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We’re committed to collecting and distributing Zakat in accordance with Sharia, and in an honest and ethical manner. We believe this is paramount to fulfilling our organisational values, such as Ihsaan (excellence) and Amana (custodianship). Therefore, we have consulted the expertise of some of the leading and most respected Islamic scholars to uphold Islamic Relief’s Zakat Policy.
A Zakat Advisory Board, made up of a group of respected scholars, have provided oversight and verification of the distribution of Zakat by Islamic Relief.
It is made up of the following renowned scholars:
Islamic Relief’s Zakat policy has been reviewed and confirmed to be in accordance with Shari’a by Sheikh Abdullah al-Judai.
Islamic Relief’s Zakat policy has been reviewed and confirmed to be in accordance with Shari’a by Mufti Abdul Qadir Barkatulla (Sharia Judge at Islamic Sharia Council, London).
Islamic Relief’s Zakat policy has been reviewed and confirmed to be in accordance with Shari’a by Sheikh Mohammad Akram Nadwi.
Admin / or Support Cost – Direct Support and Indirect Costs
Charities SORP: A Statement of Recommended Practice which sets out how charities should prepare their annual accounts and report on their finances. The SORP is an interpretation of the underlying financial reporting standards and generally accepted accounting practice.
IR: Islamic Relief (refers to members of the Islamic Relief family).
IRW: Islamic Relief Worldwide.
IR Member: This refers to Islamic Relief Offices that have signed a licence agreement with IRW.
IR Family Council: This consists of the CEOs or Directors of the IRW Members, and each IR-Members having signed the license agreement with IRW.
Poverty: According to the United Nations, poverty is the inability to have opportunities, and a violation of human dignity. It means the lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, being unable to access education or healthcare, not having assets from which to generate a dignified living, and not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households, and communities. It means susceptibility to violence, and often implies living in marginal or fragile environments, without access to clean water or sanitation (UN Statement, June 1998 – signed by the heads of all UN agencies).
Rightsholders: Individuals or social groups that have particular entitlements in relation to duty-bearers. Duty-bearers are defined as state or non-state actors, e.g., Islamic Relief, that have the obligation to respect, protect, promote, and fulfil the rights of rightsholders. A directly reached rightsholder will have either registered and received one or more project/programme inputs from IRW or its IR Family members, and/or participated as a registered attendee in activities organised by IRW or its IR Family members, and/or had documented access to services provided by IRW or one of its IR Family members.
Zakat: One of the five pillars of the Islamic faith requiring Muslims who meet the necessary criteria to give a part of their wealth each year to a charitable cause.
“The Messenger of Allah, may Allah bless and grant him peace said ‘Islam is based on five things: Testifying that there is no god except Allah and that Muhammad is the Messenger of Allah (shahada); establishing the prayer (salat); paying the zakat; the Hajj; and the fast (sawm) of Ramadan.“
– Imam Bukhari
“Alms are meant only for the poor, the needy, those who administer them, those whose hearts need winning over, to free slaves and help those in debt, for God’s cause, and for travellers in need. This is ordained by God; God is all knowing and wise.”
– Al Qur’an: Surah Tawbah: Verse 60
Zakat is a duty mandated by Allah (SWT) upon any Muslim who is in possession of wealth over a certain threshold. Throughout the Qur’an, zakat is mentioned alongside prayer, emphasizing the sacred and essential nature of zakat as an act of worship. Zakat is a unique mechanism which calls for the compulsory redistribution of wealth from the rich to the poorest and most vulnerable members of society. As a core pillar of Islam, the Qur’an teaches that zakat is not a matter of voluntary charity, but a matter of social justice and protecting the rights of the poor.
The benefits of zakat are both spiritual and worldly. Firstly, zakat purifies both the wealth and the heart of the payer of zakat, instilling in them virtues of humility, generosity, detachment from worldly things and providing them with a means to attain closeness to Allah (SWT). Zakat should provide the recipient with a means of lifting themselves out of poverty and need in a manner that protects their dignity. Secondly, by developing social security networks for the poorest and most vulnerable members of society and developing bonds of brotherhood and sisterhood between all levels of the community, zakat helps create flourishing societies, united by mutual love and concern.
As one of the fundamental pillars of Islam, Islamic Relief Canada believes that zakat should be at the core of our work. Islamic Relief Canada is in a unique position to assist Muslims in fulfilling their obligations by providing a means for their zakat funds to assist in protecting lives and dignity, strengthening communities, and lifting people out of poverty around the world.
As such, Islamic Relief Canada takes the responsibility placed on them by donors, rightsholders, and Allah (SWT) Himself seriously in order to distribute zakat in accordance with Islamic values and teachings. This policy seeks to ensure that Islamic Relief Canada’s global zakat activities are in full accordance with the teachings of Islam, thus enabling Islamic Relief Canada to fulfil its responsibility in the best way possible.
Islamic Relief Canada recognises the importance of transparent and accountable governance of zakat funds based on the overarching principles outlined in the Qur’an and Sunnah from a theological perspective. In addition, Islamic Relief Canada abides by the legislative requirements as dictated by the Government of Canada Nonprofit Law, Income Tax Act, Canada Revenue Agency Charities Directorate, and the various provincial and territorial legislations.
This policy ensures a consistent approach to zakat funds and that detailed and relevant guidance is centrally disseminated. This policy will assist with:
This policy governs the whole of Islamic Relief Canada, including any organizations implementing projects using IRC’s Zakat funds. It will have implications on the following areas of our work:
The overall aim of the Zakat Policy is to ensure that Islamic Relief Canada’s zakat activities are in full accordance with the teachings of Islam, thus enabling Islamic Relief Canada to fulfil its obligation in the best way possible.
The specific objectives are:
Any Islamic Relief Canada regional team seeking to collect Zakat should:
Zakat funds are given for a specific purpose and can only be used for zakat eligible purposes as defined in the eight categories of zakat. The accounting records of IRC should distinguish the income and spend between zakat funds and other funds.
Marketing & Fundraising
Islamic Relief Canada will respect the wishes and conditions which its donors place on their donations. However, in the case of zakat, IRC’s policy is that donors must be encouraged to give zakat to a general zakat fund.
This is due to the need to ensure that zakat is spent as swiftly as possible. Since the obligation of paying zakat will not be fully discharged until the right holder receives the zakat, donors should be advised against placing conditions on zakat that may prevent it from being spent in the most quick and effective manner on those who need it most.
As such, IRC’s policy regarding fundraising zakat is that:
The Qur’an clearly outlines the eight categories of people who are eligible to receive zakat:
These boundaries are set by Allah (SWT), and IRC believes that we – as zakat – will be held accountable by Allah (SWT) for how we distribute zakat funds, and the extent to which we adhere to the conditions and parameters set by Allah (SWT).
As such, Islamic Relief Canada will only distribute zakat to rights holders (directly or through projects) making sure there is individual ownership for the categories outlined above. When allocating zakat to projects, or applying for zakat funds to utilize in projects, Finance and programs must keep records as to how this project matches the criteria of zakat.
While the categories themselves are clearly set, their definition and interpretation – particularly in the contemporary context – require some clarification.
1. Fuqara & Masakin (Poor & Needy)
2. Al ‘Amilina ‘Alayha (The Administrators of Zakat)
Islamic Relief Canada is a legitimate administrator of zakat. IRC in effect is a duty-bearer, with a responsibility to respect, protect and fulfill the rights of rights holders on whose behalf zakat funds have been collected.
3. Al-Mu’allafati Qulubuhum’ (Reconciliation of Hearts)
Whilst IRC is inspired by its values, and proactively seeks to educate our supporters regarding Islamic values and teachings on poverty alleviation, as a humanitarian agency we do not engage in any proselytization activity. As such, IRC does not undertake any zakat activities under the category of mu’allafati qulubuhum.
4. Riqaab (Emancipation of Slaves)
The use of Zakat funds can rightfully be used for the emancipation of slaves. While projects of this nature are not the primary focus of Zakat spending for IRC, where IRC finds people suffering from a modern form of slavery – such as bonded labour, forced labour, or human trafficking – zakat funds may be utilised to emancipate people from such forms of slavery (provided that the funds do not profit perpetrators of such acts who have violated national or international law).
5. Gharimeen (Those in Debt)
6. Fi Sabeelillah (In the Cause of Allah)
7. Ibn As-Sabeel (The Travelers)
The term “reserves” is used to describe that part of a charity’s funds that is freely available for its operating purpose not subject to commitments, planned expenditure and spending limits. Reserves do not include endowment funds, restricted funds, and designated funds.
Zakat funds held have a direct impact on calculating free reserves.
The zakat funds (less than 12.5% of total zakat funds) should be excluded in calculating IR’s free reserve position.