Zakat as the foundation of Islamic finance

November 11, 1:50 AMKansas City Muslim ExaminerKimm Henry

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The proper collection and distribution of zakat is vitally important to the goal of a strong unified community. While, there are many Muslims in the this city and around the US in dire struggles who either do not know where to ask for help, feel ashamed to ask for help, or have found the process to be cumbersome and humiliating yet are members of the qualifying groups eligible for zakat. And worse when one does finally ask for the help that he/she is entitled to under Islamic jurisprudence he/she as frowned upon and looked upon as beggar.

As the economy weakens we see more and more appeals for help on community forums but most of these appeals go unanswered because the majority of Muslims think that zakat funds should be available for such emergent appeals. Of course, they are correct - zakat should be available. Unfortunately, that it is not the reality.

As the zakat is being sent outside of the communities often even without an accounting to international aid organizations that have specific agendas and high overhead. Another startling trend occurring with zakat is that it is being sent to large national organizations to be held and disbursed through a bureaucratic system that it is not equipped to know personally those who are entitled to the zakat.

Those people who are entitled to the zakat should never have to ask nor should internet campaigns be ran to find support for those who qualify for the zakat. People should not have to apply nor should they suffer silently but they should be found by those responsible for the zakat.

A common misconception is that zakat is charity but it is actually a right of those falling into the mandated categories. Zakat serves the function of dispensing an obligation of the believer. If the zakat is dispersed appropriately no Muslim would ever have the need to ask for any support.

There have been many elaborate systems set up to try and collect and distribute the zakat efficiently yet the solutions seem to fall short worldwide. Zakat is not designed to keep the poor in a perpetual state of need but to uplift the global community. 

Those entrusted with the zakat must recognize that to reach out ones hand is a most humiliating act therefore if a person is in such need as to have to ask they have already humbled themselves. Therefore it is imperative that the system under go a dramatic change. Zakat distribution can not, as some jurists have suggested, be treated as a business yet it is the very foundation of the financial strength of our communities.

The zakat is most effective when collected, consolidated, and distributed in its originating location because it immediately impacts the communities financial strength. When the zakat is collected, dispersed, and distributed to bureaucratic institutions it can not be guaranteed that the zakat will reach all who are entitled which results in topical solutions worldwide while never really completely uplifting its recipients.

When the zakat is collected and distributed by the mandates of the Quran and the sunnah the wealth of the community grows exponentially as well as the sadaqah reserves.

Zakat is a trust from Allah,swt and we are the trustees. Allah,swt always puts things in terms that are easily understood by man and makes no exception in the codicil that details these issues. In this world if a person makes a trust fund and turns the funds over to trustees the trustees must by threat of punishment adhere to the codicil of the trust. Even if the trustee believes that a deviation from the terms of the trust serves the greater good. If a trustee deviates from the terms of a trust he will be held financially and criminally liable. If the laws around a trust created by man are so stringent, we must know that  the laws around a trust created by Allah,swt will be reconciled as well.

The laws regarding the zakat are not arbitrary but they are filled with wisdom. Unlike general or state welfare funds zakat can not be subject to cuts or reallocation.

In the coming weeks we will take an in depth look at the mandates laid out in the trust of the zakat. While all Muslims are made well aware of their obligation to return a modest percentage of their wealth to Allah,swt in the form of zakat, few have an understanding of their true rights and obligations regarding this pillar of faith.

What is the real impact of local collection and distribution?

In a local community the Masjid reports serving 8,000.00 Muslims. This number does not reflect service from the five other area Masjids; it has been said that there are actually 25,000 Muslims living in the metropolis but since 8,000 is the only published number we will use it as an assumption.

We will further assume that 25% of the people are not required to pay the zakat and that 1% percent of the people are beneficiaries of the zakat. Thus we have an assumption of 6,000 people paying the zakat and 80 local people benefiting from the zakat.

The final assumption is that those beneficiaries will receive 1 years average living expenses in the amount of 20,000.00. And those paying the zakat have zakatable assets averaging15, 000.00 so at 2.5% they are paying 375.00 dollars each.

Year One
6000.00 x 375.00 = 2,250,000.00
Excess: 650,000.00
80 x 20,000.00 = 1,600,000.00

Year Two
Assume that 50% of last year's beneficiaries no longer qualify for Zakat and 25% of last year's beneficiaries are now able to pay zakat.
20 x 375.00 = 7,500.00
Excess: 22,500.00 + 650,000.00 = 672,500.00
40 x 375.00 = 15,000.00

Year Three                                                                                                                                                                 Same assumption as year two.
10 x 375.00 = 3,750.00
Excess: 11,250.00 + 672,500.00 = 683,750.00
20 x 375.00 = 7,500.00

Year Four                                                                                                                                                                   Same assumption as  year two.
5 x 375.00 = 1,875.00
Excess: 5,625.00 + 683,750.00 = 689,375.00
10 x 375.00 = 3,750.00

Year Five                                                                                                                                                                    Same assumption as year two.
2.5 x 375.00 = 937.00
Excess: 2,812.00 + 689,375.00 = 692,187.00
5 x 375.00 = 1,875.0
 

The chart above is demonstrative of how the zakat will grow over five years These numbers show that distribution of zakat locally actually increases the wealth of zakat and since the local Muslims in need are cared for they are not shamed into begging sadaqa thus increasing the amount of voluntary sadaqa available for a myriad of charitable causes. The calculations also show an excess that allows for zakat to be sent in large amounts to countries in severe economic crisis.                                                                        

A complex system that doesn't work can usually be corrected by a simple that has been proven to work. Thus the system employed Muhammed over 1400 years ago is still the most applicable system to alleviate poverty,grow wealth, and fulfill our obligations.

A new coalition KCMEC has formed in the Kansas City metropolis whose mandate is the empowerment of the community through education and micro financing visit their blog at http://kcmec.blogspot.com