistance should

be combined with those of the wider

development community to ensure a

complementary approach.

EXECUTIVE SUMMARY

INTRODUCTION

The gap between humanitarian need and

humanitarian funding is growing. The total

funding requested from international donors

within the United Nations (UN)-coordinated

humanitarian appeals system trebled in the

ten years between 2005 and 2014, more than

doubling between 2011 and 2014.

While

international humanitarian funding has

increased to record levels in response, the

ﬁnancing gap appears to be getting bigger:

the proportion of appeal requirements met in

2014 was the lowest since 2001 (58%), and

the volume of unmet requirements was the

highest on record (US$7.5 billion). According to

Valerie Amos, UN Under-Secretary-General for

Humanitarian Aairs, “Needs are growing so

fast, the funding cannot keep pace.”

The urgent question of how to ﬁll this

growing gap is being considered across the

humanitarian world, including in the World

Humanitarian Summit process and by the

recently announced High-Level Panel on

Humanitarian Financing. Many are actively

seeking innovative solutions, including the

Inter Agency Standing Committee (IASC)’s

Future Humanitarian Financing initiative, the

UN Oce for the Coordination of Humanitarian

Aairs (OCHA)’s private sector section

and Business in the Community (BITC)’s

International Disaster Relief programme. It is

clear that new funding will need to come from

a variety of dierent sources in order to meet

the scale of the challenge. However, much

attention is being paid to the role of business

and other private donors, such as individuals

and private foundations.

Individuals have long been major donors of

humanitarian funding, providing an estimated

17% of the total international humanitarian

response between 2008 and 2012. There is

likely to be further untapped potential in terms

of their giving capacity, as is evident with the

rise in philanthropy for charitable purposes

witnessed in both the United Kingdom (UK)

and the United States (US), where this type

of giving is well monitored.

One potentially

signiﬁcant area of charitable giving that has

received less attention in discussions around

the current humanitarian ﬁnancing crisis is

faith-based giving, and Islamic social ﬁnance

in particular.

Previous estimates suggest that anywhere

between US$200 billion and US$1 trillion is

spent in the form of Zakat across the Muslim

world each year,

and our evidence suggests

a signiﬁcant proportion of the money

collected is directed towards humanitarian

assistance. However, Zakat is a resource that

is not well understood by many organisations

and actors involved in the international

humanitarian response.

The aim of this report is to shed some light

on the purpose, scale and potential of Zakat

for ﬁnancing humanitarian response. It

will provide a basis on which to open up

discussions around how that potential might

be maximised – both by increasing the overall

volume of Zakat collected and improving the

mechanisms available to channel Zakat to

the humanitarian response. In the absence

of reliable or readily available data on Zakat

mobilised globally, the report draws on

evidence gathered through case studies and

existing research to provide an indication of

the scale of Zakat’s value and its potential

for humanitarian response. It outlines some

of the key barriers to increasing humanitarian

funding available through Zakat and to

improving the way in which it is channelled

to support the humanitarian response. It

also oers some recommendations for

humanitarian donors and agencies, and

those responsible for collecting and

distributing Zakat, to consider in overcoming

these barriers.

ALMSGIVING ACROSS THE WORLD’S MAJOR RELIGIONS

GLOSSARY OF KEY TERMS

Awqaf or waqf: A type of endowment and a

form of Islamic social ﬁnance.

Islamic: Of or pertaining to the principles of

Islam; following Shari’a law.

Islamic social ﬁnancing: A range of

ﬁnancial mechanisms employed by the

Muslim community that are designed to

promote social protection of the poor,

reduce vulnerability and increase economic

equality.

Muslim: A person who follows Islam (n.); of

or pertaining to the Muslim faith (adj.).

Mustahiq: Person receiving Zakat;

beneﬁciary of charitable giving.

Muzakki: Person paying Zakat.

Nisab: The threshold of wealth or assets

beyond which a Muslim is required to pay

Zakat.

Sadaqah: Voluntary charity, a form of

Islamic social ﬁnancing.

Zakat: A form of Islamic social ﬁnancing

through which all Muslims whose wealth

falls above a certain threshold are required

by the Qur’an to give 2.5% of their assets

each year to help people in need. Note that,

while the proportion a person is required

to pay remains the same, there is some

variation between Sunni and Shia Islam

concerning the payment and use of Zakat.

This report discusses Zakat as practised

by Sunni Muslims (around 87–90% of the

world’s Muslim population).

For the purpose of this report:

Islamic country refers to a country that is

governed in accordance with Shari’a law or

following explicitly Islamic principles.

Muslim-majority country refers to

a country in which the majority of the

population is Muslim, but which is not

necessarily governed in accordance with

Shari’a law or according to explicitly Islamic

principles.

Zakat is one of the few examples of

mandatory almsgiving to be found in

the major world religions. However, all

major religions involve some form of

voluntary almsgiving.

Christianity

The Christian church promotes charitable

giving as a religious duty, and almsgiving

is considered an essential part of Christian

stewardship and faithfulness.

Christians

are not required to donate a certain

percentage of their income to the poor, but it

is common to donate at some point during a

service and for a church to run appeals for

speciﬁc crises or charities.

Judaism

Tzedakah is translated literally as

‘charity’,

but its true meaning is closer

to righteousness and justice,

and it is

seen as a form of self-taxation rather than a

voluntary donation. Some sources suggest

that Jews are required to give tithes (one-tenth

of their income) to charity, a practice known as

ma’aser kesaﬁm.

Money is generally given to

the poor, healthcare institutions, synagogues

or educational institutions.

Hinduism

In Hinduism, giving is known as dān in

Hindi

and is built into all aspects of life.

Dān can be given as oerings to deities

(nirmalya), to individuals, to priests, spiritual

guides or teachers and institutions (NGOs).

Some scriptures suggest giving 10% of an

individual’s earnings to charity, with the

caution that a householder should never give

gifts beyond their means – they should not

make their family and dependents worse o

on account of their generosity.

Buddhism

According to Buddhist teachings almsgiving

is the ﬁrst of the Ten Perfecting Qualities

(Dasa Parami Dhamma) that helps a

Bodhisathwa to attain Buddhahood. It is also

the ﬁrst of the ten Meritorious Deeds (Dasa

Punna Kriya), the ﬁrst of the Ten Virtues of

a Good King (Buddhist Governance) (Dasa

Rajadhamma)

and the ﬁrst of the Four

Bases of Social Harmony (Sahgha Vatthu).

Almsgiving is also considered the highest

blessing in Buddha’s teachings (Mangala

Karunu). The concept of dān also exists in

Buddhism.

AN ACT OF FAITH

INTRODUCTION

Zakat is a mandatory form of alms for all

Muslims who are able to pay it, and is one

of the ﬁve pillars of Islam.

Through Zakat,

Muslims are required to give a proportion –

traditionally deﬁned as one-fortieth, or 2.5%

– of their accumulated wealth after it has

been in their possession for a lunar year for

the beneﬁt of the poor or needy (and other

recipients as highlighted in the verse of the

Qur’an, right), in addition to a small annual

payment (zakat al-ﬁtr) during Ramadan. Zakat

is payable by all Muslims, providing their

acquired wealth that year falls above a certain

threshold known as the nisab.

Muslims

whose wealth falls below the nisab are

encouraged to give Zakat in kind – this can be

in the form of goods, or by oering a service or

providing help to someone in need.

The word Zakat can be translated to mean

‘puriﬁcation’ or ‘growth’; through giving

Zakat, an individual is cleansing or purifying

both themselves and their remaining wealth.

Rather than being seen purely as a charitable

donation, Zakat is in fact the spiritual duty

of the Muslim, as a means of redistributing

wealth in order to restore social equality and

promote a more just society.

Zakat is the only obligatory form of a range of

dierent Islamic social ﬁnancing mechanisms,

all of which are intended to redress the

balance of equality in society. Others include

Sadaqah, a form of voluntary giving, and

Aqwaf, a type of endowment.

The overwhelming majority of Zakat is paid

during Ramadan, the holy month of prayer

and fasting, which is another of the ﬁve pillars

of Islam and a time of particular religious

signiﬁcance for Muslims in terms of fulﬁlling

their spiritual obligations. Thus the payment

of Zakat during Ramadan is seen as a way of

doubling the spiritual reward and beneﬁt for

the donor. Ramadan also provides a practical

marker or milestone relating to the lunar year

(the period over which Zakat should be paid)

and Zakat al-ﬁtr is also due at the end

of Ramadan.

Zakat can be paid in a variety of dierent ways

to a variety of dierent institutions, either

governmental or non-governmental, often

depending on the country a Muslim lives in or

on their sect of Islam.

Government-collected Zakat

In Islamic and Muslim-majority countries

where Zakat is collected and distributed

by the state, it can be taken directly from

an individual’s bank account or paid to the

state or a government agency each year. Six

countries have legally enforced payments

of the Zakat

; for three of these,

the

responsibility of the state for collecting Zakat

appears in the national constitution.

Where

taxation levels are relatively low, such as in

Kuwait and Qatar, Zakat resembles a form of

tax, as it is collected and managed by the state

in relation to a person’s earnings and used

to provide social welfare services or a public

safety net for people in need.

Independent collection

and delivery agencies

In some Islamic and Muslim-majority

countries, the government oversees the

collection and distribution of Zakat, but

independent agencies are given a license

to manage the process. This is the case in

Malaysia, for example, where depending on

the state (which are run by dierent sultans),

an individual can choose which approved

agency they pay their Zakat to.

In countries where Zakat is not managed

by the state and there is no governing body

overseeing collection and distribution,

Muslim citizens can choose how to pay their

Zakat and to whom. Many Muslims living in

Muslim-minority and/or non-Islamic countries

choose to pay their Zakat to charities or other

NGOs, which use the money to fund their

own programmes.

Mosques

Mosques collect large sums of Zakat,

particularly in non-Muslim countries with no

centralised or government-managed Zakat

collection agency, where the mosque may

represent an alternative form of Islamic

authority. Zakat collected by mosques may

be spent on the mosque itself – such as

on upkeep or renovations – or it may be

distributed by the mosque to local people in

need. Some may also be passed onto a third-

party organisation, such as an Islamic charity

or international NGO, to be used in support of

their work either locally or elsewhere.

Individuals

Some Muslims believe that Zakat should not

be paid via a third party; rather that it should

be a direct transaction between the person

giving (the muzakki) and the person receiving

it (the mustahiq). Many people therefore give

their Zakat directly, perhaps to someone in

need who lives within their community, or to

someone further aﬁeld with whom they have

connections. In this way, funds given through

Zakat may contribute to money sent abroad in

the form of remittances.

What is Zakat?

How is it collected?

2. ZAKAT1. FAITH AND HUMANITARIAN ASSISTANCE

Faith plays a key role in international

humanitarian response. Between 11% and

16% of NGOs listed in UN OCHA’s Financial

Tracking Service (FTS) as humanitarian

funding recipients in 2013 are explicitly guided

by faith-based principles. Seven of the 22

NGOs represented on the board that oversees

the Core Humanitarian Standard also have

an explicit faith-based ethos,

as do ﬁve of

the 13 NGOs that constitute the UK Disasters

Emergency Committee (DEC).

Often whether or not an agency has faith-

based principles is irrelevant to the activities

it carries out or the people it helps; most

humanitarian organisations operate in

accordance with the humanitarian principles,

meaning that they target assistance to people

based on need rather than membership of

a religious group. However, there are many

examples to show the active role that faith can

play in the delivery of humanitarian response.

In the Ebola crisis, for example, engagement

with local Muslim and Christian faith leaders

in aected countries was vital to ensuring

eective and trusted communication with local

communities.

Faith-based organisations also mobilise and

channel a signiﬁcant proportion of ﬁnancing

for global humanitarian assistance. Most

major religions have an element of charitable

giving (see box on page 5), and many faith-

based organisations actively fundraise

through faith communities, being seen as a

trusted and like-minded channel for religiously

motivated givers.

If the ﬁve largest Christian and Islamic

humanitarian agencies were classed

alongside international donors, their combined

private humanitarian assistance of US$396.7

million would have made them the 14th

largest provider of humanitarian assistance

in 2013. According to FTS data, in 2013

between US$420 million and US$434 million

(15–16%) of all humanitarian assistance

channelled through NGOs went to faith-based

organisations.

Not all of this was religiously

motivated – it includes funding from donor

governments, and not all of the privately

generated funds were necessarily based on

faith-based giving. Figure 1 shows the volume

and proportion of funds channelled through

faith-based NGOs from 2011 to 2013.

FIGURE 1: HUMANITARIAN ASSISTANCE CHANNELLED THROUGH

FAITH-BASED AND NON-FAITH-BASED NGOS, 2011–2013

Humanitarian assistance

to faith-based NGOs

% of humanitarian assistance

to NGOs channelled through

faith-based organisations

US$ BILLIONS

% OF HUMANITARIAN ASSISTANCE

3.5

3.0

2.5

2.0

1.5

1.0

0.5

20%

18%

16%

14%

12%

10%

0.4

16% 16%

17%

0.4

20122011 2013

0.4

Humanitarian assistance

to non-faith-based NGOs

Source: Development Initiatives based on UN OCHA FTS data.

Note: Values and proportions of funding channelled through NGOs vary within FTS data depending on dierent

reporting headings used by reporters. Data presented here is based on ‘agency code’ ﬁgures.

“Alms are for the poor and the needy,

and those employed to administer the

(funds); for those whose hearts have been

(recently) reconciled (To Truth); for those in

bondage and in debt; in the cause of God;

and for the wayfarer.” (Qur’an 9:60)

AN ACT OF FAITH 2. ZAKAT

Islamic countries or those with large Muslim

populations are growing in signiﬁcance as

both humanitarian donors and recipients.

Between 2011 and 2013, international

humanitarian assistance from governments

within the Organization of Islamic Cooperation

(OIC) grew from US$599 million to over US$2.2

billion, representing a 4% to 14% growth in

their share of total international humanitarian

assistance from governments. At the same

time, an estimated 75% of people living in the

top ten recipient countries of humanitarian

assistance in 2013 were Muslim.

3. RELEVANCE OF ZAKAT TO HUMANITARIAN RESPONSE

FIGURE 2: ORGANIZATION OF ISLAMIC COOPERATION COUNTRIES, AND TOP 25 HUMANITARIAN ASSISTANCE DONOR AND RECIPIENT COUNTRIES

0–250

251–500

501–750

751–1,000

1,000–4,000

4,000+

0–250

251–500

501–750

751–1,000

1,000+

Source: Development Initiatives based on OECD DAC and UN OCHA FTS data.

Notes: Recipients data not yet available for 2013. Funding from EU Institutions includes contributions from member states. Funding from individual EU member states also includes an imputed amount of EU institutions’ expenditure. DRC, Democratic Republic of Congo.

Top 25

humanitarian

donors 2013

(US$ millions)

Organization of Islamic

Cooperation member

Top 25

humanitarian

recipients 2012

(US$ millions)

EU INSTITUTIONS

US$1,881

UNITED STATES

OF AMERICA

US$4,686

CANADA

US$691

UNITED

KINGDOM

US$1,825

BELGIUM

US$250

FRANCE

US$427

SPAIN

US$253

ITALY

US$276

MALI

US$258

NIGER

US$291

CHAD

US$298

SUDAN

US$441

THE PHILIPPINES

US$139

MYANMAR

US$130

AFGHANISTAN

US$492

PAKISTAN

US$529

YEMEN

US$305

JORDAN

US$303

PALESTINE

US$654

HAITI

US$237

ETHIOPIA

US$484

SOMALIA

US$627

KENYA

US$404

DRC

US$464

ZIMBABWE

US$152

SOUTH SUDAN

US$865

SYRIA

US$1,536

LEBANON

US$404

KUWAIT

US$327

NORWAY

US$613

SWEDEN

US$785

FINLAND

US$162

TURKEY

US$1,638

DENMARK

US$409

NETHERLANDS

US$410

GERMANY

US$949

SWITZERLAND

US$399

IRELAND

US$147

JAPAN

US$1,112

AUSTRALIA

US$357

AUSTRIA

US$62

LUXEMBOURG

US$59

QATAR

US$69

SAUDI ARABIA

US$109

UNITED ARAB EMIRATES

US$90

BANGLADESH

US$87

BURKINA-FASO

US$98

COTE D’IVOIRE

US$103

IRAQ

US$98

THAILAND

US$85

AN ACT OF FAITH 3. RELEVANCE OF ZAKAT TO HUMANITARIAN RESPONSE

Zakat is unique in its modality as a form

of mandatory alms intended to respond to

human suering, with the speciﬁc aim of

reducing poverty and inequality. Aside from its

geographical relevance to a signiﬁcant number

of today’s humanitarian crises, there are

also clear links between the theological and

ideological purpose of Zakat, and the moral

purpose of providing both humanitarian and

development assistance across the world. This

is the case both overall and when considering

the eight individual categories of eligible

recipients of Zakat; there are obvious – and

not so obvious – parallels to be drawn with

people in need of humanitarian assistance

(see Figure 3). Zakat also has to be used within

one lunar year of being given, which in many

ways makes it ideal for the timeframes of

humanitarian response.

As with many elements of Zakat, such as how

much should be paid, the question of where it

should be spent and who can beneﬁt from it

is open to dierent interpretations. Most

people tend to believe that, ﬁrst and foremost,

Zakat should be spent in the community

from which it was paid. However, some

interpretation of the Qur’an allows for Zakat to

be used elsewhere if a greater need can

be demonstrated.

There is also debate among Muslim scholars

around whether Zakat is intended only for

Muslims, or whether non-Muslims can also

beneﬁt from it. This issue is key to discussions

concerning the compatibility of Zakat with the

humanitarian principles, which is discussed in

more detail in chapter 7 of this report. There is

no consensus on whether Zakat is intended to

be restricted to Muslims or not, and dierent

interpretations of verse 9:60 of the Qu’ran

(see page 7), which describes the recipient

groups, yield dierent opinions. For example,

the category Al’Mu’allafate-Qulubuhum, above,

could either refer to bringing hearts closer

to Islam (by supporting non-Muslims who

are sympathetic to Islam), or to supporting

new Muslims. Many scholars claim that the

ﬁrst two categories (the poor and needy) are

not explicitly referred to as Muslims in the

Qur’an, thereby opening up an interpretation

that non-Muslims can receive Zakat if they fall

into either of those categories. There is also

historical evidence to show that non-Muslims

living under Islamic rule have previously been

entitled to Zakat based on this interpretation.

FIGURE 3: ZAKAT BENEFICIARY CATEGORIES AND POTENTIAL LINKS TO AREAS OF HUMANITARIAN NEED

Source: Development Initiatives.

The poor: Poverty and vulnerability to

humanitarian crises are closely linked; the

majority of people living in the top recipient

countries of humanitarian assistance are

chronically poor. Al-Fuqara is therefore

directly applicable to a large proportion of

people in need of humanitarian assistance,

and can be applied to people living in extreme

or chronic poverty.

People burdened with debt: Where debt is

faced as an element of extreme or chronic

poverty or as a consequence of humanitarian

crisis, Zakat can be used as a recovery

mechanism. It could also be argued under

this category that Zakat could be used to

support people living in countries impacted by

high levels of national debt, where that debt

reduces the government’s domestic spending

capacity and therefore limits citizens’ access

to basic services (note however that Zakat

can only be used to support individuals,

and not to relieve the burden of debt for the

government). Almost one third of the people

in need of humanitarian assistance in 2012

were living in low-income countries classiﬁed

by the World Bank and International Monetary

Fund as having a moderate or high risk of debt

distress, or were already in debt distress.

The reconciliation of hearts; those who have

embraced or are inclined towards Islam:

‘Reconciliation of hearts’ could be interpreted

to refer to peace-building activities.

The needy: Could apply to anyone in need

of assistance in the aftermath of a crisis or

disaster.

Those in the path of God: There are no clear

links between the category of Fi-sabilillah and

people in need of humanitarian assistance.

This category is also particularly compromised

by the interpretation of whether non-Muslims

are eligible to beneﬁt from Zakat.

The wayfarer, or stranded traveller:

Refugees and internally displaced people.

People in bondage or slavery: Could apply

to people who are enslaved, oppressed or

wrongly imprisoned, or to victims of tracking.

Alms collectors/administrators of Zakat:

Can be used to cover administrative costs

related to the collection and distribution of

Zakat for humanitarian agencies.

Al-Fuqara

Al-Gharimin

Al’Mu’allafate-Qulubuhum

Fir-Riqab

Al-Masakeen

Fi-sabilillah

Ibnas-Sabil

Al-‘Amilina ‘Alayha

To date, there is no precise or reliable ﬁgure

for the global ﬁnancial value of Zakat. Previous

estimates have varied enormously – from

US$200 billion to US$1 trillion per year.

Given this absence of deﬁnitive global data,

GHA undertook research into a selection

of individual countries and Zakat-raising

organisations and institutions in Islamic,

Muslim-majority and Muslim-minority

countries in order to gain an understanding of

the volume of Zakat currently being collected

in each.

We were able to collect enough data for

Indonesia, Malaysia, Qatar, Saudi Arabia and

Yemen

– which make up 17% of the world’s

estimated Muslim population

– to give an

indication of the total amount of Zakat raised in

each of these countries through formal Zakat-

management institutions. Our data shows that,

in these countries alone, a combined total of

at least US$5.7 billion is known to be currently

collected each year.

It is likely, however, that the actual amount of

Zakat paid in these countries is signiﬁcantly

higher than US$5.7 billion, as this ﬁgure

excludes Zakat given outside of formal

institutions. The majority of traceable Zakat is

collected by governments and government-

managed institutions in these and other

Islamic or Muslim-majority countries.

However, many people pay their Zakat outside

of any traceable system. This is partly, in

some places, owing to distrust in the national

government-managed institutions formally

tasked with collecting and distributing Zakat.

Anecdotal evidence also suggests that

many Muslims prefer to pay their Zakat

directly to the person receiving it or through

independent organisations.

The ﬁgure for Indonesia, Malaysia, Qatar, Saudi

Arabia and Yemen gives us an idea of the

scale of formally collected Zakat from those

countries but is not a representative basis

for projecting the global scale, as incomes

in these Asian and Middle Eastern countries

dier from those elsewhere. Muslims living

in certain African countries, for example, will

likely have signiﬁcantly less giving capacity

than those living in the Middle East, where

incomes are generally higher.

On the other

hand, Zakat from Muslims living in developed

Western economies will be relatively high.

In Western and Muslim-minority countries it

is particularly dicult to trace overall Zakat

revenues, as it is not always collected through

formal institutions or mechanisms. Many such

countries have a Zakat fund or foundation, such

as the UK’s National Zakat Foundation

or the

Zakat Foundation of America.

However, these

institutions represent just one of any number

of ways in which an individual may choose to

channel their Zakat in these countries – they

might just as easily give it to their local mosque,

to a charity of their choice, to a next-door

neighbour who is in need, or directly to family

members or contacts overseas, for example.

Perhaps as a result of this, the amount of

Zakat these funds collect only appears to cover

a small proportion of the total payable. For

example, in 2012/13, the Zakat Foundation

of America collected US$9.7 million,

which

equates to an average of just US$3.74 for every

US-based Muslim.

This is much less than

the average total Zakat per capita likely to be

paid in the US. Although no deﬁnitive ﬁgure is

available for the total Zakat paid or payable in

the US, we can compare to the UK (which has

a slightly lower gross domestic product (GDP)

per capita),

where the average total Zakat

payment per eligible Muslim is thought to be

US$1,050 (UK£700) per year.

Given the limitations to extrapolating

global estimates from the data from

national institutions in ﬁve countries, we

can only estimate that the global volume of

Zakat collected each year through formal

mechanisms is, at the very least, in the

tens of billions of dollars. This is based on a

straight-forward scaling up of the data we

have collected according to global Muslim

population ﬁgures. However, if we also take

into consideration Zakat currently thought

to be paid through informal mechanisms,

then the actual amount available is likely to

be much higher, and could potentially be in

the hundreds of billions of dollars. By way

of comparison, international humanitarian

assistance from government and private

donors in 2013 totalled US$22 billion,

while

ocial development assistance (ODA) from

member countries of the Organisation for

Economic Cooperation and Development’s

(OECD) Development Assistance Committee

(DAC) was US$134.8 billion in the same year.

As detailed in chapter 6, below, without a

clearer understanding of the total volume

of Zakat available or who is collecting it, it is

impossible to reliably identify how it can be

maximised, better targeted, and used more

eciently for addressing humanitarian needs.

Better quality data is essential to achieving

this. More formal channels to link Zakat up

with the international humanitarian system

may help, as well as increased dialogue

between all the many dierent types of

institutions involved in the collection and

distribution of Zakat. See chapter 8 for more

detailed recommendations.

4. WHAT IS ZAKAT WORTH?

Most Zakat-collecting and -distributing

agencies have their own policies regarding

the issue of whether Zakat can be spent on

non-Muslims. As there is no deﬁnitive answer

to the question of interpretation, the policies

of dierent organisations with regards the

collection and distribution of Zakat will be

more liberal or conservative depending on

their own interpretation and ideological

stand point. In the UK, the Muslim Charities

Forum

has been working with its members

to formalise policies regarding how Zakat is

collected and who can beneﬁt from it.

The international NGO Islamic Relief

Worldwide

is also currently developing a

global policy on its use of Zakat to guide how

it is raised and spent by oces around the

world. At an international level, the National

Board of Zakat of the Republic of Indonesia

(BAZNAS) is currently working with the Central

Bank of the Republic of Indonesia and the

Islamic Research and Training Institute to

formulate a set of core principles for Zakat

management, as part of an international

working group on Zakat

core principles.

1110

AN ACT OF FAITH 4. WHAT IS ZAKAT WORTH?

In Saudi Arabia, Zakat is regulated and

collected by the Department of Zakat and

Income Taxation (DZIT). Total Zakat collected

has increased every year since 2010 and

reached a high of US$3.7 billion by midway

through 2013.

As a comparison, Saudi Arabia gave

US$5.7 billion in ODA in 2013, of which

US$109 million was in the form of

international humanitarian assistance.

Case study: Saudi Arabia

ZAKAT, ODA AND HUMANITARIAN ASSISTANCE IN US$ BILLIONS

GNI IN US$ BILLIONS

800

700

600

500

400

300

200

100

2010 20122011 2013

Zakat collected

ODA

Humanitarian assistance

GNI

FIGURE 4: ZAKAT COLLECTED BY SAUDI ARABIA’S DEPARTMENT OF ZAKAT AND INCOME TAXATION, ODA AND

HUMANITARIAN ASSISTANCE FROM SAUDI ARABIA, 2010–2013

Source: Development Initiatives based on data from Saudi Arabia’s Department of Zakat and Income Taxation, OECD DAC, UN OCHA FTS and World Bank.

Notes: ODA, Ocial development assistance; GNI, gross national income.

Islamic Relief Worldwide (IRW), an

international humanitarian and development

NGO whose charitable objects are “the relief

of poverty in any part of the world”, currently

fundraises in 16 countries. In 2013/14

IRW conducted research focusing on 11

of its global fundraising markets, plus the

international fundraising department based

in their global headquarters,

and found that

these oces raised between US$30 million

and US$32 million in Zakat in 2013. The top

three donor countries were the US (US$15

million, 49% of total), the UK (US$8.2 million,

27%) and Canada (US$2.7 million, 9%). The

majority of total Zakat raised globally by IRW

is collected during Ramadan through general

fundraising campaigns including email alerts

to supporters, sponsored events, television

appeals on Muslim channels and

mosque collections.

While many Zakat donors restrict their

donations according to sector, project or

country, the majority of the Zakat IRW receives

is un-restricted, and is thus earmarked as

“General Zakat” funds. Partner oces allocate

this General Zakat to projects in accordance

with the general principles of Zakat outlined

in the Qur’an, and dierent oces have their

own mechanisms and criteria for making

these decisions. The organisation is currently

developing a global policy on its use of Zakat,

which will guide how it is raised and spent by

oces around the world in a more coordinated

and collective way.

The UK’s National Zakat Foundation estimates

that the average annual Zakat payment of

UK-based Muslims is US$1,050 (UK£700)

per person per year.

If 10% of Muslims in

each of the 11 countries included in their

research paid just US$150 (UK£100) of their

Zakat to the organisation, this would amount

to over US$200 million per year. Over the

coming years, IRW expects to invest in new

Zakat-based fundraising campaigns, as well

as learning from and building the capacity of

its global fundraising oces on increasing

the volume of Zakat they collect. However, the

ability to raise signiﬁcant funds through Zakat

is to some extent limited in some countries

in which IRW operates. For example, the

political context in certain environments can

make it dicult to fundraise through Zakat,

and in countries where Zakat has traditionally

been collected by government institutions

it can take time to build up a reputation as a

legitimate Zakat-collecting authority with the

general public.

Case study: Islamic Relief Worldwide

Experts have estimated that the total potential

volume of Zakat payable across the world is

signiﬁcantly higher than the total amount that

is currently being paid.

Reasons for this

may include:

• The complex nature of calculating the

correct nisab, which could mean that

people aren’t aware that they are eligible

to pay Zakat.

• The complex nature of calculating how

much Zakat is owed, which could mean

that many Muslims are unintentionally

under-paying their Zakat.

• A lack of clarity regarding how to pay

Zakat in contexts where it is not collected

through a formal process.

Growing economies in Islamic and Muslim-

majority countries across the world also oer

further potential for the collection of Zakat

funds to increase over the coming decades.

This is particularly the case in emerging

economies of Africa and Asia with high Muslim

populations, such as Nigeria, Malaysia and

Turkey. The collective economy of Islamic and

Muslim-majority countries is currently one of

the fastest growing in the world,

and among

the MINT countries (Mexico, Indonesia, Nigeria

and Turkey) – predicted by some economists

to be the world’s next economic giants

–

Muslims make up 61% of their combined

populations. The global Muslim population

is also increasing at a faster rate than the

overall population, and as a consequence that

proportion is predicted to increase slightly, to

62%, by 2030.

Untapped and growing potential scale of Zakat

5. HOW IS ZAKAT SPENT?

Given the close links between Zakat

beneﬁciary groups and people in need of

humanitarian assistance identiﬁed in the

previous chapter, as well as the fact that many

of today’s crises are concentrated in Muslim

areas of the world, it is likely that Zakat is

already a signiﬁcant source of humanitarian

ﬁnancing in many places.

According to our research, the proportion of

Zakat used for humanitarian activities, either

domestic or international, varies notably

across dierent institutions. For example,

data for the Indonesian Institute Amil Zakat

(Institute of Zakat, LAZ), an independent

Zakat-collection and -distribution agency in

Indonesia, suggests that 23% (US$16.8 million)

of all Zakat raised by the institution in 2011

was used for humanitarian assistance,

while

57% (US$4.5 million) of Zakat raised by the

Zakat Foundation of America was used for

emergency relief in 2013. Although data is not

available to show where the LAZ funds were

spent, it appears likely that most if not all

were used within Indonesia. The vast majority

of emergency relief distributed by the Zakat

Foundation of America, however, was spent

internationally (see case study

on p.15).

Where Zakat is collected and distributed by

a formal agency, there is usually some level

of public reporting to indicate where and how

it is spent. However, Zakat given by Muslims

living in countries where no formal institution

oversees its collection and distribution is much

more dicult to trace.

Where expenditure data was available for

the national Zakat funds or foundations we

have looked at in Muslim-minority countries,

anywhere between 1% and 57% was used

for international humanitarian assistance.

However, the lower a country’s GDP, the

more likely it appears that Zakat is spent

domestically, so in low-income countries

where a small proportion of the Zakat raised

is spent on international humanitarian

assistance, it is likely that a greater proportion

is used to respond to domestic emergencies.

Anecdotal evidence would appear to support

this, for example the Zakat Foundation of

India,

which had an income of US$410,000

in 2013 (25.4 million Indian Rupees), has

a disaster relief programme to respond to

domestic emergencies. Following severe

ﬂoods in Kashmir in 2014, the programme

provided 25 search-and-rescue boats and

daily provisions including water, medicine,

food and blankets for thousands

of people.

1312

AN ACT OF FAITH 5. HOW IS ZAKAT SPENT

Case study: Indonesia

At an estimated 205 million, Indonesia is

home to the largest Muslim population in

the world. While Zakat can be collected by

private institutions, the National Board of

Zakat (BAZNAS) assumed the role of national

collection agency in 2011 and is now thought

to manage around 62% of all Zakat raised

in Indonesia.

Zakat collection has increased over 30-

fold during the past ten years, reaching an

estimated US$231.6 million in 2012. In the

same period, international humanitarian

assistance to Indonesia has decreased from

a record US$1 billion in 2005 following the

Indian ocean earthquake and tsunami, to just

US$51 million in 2012 (see Figure 5).

FIGURE 5: TOTAL ESTIMATED ZAKAT COLLECTED AND INTERNATIONAL HUMANITARIAN ASSISTANCE RECEIVED,

INDONESIA, 2004–2012

US$ MILLIONS

1,200

1,000

800

600

400

200

2004 2005 2006 2007 2008 2009 2010 2011 2012

Zakat collected

International humanitarian assistance received

Source: Development Initiatives based on OECD DAC and UN OCHA FTS data, and 2014 Islamic Social Financing Report.

Indian Ocean tsunami (2004)

Sumatra earthquake (2005)

Java earthquake

(2006)

Sumatra

earthquake

(2009)

The education programme: designed to provide

educational assistance.

Emergency aid

Seasonal programs

Orphan sponsorship

Education

Management and general

Development

Other program support

Fundraising

Humanitarian aid: created to provide

humanitarian assistance.

Health programme: intended to provide medical

assistance, including a cost-free hospital and

mobile clinic serving remote areas.

Economic programme: developed to empower

mustahiq economically through Zakat-based

community development programmes.

Case study: The Zakat Foundation of America

FIGURE 6: BAZNAS EXPENDITURE BY CATEGORY, 2012

FIGURE 7: ZAKAT AND SADAQAH EXPENDITURE BY PROGRAMME AREA,

ZAKAT FOUNDATION OF AMERICA, 2013

41%

12%

16%

31%

Source: Development Initiatives based on the 2014 Islamic Social Financing Report.

BAZNAS allocates Zakat to four dierent

categories. In 2012, humanitarian assistance

was the largest sector on which Zakat funds

raised by BAZNAS were spent. The BAZNAS

humanitarian aid programme consists of two

major elements: Mustahiq (people receiving

Zakat) Services Counter, and Disaster

Emergency Aid.

The Zakat Foundation of America is an

international charitable foundation that aims

to address the immediate needs and ensure

self-reliance of the poorest people around the

world using money collected through Zakat

and Sadaqah in the US.

In 2013, the foundation received

US$7.6 million in contributions and

US$2.1 million in in-kind donations. Of the total

expenditure, 57% (US$4.5 million) was spent

on emergency relief in the same year. This

included projects in the Philippines, Pakistan,

Bangladesh, Syria (and surrounding aected

countries), Mali and within the US.

Development Initiatives based on the Zakat Foundation of America 2013 Annual Report.

57%

16%

BAZNAS categories of Zakat expenditure

1514

AN ACT OF FAITH 5. HOW IS ZAKAT SPENT?

Domestic response

6. THE HUMANITARIAN POTENTIAL OF ZAKAT

Estimates suggest that the world’s Muslim

population is set to grow by 35% between 2010

and 2030,

as noted in chapter 4, with the

most signiﬁcant growth occurring across sub-

Saharan Africa, followed by the Middle East

and North Africa. In growing economies with

large Muslim populations, such as Ethiopia,

Tanzania and Turkey, giving capacity through

Zakat is likely to increase due to a combination

of an increasing Muslim population and

increasing wealth. This will aect the

resources available for domestic humanitarian

response, and ultimately international

humanitarian assistance in the surrounding

region, through Zakat.

Zakat is estimated to have the potential to

provide the equivalent of between 1.59% and

3.82% of GDP in Indonesia,

amounting to

between US$13.8 billion and US$33.2 billion

annually. Indonesia’s two main Zakat-

collecting institutions spend on average 34%

of their collective income on humanitarian

assistance, and though we cannot conﬁrm it

due to a lack of available data, it seems likely

that all or most of this is spent domestically.

Using the same proportional breakdown, Zakat

could therefore have the potential to provide

between US$4.7 billion and US$11.3 billion for

humanitarian assistance in Indonesia

each year.

Indonesia is highly disaster-prone and has

faced over 100 disasters and emergencies

since 1990, including the devastating 2004

Indian Ocean earthquake-tsunami. In the

last eighteen months Indonesia has been

aected by ﬂooding, landslides, a volcanic

eruption and an earthquake,

and the UN has

predicted that climate change will contribute

to an increase in frequency and severity of

future disasters.

The Indonesian government spent an

estimated US$1,053 million on its domestic

humanitarian response in 2012 and received

US$51 million in international humanitarian

assistance the same year. The total cost of its

humanitarian response therefore amounted

to just over US$1.1 billion in 2012. It appears

that Zakat collected in Indonesia could easily

meet all current requirements to respond to

domestic humanitarian emergencies, with

signiﬁcant amounts remaining to cover other

areas of Zakat expenditure.

Zakat is estimated to have the potential to

provide the equivalent of between 1.74% and

4.18% of GDP in Pakistan.

In 2010/2011,

40–50% of Zakat distributed in Pakistan was

allocated for response to natural disasters.

This amounts to potential domestic revenue

from Zakat for humanitarian assistance

in Pakistan of between US$1.6 billion and

US$4.8 billion per year, at the current GDP.

In 2013, Pakistan received US$529 million

in international humanitarian assistance in

response to conﬂict- and displacement-

related emergencies as well as natural

disasters. Figures for expenditure on

humanitarian assistance by the Government of

Pakistan are not available, but even at

a cautious estimate it appears likely that

Zakat collected in Pakistan could meet

all current requirements to respond to

domestic humanitarian emergencies, both

natural and man-made, with signiﬁcant

resources remaining for other areas of

Zakat expenditure.

Our research indicates that Zakat has the

potential to provide a signiﬁcant amount of

humanitarian assistance in some Muslim

countries. However, given that its volume

is linked to the income of the muzakki (the

person paying Zakat), its potential is limited in

chronically poor countries where international

resources will play a more important role. The

domestic potential of Zakat is therefore less in

countries with low GDP per capita and a large

number of poor people.

Case study: Indonesia

(see also earlier case study on Zakat expenditure in Indonesia)

Case study: Pakistan

There are an estimated 47 million Muslims

living across Europe and North America.

In the UK, home to 2.9 million Muslims,

around two-thirds are thought to pay Zakat

with an average annual payment of US$1,050

(UK£700).

This suggests that Zakat revenue

from the UK alone could be over US$2 billion

per year. Based on the average proportion

of Zakat used for humanitarian assistance

by Western-based Zakat foundations and

Zakat-collecting organisations, as found in our

research, it is estimated that UK Zakat revenue

could provide US$1 billion of international

humanitarian assistance

per year.

There is a growing awareness of the potential

role of Zakat in international humanitarian

response, and of its potential to help ﬁll the

growing humanitarian ﬁnancing gap. As well

as oering signiﬁcant ﬁnancial potential in

terms of volume, Zakat also oers the beneﬁt

of a relative lack of earmarking compared to

government and institutional funding.

While Zakat has long been a traditional

source of funding for Islamic humanitarian

agencies, renewed eorts are now being

made to maximise its fundraising potential

by these and a wider group of international

humanitarian agencies.

Outside of the

traditional Islamic agencies, Zakat is beginning

to feature as a potential new source of income

for international humanitarian agencies. We

have identiﬁed two separate UN agencies that

are beginning to develop speciﬁc fundraising

strategies and tools for accessing increased

funding through Zakat. However, initiatives

are fragmented and lack a coordinated or

systematic approach.

International response

1716

AN ACT OF FAITH 6. THE HUMANITARIAN POTENTIAL OF ZAKAT

Logistical barriers

While Zakat clearly oers opportunities

in terms of mobilising and channelling

additional ﬁnancial resources to support

international humanitarian response, there

are a number of potential barriers that will

need to be overcome if it is to fully realise its

humanitarian potential. These fall broadly

under two main categories:

1) LOGISTICAL – such as streamlining and

formalising how Zakat is collected, by

whom, and how it is channelled to the

humanitarian response community.

2) IDEOLOGICAL – such as how best to

manage conﬂicting opinions on whether

non-Muslims can beneﬁt from Zakat and

where it can be used.

7. BARRIERS TO REALISING THE HUMANITARIAN

FINANCING POTENTIAL OF ZAKAT

Reporting, transparency

and traceability

Transparency in development and

humanitarian ﬁnancial ﬂows is an essential

enabler of eective response. It helps to

build trust between donor and recipient

communities and is one of the necessary

conditions for accountability to stakeholders.

Understanding what resources are being

channelled to whom also enables donors

and agencies to target their resources in an

appropriate, complementary and coordinated

manner. Development and humanitarian

actors are therefore under increasing

pressure to operate transparently when it

comes to their ﬁnances. However, due to

the myriad ways in which Zakat may be

collected and distributed – both at a global

and at national level – it is not subject to any

systematic form of ﬁnancial reporting. Zakat

is also intended to be given and received

privately, so as to preserve the dignity of the

person paying it. This limits its transparency

as a ﬁnancial resource ﬂow and its traceability,

in terms of understanding who beneﬁts and

how it is spent.

Counter-terrorism

Recent legislative changes resulting from

counter-terrorism measures put in place by

some governments have put further pressure

on aid agencies to account for their funding

sources and demonstrate how their funding

has been spent. This has limited the ability

of a number of organisations to operate

internationally and Islamic organisations have

been particularly aected, due in part to the

collection and distribution of funds through

Zakat, which represents a signiﬁcant source

of their income. Reputable international

organisations are falling foul of complex legal

and procedural requirements, as a result of

which they may be prohibited from channelling

funds to certain partner organisations in

speciﬁc countries, or from carrying out

humanitarian activities in certain places.

The incompatibility between some counter-

terrorism laws and humanitarian principles

of providing assistance according to need

has been well documented.

In the speciﬁc

case of Zakat, if Islamic NGOs are prohibited

from providing response directly or indirectly

through local or national partners in certain

contexts as a result of counter-terrorism

measures, then an important means of

mobilising and using Zakat for international

humanitarian response is signiﬁcantly

reduced.

Systematised collection

and coordination

Many countries have invested in strengthening

their humanitarian emergency prevention

and response coordination in recent years,

approving national policies and establishing

National Disaster Management Ministries.

There has also been renewed eort on

the part of the international humanitarian

community to improve coordination over

the past decade, including through the

UN-coordinated appeals process and

humanitarian pooled funds. A wide variety of

dierent ﬁnancing ﬂows support the response

to people aected by crises; some of these,

such as Zakat, may operate outside of the

internationally coordinated system. These

ﬂows can play a key role in directly meeting

the needs of individuals and households;

indeed in many ways they may be able to

operate more eciently as they have fewer

associated transaction costs, often reach the

intended beneﬁciary more quickly, and can

be used more ﬂexibly according to immediate

need. However, there is clearly also value

in coordination, and this requires a sound

understanding of the resources operating in a

given context. Mechanisms for systemisation

and coordination will be required to improve

links between Zakat given through formal

institutions and the international humanitarian

system, so that the use of resources can be

better aligned to meet the most pressing

needs and priorities of those aected.

How Zakat should be collected

Some Muslims believe that Zakat should not

be gathered by a third party, but that it should

be passed directly from provider to recipient.

This way of giving makes it dicult to align its

use with broader humanitarian eorts, as well

as limiting its transparency and accountability,

as highlighted above. There are also potential

concerns regarding the permissibility of

non-Muslim or secular humanitarian agencies

collecting and distributing Zakat, and their

legitimacy to do so.

Ideological barriers

Other barriers

There are a number of key issues surrounding

the compatibility of the principles and

purposes of Zakat with those of humanitarian

action. In particular, there are potential

incompatibilities around the following issues.

Who can receive Zakat

The issue of whether non-Muslims can beneﬁt

from Zakat is much debated among Islamic

scholars. However, if Zakat is limited to be

used only for Muslims, this would be in direct

contradiction to the humanitarian principle of

impartiality, namely that “humanitarian action

must be carried out on the basis of need alone,

giving priority to the most urgent cases of

distress and making

no distinctions on the basis of nationality,

race, gender, religious belief, class or political

opinions”.

Challenges in the delivery of assistance

funded through Zakat also arise as a result

of contradicting views concerning this

issue. Opinions vary among individual

Muslims about who can beneﬁt from Zakat,

and any money given by an individual must

be spent in accordance with their own beliefs

and requirements.

Where Zakat can be spent

The question of whether Zakat can be spent in

a country outside of that in which it is raised

may also limit its humanitarian potential. As

our research has shown, large volumes of

Zakat are used for international response –

but some scholars and institutions maintain

that it should be limited to, or primarily for,

domestic use. The concern that Muslims

may be neglecting their local obligations by

making international ﬁnancing a priority can

be seen as particularly relevant in light of

recent austerity measures put in place in a

number of developed countries following the

international recession in 2008/2009. This

presented a context in which Zakat could be

put to use to provide social welfare services

domestically, supporting the notion that Zakat

was traditionally – and according to many

people, should still be – given locally, not

internationally.

However, as seen in chapter 6 of this report,

the domestic potential of Zakat is lowest in

countries with low GDP per capita and a large

number of poor people. Yet these countries are

also often the ones with the most signiﬁcant

humanitarian needs, which cannot be met

by domestic resources alone and require

international assistance.

This is a question of political will as much as

religious interpretation. The governments and

institutions that already oversee the collection

and distribution of Zakat are currently the

main bodies responsible for deciding how

it is used. If they do not recognise it as a

viable instrument for providing humanitarian

assistance, then it will not be widely used

as one. Many of these institutions use Zakat

primarily as a resource to respond to

domestic social and economic issues. For

Zakat to be successfully used to support

international humanitarian response, these

bodies would need to support and enable its

its distribution internationally.

When should Zakat be spent

Zakat has to be used within one lunar year of it

being given. In many ways this makes it ideal

for the timeframes of humanitarian response.

However, any coordinated means of collecting

and distributing Zakat for humanitarian

response will need to take this into account,

ensuring that funds are distributed and used

within the required timeframe.

Lack of understanding

There is a widespread lack of understanding

outside of the Muslim community (and to

some extent within it) regarding the role and

use of Zakat. Until this is better understood,

international humanitarian agencies will

face signiﬁcant challenges in their eorts to

mobilise more funding through Zakat.

The international humanitarian system

and the UN in particular have historically

been perceived with a certain degree of

scepticism and in some cases distrust

by some governments, institutions and

communities in Islamic and Muslim-majority

countries. This distrust is to some extent a

result of misconceptions. For example, while

researching this report we came across

anecdotal evidence to suggest that, in the

past, some Middle Eastern governments had

limited the amount of funding they channelled

through the UN system due to a mistaken

belief that 75% of UN expenditure is used for

administration costs.

This misconception

further serves to highlight the importance of

transparency by all humanitarian actors. In

recent years, UN agencies have worked hard

to build greater trust and collaboration with

new and non-traditional UN donors, and many

have improved their own transparency by, for

example, reporting to the International Aid

Transparency Initiative (IATI). These eorts

seem to be yielding results – as can be seen

in the increase in humanitarian funds for UN-

coordinated appeals coming from Gulf donors,

for example

– but a greater degree of trust

still needs to be built.

Distrust of national Zakat-collecting

institutions is also thought to be limiting the

overall volume of Zakat collected.

It will

be challenging to signiﬁcantly increase the

amount of Zakat collected through formal

mechanisms while the people who pay it

do not feel able to invest a greater level of

conﬁdence in the institutions responsible for

managing it.

Competition and

opportunity costs

The purpose of Zakat is to redistribute wealth

as a means of reducing poverty and inequality.

It is therefore closely aligned with the

objectives of ocial development assistance

(ODA) and wider global eorts to end poverty.

Humanitarian agencies are by no means the

ﬁrst to recognise its potential as a source of

funding; Zakat has widely been discussed

within the context of ﬁnancing development

goals already and will almost certainly be

considered and employed as a future source

of funding for the post-2015 Sustainable

Development Goals.

There are clearly also links between Zakat

recipients and people in need of humanitarian

assistance, and therefore potential for more

Zakat to be raised and used for this purpose.

However, this should not be at the cost of other

activities relating to poverty alleviation which

could also be, and to some extent already are,

funded through Zakat.

Instead of running the risk of separate and

competing eorts from both humanitarian and

development agencies to mobilise signiﬁcant

international ﬁnancing though Zakat and

other forms of Islamic social ﬁnancing, a

complementary approach could be pursued to

mobilising Zakat for response and resilience.

As seen in the case studies above for Pakistan

and Indonesia, a signiﬁcant proportion of

Zakat collected in disaster-prone countries

is already used to fund domestic disaster

response. Greater investment in disaster

resilience through Zakat would help

maximise the impact of the donors’ money,

as well as providing longer term beneﬁts for

the recipients.

1918

AN ACT OF FAITH 7. BARRIERS TO REALISING THE HUMANITARIAN FINANCING POTENTIAL OF ZAKAT

It is clear that Zakat is already providing

signiﬁcant funds for humanitarian assistance

and could be a source of further alternative

ﬁnancing to help respond to growing

humanitarian needs. However, there are

signiﬁcant obstacles to overcome if its full

potential is to be realised. In the course of

this research, ﬁve key areas for action have

emerged to maximise the potential volume

and eectiveness of Zakat for humanitarian

assistance, as shown in Figure 8.

8. CONCLUSIONS AND RECOMMENDATIONS

FIGURE 8: KEY AREAS FOR ACTION TO MAXIMISE THE VOLUME AND EFFECTIVENESS OF ZAKAT

FOR HUMANITARIAN ASSISTANCE

Source: Development Initiatives.

An independent and credible global body that has taken part in these

discussions needs to provide guidance on the parameters of reasonable

interpretations of Zakat.

STEP 2: PROVIDE GUIDANCE

Actors at all levels – including small, local Zakat-receiving

organisations, national and international NGOs, and the UN – should

work together to improve channels between Zakat funds given and

the international humanitarian response system.

STEP 3: IMPROVE CHANNELS

Eorts should be focused on increasing Zakat revenues and

channelling new funds to humanitarian assistance, rather than

redirecting existing funds.

STEP 4: INCREASE REVENUE

Eorts to increase the use of Zakat for humanitarian

assistance should be combined with those of wider

development actors to ensure a complementary approach.

STEP 5: COMBINE EFFORTS

STEP 1: ENGAGE IN DISCUSSION AND SHARE LEARNING

umanitarian organisations and institutions with an interest in increasing the volume and

use of Zakat for humanitarian assistance should engage in discussion with academics,

Islamic scholars, theologians and practitioners, and share learning on the use of Zakat for

humanitarian assistance.

Engage and share learning

Provide guidance

Humanitarian organisations and institutions

interested in increasing the volume and use of

Zakat for humanitarian assistance will need

to engage with Islamic academics, scholars,

theologians, regulators, ﬁnance experts,

fund/foundation managers, practitioners and

agencies to ensure understanding across

all actors. This will include debating issues

around Zakat and the humanitarian principles,

as well as addressing logistical barriers and

how they might be overcome.

Existing networks and initiatives (such as

the World Humanitarian Summit, the Muslim

Charities Forum’s work with its members

to improve policies around Zakat collection

and distribution, and Indonesia’s work to

establish a set of core principles for Zakat

as part of an international working group

on Zakat management) may all have a role

to play by creating links and networks, and

by expanding their outreach to involve other

actors in discussions. Domestic institutions

currently responsible for collecting and

distributing Zakat will also need to be involved

in discussions, and in some cases may be

required to approve supporting regulation

(including tax laws where Zakat is collected

by the government) to enable Zakat to be

eectively collected and distributed not only

nationally but also internationally. Substantive

partnerships will be required based on who is

best placed to collect Zakat and to implement

Zakat-funded humanitarian activities, rather

than discussions based purely on the question

of resource mobilisation.

Ultimately, mutually understood

accommodation of the multiple approaches

needs to be reached regarding how best to

link up resources generated through Zakat

with humanitarian need. This will help to

ensure a coordinated approach and will

limit opportunities for contradicting views to

prohibit the eectiveness of eorts to increase

and improve the use of Zakat for humanitarian

assistance.

Humanitarian agencies that already raise and

use funds through Zakat also need to share

their experience and learning with the wider

community. If the humanitarian community

collectively starts to test Zakat as a source

of income for humanitarian assistance,

there can be greater evidence about its

channels, functions and potential. In this

respect, learning around the use of Zakat for

humanitarian assistance needs to be mutual.

There are a number of valuable lessons that

can be taken from Zakat regarding its purpose

and the manner in which it is intended to be

used, which could be applied to international

humanitarian practice. For example, the

notion of ‘donors’ and ‘recipients’ is a divide

strongly engrained in the current international

aid architecture. Zakat and Islamic social

ﬁnancing, on the other hand, demonstrate

an approach that empowers recipients

and promotes a sense of solidarity and

compassion. The approach of empowerment

and ownership resonates with recent shifts

towards cash transfer programming in

humanitarian and development response,

which have also proven highly eective in

allowing the recipient choice and control over

how the money is spent.

Zakat is not seen by either those giving or

receiving as charity; rather, it is a means

of sharing and redistributing wealth more

fairly across all members of society, and is a

right due to individuals less able than others

to amass wealth. As such, there is strong

evidence of the capacity of Zakat to reduce

inequality.

The mandatory nature of Zakat could also

provide an example for both government and

private donors to follow. If all international

donors were required to give a minimum

proportion of their funding to support the

provision of basic, life-saving humanitarian

assistance, or indeed to disaster risk

reduction, preparedness and resilience

building, this could provide a guaranteed

regular source of funding that could go

some way towards addressing the ongoing

humanitarian ﬁnancing short-fall.

Anecdotal evidence from both Muslim

and non-Muslim aid agencies suggests

that some are cautious about using Zakat

for humanitarian response due to a lack

of clear guidance on how it can be used.

Recommended policies, rooted in Islamic

religious scholarship, would help address

these concerns. Opening up discussion

and sharing learning are the ﬁrst steps to

developing such guidance. This should focus

initially on identifying the challenges charities

face in managing and implementing Zakat in

the modern context, and then begin to develop

a set of shared solutions.

Guidance need not be absolute; it may

recognise the fact that interpretation of Zakat

is not only dependent on sect but is also to

some extent deﬁned by the personal nature of

an individual’s beliefs. Instead it should focus

on setting out the parameters of a reasonable

interpretation of Zakat, clearly laying out

the arguments for dierent understandings

regarding who can beneﬁt and where it can

be spent.

2120

AN ACT OF FAITH 8. CONCLUSIONS AND RECOMMENDATIONS

Improve channels between Zakat and the

international humanitarian system

Due to the inherent nature of Zakat as a

transfer of resources between individuals,

as well as the myriad ways in which it can

be paid, it is unlikely that it can ever be

fully reported or accountable. However,

in order to maximise its eciency and

eectiveness in humanitarian settings, and

to ensure complementarity between dierent

funding sources, better communication and

coordination channels need to be established

to improve links between the collection of

Zakat and its disbursement in crisis situations.

Just as IATI and OCHA’s FTS are developing

standards, outreach and support for

government and private donors to report

humanitarian assistance, so could this be

oered to Zakat donors or institutions. New

technologies oer new opportunities for this

– as one interviewee for this paper noted:

“online tools provide the perfect mechanism

to help people calculate and pay their Zakat,

and the future of fundraising through an ever-

more global community of stakeholders in

humanitarian assistance is also online.”

Encouraging the use of more traceable,

transparent and formal channels for Zakat

could also help to address some of the

potential negative impacts of counter-

terrorism measures on humanitarian

operations. Clearer systems and avenues for

Zakat to be absorbed into the international

humanitarian system on a more formal

basis would provide opportunities to report

on resources generated through Zakat in a

more transparent way. This would help to

improve its accountability as well as provide

evidence of safe provenance and use of funds

channelled through such mechanisms for

counter-terrorism actors. Meanwhile, aid

agencies using Zakat need to ensure that

appropriate risk-management measures

are in place, while the international donor

community and governments need to

ensure that concerns about security and

ﬁduciary risks do not restrict the delivery of

humanitarian assistance where and when it

is needed.

A Zakat fund?

One way to improve the channelling of Zakat

to humanitarian assistance, which has been

suggested in consultations around the World

Humanitarian Summit, could be to explore

launching a dedicated fund that both collects

and distributes Zakat at a regional and sub-

regional level. This approach may go against

the belief, outlined earlier, among some

Muslims that Zakat should not be gathered

by a third party but should be passed directly

from provider to recipient. It may also raise

questions around who beneﬁts from the fund,

taking into account diering opinions within

the Muslim community as well as international

counter-terrorism measures. Despite the

pooled nature of the fund, one solution to this

could be to enable an individual’s contributions

to be earmarked according to the beliefs and

distribution priorities of the muzakki (donor),

such as whether the money should be spent

locally or internationally.

There would be further challenges to

overcome in terms of agreeing who should

set up and manage such a fund. As mentioned

previously, distrust of national Zakat-collecting

institutions is thought to be limiting the overall

volumes of Zakat collected, and there is

limited trust in the UN system among sections

of the Muslim community.

In order to avoid

similar issues it may be appropriate for such

a fund to be managed outside of the current

global political architecture, for example by

the Islamic Development Bank or a similar,

politically independent institution. According

to Shari’a rules it is widely believed that

the state is the most appropriate body for

collecting and distributing Zakat,

therefore

any institution responsible for this on an

international scale would need to be invested

with a similar level of legitimacy as a collector

and distributor of Zakat. A corresponding

monitoring and evaluation unit would also be

required to assess eectiveness and ensure

accountability in the use of funds.

Once given, Zakat is intended to be immediate

in its capacity to empower the individual

receiving it. Local councils and actors have

been shown to be more eective in the

distribution of Zakat in this respect than larger

organisations, which tend to be restricted

in their ability to distribute funds quickly,

often due to higher levels of institutional

bureaucracy. There is evidence to suggest

that once larger institutions become involved,

including the state and international NGOs,

the eectiveness of Zakat in terms of its

capacity to empower the person receiving

it is reduced.

Due to this need for Zakat to

be quickly distributed, it would be important

to ensure that established local actors are

involved in its distribution where possible.

While such a pooled fund would take time

and consideration to establish, the short-

term priority should be to link existing funds

available through Zakat with immediate

humanitarian need, while working towards a

longer term goal of building an infrastructure

that is able to fully support the use of Zakat for

humanitarian assistance.

Increase Zakat revenues and channel

new funds to humanitarian assistance

Scholars and researchers have repeatedly

shown that there is more Zakat available than

is currently being collected.

International

eorts should therefore focus on mobilising

new resources to meet growing need rather

than redirecting existing resources away from

their current objectives. Growing economies

in Islamic and Muslim-majority countries

will further enable this. However, as noted

above, eorts to mobilise greater international

ﬁnancing through Zakat should be joined

up and collective with broader development

activities, rather than operating in competition

with each other. Increased humanitarian

resources from Zakat should not come at

the cost of resources for wider eorts to

reduce poverty.

Zakat has the potential to oer signiﬁcant

and much-needed resources to support the

response to growing humanitarian needs

across the world. To make the most of this

potential and eectively mobilise and use

Zakat for the provision of humanitarian

assistance, collective eorts need to be

carefully considered, coordinated and targeted.

Better coordination will help to ensure greater

complementarity of response eorts, making

the most of all available resources to help the

people who are most in need.

Combine eorts with the wider

development community

A joint approach to mobilising funding through

Zakat and Islamic social ﬁnancing could help

to ensure complementarity and appropriate

allocation of resources across humanitarian

and development programming, and could

provide new opportunities for humanitarian

and development actors to work more closely

together. There are close links between

poverty and vulnerability to humanitarian

crises, and poverty alleviation eorts and

humanitarian assistance need to work better

together to address these. The ﬂexibility of

Zakat as a source of funding and in relation

to the range of people who can beneﬁt from

it makes it well suited to supporting such a

resilience approach. If the aforementioned

fund were to be established, making it a joint

international Zakat fund to address poverty,

vulnerability and crisis could help to ensure a

collective, rather than competitive, approach

to raising and allocating funds.

2322

AN ACT OF FAITH 8. CONCLUSIONS AND RECOMMENDATIONS

The author would like to thank Alex Spencer

for her invaluable research assistance, Amjad

Mohammed-Saleem for his guidance and

advice, Jemilah Mahmood for her support,

Professor Habib Ahmed for his time and Fidel

Budy for providing background research.

Thanks also to Sadia Kidwai (Islamic Relief

Worldwide), Omayma El Ella (Muslim Charities

Forum), and Houssam Chahin (UNHCR).

Much of the Zakat paid globally is channelled

through informal mechanisms, such as

between individuals. Where Zakat is collected

by a national institution, the mechanisms

for its management and reporting practices

can vary considerably. There is therefore no

reliable or readily available data on Zakat

mobilised globally, and as such this report

has drawn on evidence gathered through case

studies and existing research to provide an

indication of the scale of Zakat’s value, trends

around its existing use, and its potential for

humanitarian response.

In order to collect the data for these case

studies we used three main sources, in the

following order of priority:

1) Figures published by Zakat collection

and management institutions including

annual reports and accounts, or data

provided directly to GHA by the agency or

by an umbrella body

• Zakat Foundation of America

• South African National Zakah Fund

• Government of Saudi Arabia, Department

of Zakat and income taxation

• Islamic Relief Worldwide

(data provided directly)

• Muslim Charities Forum

(data provided for seven Islamic NGOs)

2) Reports and press releases detailing

Zakat collection and expenditure in

speciﬁc contexts

• Malaysia

• Qatar

• Yemen

• United Kingdom

• India

3) The Islamic Social Finance Report 2014

• Indonesia

• Pakistan

Data gathered through these case studies

included, where available:

• Total Zakat collected in the most recent

year for which data is available.

• Sector breakdown on Zakat expenditure

and the amount used to provide domestic

and/or international humanitarian

assistance.

Our estimate of the total global value of Zakat

collected through formal institutions is based

on data for countries where Zakat collection

is overseen by a single institution, and ﬁgures

are available to show the total amount

collected in a single year. We have applied

Pew Research Center’s data on global Muslim

population ﬁgures disaggregated by country

to the countries for which we have data on

the total amount of Zakat collected by formal

institutions, to gain an understanding of the

proportion of the world’s Muslims represented

by those countries. This has guided our

estimate of the total global value of Zakat.

Due to the considerations outlined in chapter

4 of the report (the wealth of Muslims in our

case study countries is not representative of

the wealth of Muslims globally; Zakat given by

Muslims living in non-Muslim countries that

are generally comparatively more wealthy is

dicult to trace; and evidence suggests that

Muslims give a signiﬁcant amount of Zakat

outside of formal and therefore traceable

channels), we are unable to provide a ﬁrm

estimate for the total global volume of Zakat.

Our ﬁgures on the proportion of total Zakat

collected that is used for humanitarian

assistance are based on the average

percentage used for humanitarian assistance

by the Zakat-collection and distribution

institutions and organisations included in our

research, where data on expenditure by sector

is available.

Data presented in the Islamic Social Finance

Report 2014, based on Kahf’s 1998 research

estimating the potential of Zakat in eight

dierent Muslim-majority countries with

updated calculations relevant to the current

situation, was used to calculate the potential

value of Zakat in Indonesia and Pakistan (case

studies in chapter 6).

Data on Muslim populations by country and

expected Muslim population growth has been

taken from the Pew Center for Research’s

2011 research on “The future of the global

Muslim population”.

METHODOLOGY

ACKNOWLEDGEMENTS

2524

AN ACT OF FAITH METHODOLOGY AND ACKNOWLEDGEMENTS

Development Initiatives analysis based on UN OCHA FTS data.

Figure compiled using Pew Research Center data on Muslim

demographics, www.pewforum.org/2011/01/27/table-muslim-

population-by-country/, and GHA Report 2014 data.

Pew Research Center, www.pewforum.org/2011/01/27/table-

muslim-population-by-country/.

Development Initiatives, ‘Global Humanitarian Assistance Report 2014’,

Development Initiatives, Bristol, 2014.

http://www.oecd.org/newsroom/aid-to-developing-countries-

rebounds-in-2013-to-reach-an-all-time-high.htm

UN OCHA Financial Tracking Service.

Amos, Valerie, UN Under-Secretary-General for Humanitarian Aairs,

July 2014, http://news.yahoo.com/un-humanitarian-chief-calls-aid-

revamp-041157102.html.

Charitable giving in the UK increased from UK£9.6 billion in 2011/12

to UK£10.4 billion in 2012/13, according to the Charities Aid

Foundation, www.cafonline.org/pdf/UK%20Giving%202012-13.pdf/.

Charitable giving in the US rose for the fourth year running in 2013

reaching over US$335 billion, according to the Indiana University Lilly

Family School of Philanthropy, www.philanthropy.iupui.edu/news/

article/giving-usa-2014.

www.irinnews.org/report/95564/analysis-a-faith-based-aid-

revolution-in-the-muslim-world.

www.pewforum.org/2009/10/07/mapping-the-global-muslim-

population/.

Saunders, S.G. (2013), ‘The diversiﬁcation of charities: from religion-

orientated to for-proﬁt-orientated fundraising’, International Journal

of Nonproﬁt and Voluntary Sector Marketing, 18 (2), pp141–149.

Chodorow, A.S. (2007/2008), ‘Biblical tax systems and the case for

progressive taxation’, Journal of Law and Religion, 23 (1), pp69.

Dalin, D.G. (1997), ‘Judaism’s war on poverty’ (cover story), Policy

Review, 85, p28, Business Source Complete, EBSCOhost (viewed 12

February 2015).

Chodorow, A.S. (2007/2008), ‘Biblical tax systems and the case for

progressive taxation’, Journal of Law and Religion, 23 (1), p54.

www.jewfaq.org/tzedakah.htm.

Eck, D.L. (2013), ‘The religious gift: Hindu, Buddhist, and Jain

perspectives on dana’, Social Research, 80 (2), pp359–379.

Bornstein, E. (2009), The Impulse of Philanthropy, Cultural

Anthropology, 24(4), pp622–65.

www.hinduismtoday.com/modules/smartsection/item.

php?itemid=506.

Collins, S. (2006), Nirvana and Other Buddhist Felicities. Cambridge,

Cambridge University Press, pp460–461.

Swearer, D.K. (1998), ‘Buddhist virtue, voluntary poverty, and extensive

benevolence’, The Journal of Religious Ethics, 26 (1), pp71 –103.

www.thebuddhism.net.

www.corehumanitarianstandard.org/ﬁles/ﬁles/TAG%20member%20

list%20as%20of%2030_06_2014.pdf.

www.dec.org.uk/member-charities.

UN Oce for the Coordination of Humanitarian Aairs, ‘OCHA on

Message: Humanitarian principles’, June 2012, https://docs.unocha.

org/sites/dms/Documents/OOM-humanitarianprinciples_eng_

June12.pdf.

The pivotal role of faith leaders in the Ebola virus disease outbreak in

West Africa, CAFOD, November 2014.

Actual ﬁgure likely to be signiﬁcantly higher as this excludes much

of the funding to smaller local faith-based NGOs and civil society

organisations that is not reported to FTS.

The ﬁve pillars of Islam are Shahadah (declaration of Faith), Salah

(prayer), Zakat, Sawm (fasting in the month of Ramadan) and Hajj

(pilgrimage to Mecca).

There are two measures of the nisab: gold and silver. The gold

measure requires that Zakat be paid on all acquired wealth over

3oz of gold, or its equivalent in cash. The silver measure requires

that Zakat be paid on all acquired wealth over 21oz of silver, or its

equivalent in cash. The silver measure is signiﬁcantly lower than the

gold due to the decreased value of silver since the time of the Prophet.

Taken from The Holy Qur’an: Translation and Commentary by Abdullah

Yusuf Ali, ﬁrst published in 1934.

In Pakistan, for example, Zakat from Sunni Muslims is collected by the

state, however Shia Muslims are exempt from state collection and pay

their Zakat independently, to an agency of their choice.

Saudi Arabia, Sudan, Yemen, Pakistan, Malaysia and Libya.

Yemen, Pakistan and Sudan.

‘Abd al-Rahman al-Salimi (2015), ‘Zakāt, citizenship and the state:

the evolution of Islamic religious and political authority’, Journal of

the Royal Asiatic Society (Third Series), 25, pp57–69, doi:10.1017/

S1356186314000376.

Figure compiled using Pew Research Center data on Muslim

demographics, www.pewforum.org/2011/01/27/table-muslim-

population-by-country/, and GHA Report 2014 data.

High: Afghanistan, Chad, Mali, Haiti. Moderate: Democratic Republic

of Congo, Niger, Yemen In debt distress: Zimbabwe, Sudan. Data was

not available for six countries (Somalia, Syria, South Sudan, West

Bank and Gaza Strip, Pakistan and the Philippines), three were at low

risk (Ethiopia, Kenya, Myanmar), and the remaining two (Lebanon and

Jordan) are upper-middle-income countries and have therefore been

not classiﬁed according to their risk of debt distress.

www.muslimcharitiesforum.org.uk.

www.islamic-relief.org.

National Board of Zakat of the Republic of Indonesia (BAZNAS) and the

Central Bank of the Republic of Indonesia, ‘Towards an Establishment

of an Ecient and Sound Zakat System’. Paper presented at the

Working Group of Zakat Core Principles 2014, www.zakat-chamber.

gov.sd/english/ﬁles/zakah_core_principles.pdf; Beik, Irfan Syauqi,

‘Initiation of International Working Group on Zakat Core Principles’.

Presented at the Working Group of Zakat Core Principles 2014, www.

bi.go.id/id/publikasi/artikel-kertas-kerja/kertas-kerja/Documents/

Session%203%20Dr.%20Irfan%20Syauqi%20Beik.pdf.

www.irinnews.org/report/95564/analysis-a-faith-based-aid-

revolution-in-the-muslim-world.

See methodology section for details and accompanying spreadsheet

for a full breakdown of the data collected.

See accompanying data, available to download from GHA website,

www.globalhumanitarianassistance.org.

Pew Research Center, www.pewforum.org/2011/01/27/table-

muslim-population-by-country/.

World Bank DataBank, GDP per capita data.

www.nzf.org.uk.

www.zakat.org.

Zakat Foundation of America 2013 Annual Report.

According to the Pew Research Center there are an estimated 2.6

million Muslims living in the US, www.pewforum.org/2011/01/27/

table-muslim-population-by-country/.

US$41,788 compared with US$53,042 in the US, World Bank, data.

worldbank.org/indicator/NY.GDP.PCAP.CD.

National Zakat Foundation, ‘UK’s needy Muslims missing out as

81% of charity donations sent overseas’, www.nzf.org.uk/News/

ViewArticle/47.

NOTES

Development Initiatives, ‘Global Humanitarian Assistance Report

2014’, Development Initiatives, Bristol, 2014.

International Fundraising for 2013 included income from individual

donors, donations to the IRW website, income from the Middle East &

Emerging Market fundraising unit and Islamic Relief Ireland.

National Zakat Foundation, ‘UK’s needy Muslims missing out as

81% of charity donations sent overseas’, www.nzf.org.uk/News/

ViewArticle/47.

“The potential [of Zakat] remains unrealised as actual zakah mobilized

falls far short of its potential in most countries.” Islamic Research and

Training Institute, Islamic Social Finance Report 2014, p42.

www.dinarstandard.com/emerging-muslim-market/.

Investopedia, www.investopedia.com/terms/m/mints-mexico-

indonesia-nigeria-turkey.asp; ‘The MINT countries: next economic

giants?’, BBC News, 6 January 2014, www.bbc.co.uk/news/

magazine-25548060.

Pew Research Center, www.pewforum.org/2011/01/27/the-future-of-

the-global-muslim-population/.

Islamic Research and Training Institute, Islamic Social Finance Report

2014.

www.zakatindia.org.

Islamic Research and Training Institute, Islamic Social Finance Report

2014.

Pew Research Center, www.pewforum.org/2011/01/27/the-future-of-

the-global-muslim-population/.

Islamic Research and Training Institute, Islamic Social Finance Report

2014.

Ibid.

Pew Research Center, www.pewforum.org/2012/12/18/global-

religious-landscape-muslim/.

Pew Research Center, www.pewforum.org/2011/01/27/table-

muslim-population-by-country/.

Islamic Research and Training Institute, Islamic Social Finance Report

2014.

Ibid. Note proportions are weighted according to the volume of Zakat

collected by each institution.

http://reliefweb.int.

IRIN, www.irinnews.org/report/86617/indonesia-climate-change-

worsening-disasters-says-un.

National Zakat Foundation, ‘UK’s needy Muslims missing out as

81% of charity donations sent overseas’, www.nzf.org.uk/News/

ViewArticle/47.

We are unable to identify agencies as information was given

conﬁdentially.

Mackintosh, Kate and Duplat, Patrick, Study of the Impact of Donor

Counter-terrorism Measures on Principled Humanitarian Action, UN

OCHA and Norwegian Refugee Council, July 2013.

UN Oce for the Coordination of Humanitarian Aairs, ‘OCHA on

Message: Humanitarian principles’, June 2012, https://docs.unocha.

org/sites/dms/Documents/OOM-humanitarianprinciples_eng_

June12.pdf.

While actual administration costs of the UN as a whole are not

available, individual UN agencies report their administration costs

as being much lower than this. For example, 11% of UNHCR’s

total expenditure is currently used to cover administration (http://

www.unrwa.org/donate/questions-about-donations, ‘Using your

donation’). The UN regular budget 2012-2013 shows jointly ﬁnanced

administrative activities and special expenses at 2.5% of total budget

(http://www.un.org/en/hq/dm/pdfs/oppba/Regular%20Budget.pdf).

Development Initiatives, ‘Global Humanitarian Assistance Report

2014’, Development Initiatives, Bristol, 2014.

Abioye, M.M.O, Mohamad, M.H.S. and Adnan, M.A. (2011), ‘Antecedents

of Zakat Payers’ Trust: the case of Nigeria’, International Journal of

Economics, Management & Accounting, Supplementary Issue 19,

pp133–164; christinasaﬁyah.wordpress.com/2014/06/05/zakat-for-

social-welfare-and-international-development-2014-world-zakat-

forum/.

www.oecd.org/investment/stats/34086975.pdf.

Islamic Development Bank and UN-DESA, ‘The Role of Islamic

Finance in Sustainable Development Financing and the

Opportunities in Creating New Partnerships in the Implementation

of the Post-2015 Development Agenda’, June 2014, www.oicun.

org/9/20121119013818998.html.

Shirazi, Nasim Shah (2006), ‘Providing for the resource shortfall for

poverty elimination through the institution of Zakat in low-income

Muslim countries’, IIUM Journal of Economics and Management, 14(1),

pp133–164; Kahf, Monzer (1989), ‘Zakat: Unresolved Issues in the

Contemporary Fiqh’, Journal of Islamic Economics, 2(1), pp1–22.

Abioye, M.M.O, Mohamad, M.H.S. and Adnan, M.A. (2011), ‘Antecedents

of Zakat Payers’ Trust: the case of Nigeria’, International Journal of

Economics, Management & Accounting, Supplementary Issue 19,

pp133–164; christinasaﬁyah.wordpress.com/2014/06/05/zakat-for-

social-welfare-and-international-development-2014-world-zakat-

forum/.

Guermat, C., Al-Utaibi, A.T. and Tucker, J.P. (2003), ‘The practice

of Zakat: an empirical guide in four countries’, Economics

Department Discussion Papers Series, University of Exeter

Business School, business-school.exeter.ac.uk/documents/papers/

economics/2003/0302.pdf.

The West Bank Zakat Committees (1977–2009) in the Local

Context, Emanuel Schaubin, Centre on Conﬂict, Development and

Peacebuilding; http://graduateinstitute.ch/ﬁles/live/sites/iheid/ﬁles/

sites/ccdp/shared/Docs/Publications/WP5_2_engl.pdf

Islamic Research and Training Institute, Islamic Social Finance Report

2014; Shirazi, Nasim Shah (2006), ‘Providing for the resource shortfall

for poverty elimination through the institution of Zakat in low-income

Muslim countries’, IIUM Journal of Economics and Management, 14(1),

pp133–164; Kahf, Monzer (1989), ‘Zakat: Unresolved Issues in the

Contemporary Fiqh’, Journal of Islamic Economics, 2(1), pp1–22.

http://zakat-publications.s3.amazonaws.com/2275/zakat-foundation-

2013-anual-report.pdf

http://sanzaf.org.za/annualreport2014/

https://dzit.gov.sa/dzit-news/-/asset_publisher/Mwc0L0nwIwvj/

content

http://www.zakat-chamber.gov.sd/english/ﬁles/world_zakat_forum.

pdf

http://www.businessstartupqatar.com/44000-millionaires-in-qatar-

says-zakat-fund-ocial/

http://al-shorfa.com/en_GB/articles/meii/features/2013/08/06/

feature-03

http://www.nzf.org.uk/News/ViewArticle/47

http://www.zakatindia.org/DisasterRelief.html

http://www.irti.org/English/Research/Documents/Report-2.pdf

http://www.pewforum.org/2011/01/27/the-future-of-the-global-

muslim-population/

2726

AN ACT OF FAITH NOTES

AN ACT OF

FAITH

HUMANITARIAN FINANCING AND ZAKAT

UK office

Development Initiatives

, North Quay House, Quay Side

Temple Back, Bristol, BS1 6FL, UK

T: +44 (0) 1179 272 505

Kenya office

Development Initiatives

, Shelter Afrique Building, 4th Floor

Mamlaka Road, Nairobi, PO Box 102802-00101, Kenya

T: +254 (0) 20 272 5346

Development Research and Training

, Uganda

Development Research and Training (DRT)

, Ggaba Road

Mutesasira Zone, Kansanga, Kampala, PO Box 22459, Uganda

T: +256 (0) 312 - 263629/30

Email: [email protected] www: globalhumanitarianassistance.org