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