How Can Zakat be Made Relevant Again?
By Mohammad Raafi Hossain, a social entrepreneurship and ethical expert
There has been a long-standing discussion among academics, practitioners and the wider community around howZakat can be made relevant again. In fact, this discussion has been going on for as long as I can remember, but despite this, over that same period of time, there has been little progress in the way Zakat is being collected and disbursed.
Yes, there are certain countries that have instituted national Zakat collection facilities. Various Islamic aid organizations have even instituted online payments to receive Zakat. Yes, much of Zakat is still based around giving it fully to an organization that will deliver it to a project that is described at a high level and with no follow-up reporting on how the Zakat ended up being utilized. Compounded to this, many Muslims are still not fully aware of the complete breadth of what constitutes Zakateligibility. Most of us know that a person who is in poverty can accept Zakat, but the Quran clearly mentions eight categories of Zakat eligibility.
And due to this, just as before, there is an ongoing frustration that, as a global community, we have failed to make Zakat an impactful facility to secure the basic needs of millions around the world. This is despite the total Zakat market valued anywhere from US$200 billion and up to US$1 trillion annually, according to a report by IRIN (originally the ‘Integrated Regional Information Networks’). This number is put into better perspective when considering that coordinated appeals by the United Nations for humanitarian assistance have been climbing for the last four years, reaching a record level of US$18 billion in 2014, according to the Global Humanitarian Assistance (GHA) 2015 UN-coordinated Appeals report.
However, funding has not kept pace with requirements: 2014 witnessed a record humanitarian funding gap of US$7.2 billion, according to the same GHA report. This US$7.2 billion, while a very large deficit, is less than 5% of the total annual Zakat-giving market, even if you factor in the lowest estimates of the size of the Zakat market. It is a deficit that Zakat givers can easily fulfill and consequently secure the basic needs of millions of distressed individuals from around the world.
For our part, Finocracy is launching Human Crescent, our small contribution in trying to realize and harness the potential ofZakat. The crowdfunding platform allows users to directly project finance UN-led humanitarian projects through their Zakat. Every project is vetted for Zakat compliance and quality of potential impact.
Our Shariah advisors went through a tireless exercise to contextualize Zakat into several contemporary categories of need, including support to refugees, internally displaced persons, victims of human trafficking, impoverished clients of predatory finance and victims of natural disasters. By contributing to several of these categories, our users can view their contributions and underlying impact through a visual portfolio, similar to how one would view their stock portfolio.
At Finocracy, we want to jumpstart the conversations around innovating Zakat to make it more impactful, and we are eager to see how other global players are planning to do the same.