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An Act of Faith: Humanitarian Financing and Zakat

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Report Synopsis

The number, scale and severity of humanitarian crises are outstripping resources. While international humanitarian assistance continues to increase, reaching record levels in 2013, it is still not enough to fully meet needs. This scale of humanitarian needs calls for a different approach to the funding response. New and innovative sources of funding must be found and scaled up, and at the same time existing resources must be used more effectively.

One potentially significant area of charitable giving that has received relatively little attention in discussions on the current humanitarian financing crisis is faith-based giving, and Islamic financing in particular. An Act of Faith explores the purpose, scale and potential of Zakat – one of the main tools of Islamic social financing – for financing humanitarian response. It provides a basis on which to open up discussions around how that potential might be maximised – both by increasing the overall volume of Zakat collected (rather than redirecting existing funds) and improving the mechanisms available to channel Zakat to the humanitarian response.

Although interest in Zakat is growing, there has been a lack of data-led evidence of its scale, use and potential. Our research found that:

  • 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-governmental organisations (NGOs).
  • The global volume of Zakat collected each year through formal mechanisms is, at the very least, in the tens of billions of dollars. Data 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.
  • 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 has the potential to provide more.

 

There are a number of logistical and ideological questions to address if the potential of Zakat for humanitarian assistance is to be realised. Logistically, who should collect Zakat for humanitarian assistance? How and to what extent should this be formalised? What mechanisms should channel it for humanitarian response? How can conflicting interpretations on who is eligible to receive Zakat be reconciled with each other and with humanitarian principles?

The report explores these issues and highlights the need for further engagement between humanitarian and Islamic leaders to establish mutual understanding and guidance. This should be the basis for working together to improve channels between Zakat funds and the international humanitarian response system, and for efforts to increase the use of Zakat for humanitarian assistance to be combined with those of the wider development community to ensure complementarity.

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9 Comments in total

  1. muaawia suliman elhagali says:

    please register my name to attend this event personally
    Event: What role can Zakat play in future humanitarian financing?

    Date: 26 March 2015

    Time: 12.30 – 14:00

    Location: Ascham Room Bloomsbury House, 2-3 Bloomsbury Sq., London, WC1A 2RL

    Hosts: Development Initiatives”’ and Muslim Charities Forum
    thanks Muaawia

    DATE:
    16/03/2015 8:10 am

  2. Nabe says:

    The barriers to Zakat achieving its humanitarian potential and how might these be overcome must need :
    to improve access to basic services for the poorest people and empower local communities to tackle poverty.
    •Developing curricula and trainings designed to educate mandated reporters, caregivers and other professionals regarding the identification and reporting of abuse of persons with disabilities
    • Providing consultation or information to other agencies interested in the development of abuse prevention programs
    •Collaborating with other agencies to develop presentations, programs and services related to abuse prevention and improving the quality of life of persons with disabilities
    •Developing and distributing educational materials to introduce DPPC operations, the role of mandated reporters, and indicators of abuse and neglect
    • Providing background checks for service providing agencies looking to hire potential employees who may have been previously reported to DPPC as alleged abusers. Approximately 1,000 such requests are processed each month
    •Collecting and analyzing data from DPPC’s database, which tracks over 500 pieces of information on each call to the 24-Hour Hotline
    •Providing vendor surveys to service providing agencies, upon request, to assist them in identifying and correcting trends in their programs that may lead to abuse and neglect

    DATE:
    19/03/2015 1:11 pm

  3. mardilou arpon says:

    I’m just a private individual who wants to make difference in the community i live in.i was a yolanda survivor.Because of yolanda…i became aa humanitarian.Can i avail of funds coming from zakat to help people financially indistressed?

    DATE:
    31/03/2015 2:51 am

    • Chloe Stirk says:

      Hi Mardilou.

      A number of international aid agencies are supporting the long-term response to Typhoon Haiyan/Yolanda, including both Islamic relief Worldwide and Muslim Aid, both of which collect and distribute humanitarian funds through Zakat. Local aid and Zakat-collection agencies in the Philippines will also be collecting and distributing Zakat as part of their ongoing work and are likely already using Zakat as you suggest, to help people in financial distress as a result of the typhoon. I’m afraid we don’t have details of all such organisations operating internationally; I suggest you make enquiries locally, or perhaps enquire at your local mosque.

      Kind regards

      Chloe Stirk

      DATE:
      20/04/2015 10:35 am

  4. Nor Azuwa Mohd Isa says:

    I am one of the Speaker Management Team at World Islamic Economic Forum Foundation and looking for speaker to speak at our upcoming forum (11th WIEF Forum) in Kuala Lumpur on 3 -5 November 2015.
    The speaker will be speaking at the following session: MasterClass Session:
    Islamic Social Financing and the Future of Humanitarian Projects.

    Appreciate if you can recommend speakers for this session to me.

    DATE:
    14/04/2015 6:48 am

    • Chloe Stirk says:

      Dear Azuwa, Yes we’d be very happy to help with this. We will email you directly to follow up. Kind regards, Chloe

      DATE:
      20/04/2015 10:36 am

  5. (New Zakaat Report) An Act of Faith: Humanitarian Financing and Zakat | Islamic Fin says:

    […] To download the report, access data and communicate with the authors, visit the report page (by clicking here.) […]

    DATE:
    04/05/2015 10:16 am

  6. The Role of Islamic Social Financing in Humanitarian Action - British News Cloud says:

    […] recent Briefing Paper from Global Humanitarian Assistance 'An Act of Faith: Is Islamic charitable giving a promising new resource for future humanitarian assis…' makes for interesting and pertinent reading. The very nature of the question that it asks points […]

    DATE:
    10/06/2015 9:49 am

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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.

Report Breakdown

Executive Summary
Introduction
Glossary of key terms
Faith and humanitarian assistance
Zakat
What is Zakat
How is it collected?
Relevance of Zakat to humanitarian response
What is Zakat worth?
Case Studies: Saudi Arabia, Islamic Relief Worldwide
Case Studies: Untapped and growing potential scale of Zakat
How is Zakat spent?
Case Studies: Indonesia, The Zakat Foundation America
The humanitarian potential of Zakat
Domestic Response
International Response
Case Studies: Indonesia, Pakistan
Barriers to realising the humanitarian financing potential of Zakat
Logistical barriers
Ideological barriers
Other barriers
Conclusions and recommendations
Engage and share learning
Provide guidance
Improve channels between Zakat and the international humanitarian system
Combine efforts with the wider development community
Increase Zakat revenues and channel new funds to humanitarian assistance
Methodology
Acknowledgements
Notes