Zakat and Charity Management

Reading Time: 4 minutes Pakistan has a very complex relationship with charity. On one hand, a quarter of the population lives below the poverty line. On the other hand, Pakistan is one of the most charitable countries in the world where close to one percent of its GDP is donated to charity every year.

Reading Time: 4 minutes

As Ramadan approaches, our TVs are going to constantly show non-profits and charitable organizations like hospitals and schools asking for donations. The holy month sees a large spike in charity payments and zakat being given out in a festive display of religious celebration. Zakat and other kinds of charity denotes a spirit of inclusion by the haves towards the have-nots. Read about 2022 Hajj and its Quota.

Unfortunately, the country finds itself in an ever-worsening situation of heightened rates of unemployment, malnutrition, homelessness and poverty. 

The country’s infrastructure provides very little in the form of healthcare and education for its masses and such services are only available to those of a high socio-economic status. It is a dog-eat-dog world for the people of the country much more so than it was in the past as the moral fiber of the country frays further and further. In such a situation, the role of uplifting society falls to society itself in general and its government representatives in particular. 

Pakistan has a very complex relationship with charity. On one hand, a quarter of the population lives below the poverty line. On the other hand, Pakistan is one of the most charitable countries in the world where close to one percent of its GDP is donated to charity every year. A lot of money is given out for charity, and yet the same people will not submit their taxes to potentially provide a safety net in a much more effective manner for the people they are intending to help. However, this is also indicative of the lack of trust in the government to use those taxes for doing something that might help those in need in the long term either. 

Let us take a look at zakat, the culture of giving in our country, and the flaws in our government and society that prevents an improvement of our current predicament. 

A history of Zakat

Zakat, or almsgiving, is one of the most important religious obligations of Islam. Ranked second to Salat or prayer, Zakat has had a very important role in societal betterment since its introduction and implementation in the Islamic world. 

Unlike the very unjust modern approaches towards government taxation based on what you purchase rather than what you can spare, zakat is more based on the income of the individual. One in fortieth parts or 2.5% of an individual’s income or possessions are supposed to be given out in zakat. Another aspect of zakat is that the amounts given out tended not to be given to the government, rather it was based upon giving to the neediest as judged by the giver rather than an outside authority. 

The original recipients for zakat were purported to be slaves that were to be freed, stranded travelers, those in need and the hungry. The system thus developed into a form of obligatory taxation that was paid out directly towards the needy, forming a societal net that was enforced not by the government but through religious doctrine. 

This served as an efficient method of societal betterment that built upon the already established system of honor and hospitality that Arab culture had already developed as a response to the treacherous desert climes of the time. Thus the system of zakat subverted the logistical, communications, and enforcement problems that any other system of taxation would have required during such times. 

Another important aspect of zakat in its history is that there are safeguards against zakat being used as an excuse for unjust tax collection and misuse in Islamic history. According to many classic jurists, it is wajib (as in allowed and encouraged, even mandatory) to conceal possessions from a zakat collector that is unjust in collection or distribution of the zakat. 

The role of the state when it comes to zakat has evolved and changed over time and there are many arguments regarding this topic across the Islamic world. 

Charity Statistics for Pakistan

Pakistan is one of the more charitable of countries across the globe, as despite the poverty pervading the region, more than 2 Billion dollars are given out in charity every year. When it comes to zakat, about 25% of Pakistani households are receiving zakat currently while close to 35% of total Pakistani households actually qualify for receiving zakat as stated by Islamic standards. This gap is due to lack of state management in the forms of record keeping and poor distribution of zakat as well. 

The state is currently responsible for the collection and distribution of zakat due to Sunni influence, whereas the Shiite contingent of the Islamic brethren view zakat as more of an individual and personal obligation rather than something to be enforced by a possibly corrupt government. Both these views on zakat are justified by various lenses of analysis of Islamic jurisprudence but that is beside the point. 

The main issue of zakat or charity collection and distribution in the country is the lack of long-term thought when it comes to how these collected funds are invested into society. 

Effective Charity Management

Zakat management is a very difficult thing to do as it requires a level of transparency and efficiency that is not normally required of other institutions, charity or otherwise. This is because zakat is a sacred religious obligation and there is a level of trust that needs to be garnered and maintained by any institution that is responsible for the collection and distribution of funds garnered in the name of religion. 

The centralized approach currently in use by countries like Saudi Arabia, Jordan, and Morocco require a heightened level of trust in the government as layers of bureaucracy lend complexity and lethargy to the whole process. This is in addition to lack of creativity and innovation in resource management due to the distance between the collectors and those in need. 

More decentralized, delocalized, delegated, integrated, and coordinated approaches require better communication and suffer from diffused responsibility and are less likely to integrate long-term approaches towards societal improvement. 

The system in Pakistan is centralized but also delocalized in the sense that the state collects it but so do many different organizations with different goals. It is essential that the zakat collected is funneled towards providing opportunities for future income for the needy and GDP growth rather than feeding the hungry in the short-term. 

It is better to teach a man to fish, rather than have them come to large and flashy communal kitchens aimed towards PR betterment rather than the improvement of the populace through investment in education and skill development. That is the only way that the original spirit of zakat can be revived in the modern world.

Saad Rashid

This is Saad Rashid, Finance major, runner, swimmer, history nerd, and a fan of FC Barcelona. With interests ranging from Psychedelics in History to sports science, there is nothing that he will not get stuck into.

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Saad Rashid

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