What is Zakat and why is it important?
Zakat is one of the five pillars of Islam and is a significant part of the faith. It is the obligatory sharing of a fixed portion of personal wealth to those in need, observed by Muslims who meet the nisab (wealth) threshold.
In accordance with Islamic law, Muslims donate a fixed portion of their income to community members in need. This can be donating a portion of their wealth to charities or community causes.
While Zakat can be given at any time of the lunar year, it is during Ramadan that this is most commonly observed. Those who qualify for it must be able to meet a certain pay threshold.
What is Zakat?
Zakat, meaning purification, is described as the third pillar of Islam. The practical expression of this purification is giving to those less fortunate. Following this pillar means a Muslim must deduct a certain amount of their wealth in order to support the Islamic community.
Money can be put towards taking care of important holy places in an individual’s community, such as mosques. Funds can also be used to give assistance or care to those in need who are impoverished.
It’s believed Zakat can allow an individual to experience balance and growth.
As well as looking to improve holy places in one’s community or help those individually in need, a Muslim may also donate money to a charity. A GoFundMe fundraiser is simple to set up, costs nothing for the organiser, and helps spread the message of Zakat widely online as well as raising funds.
The five principles of Zakat
There are five chief principles that should be followed when giving Zakat.
These are:
- Every adult Muslim of sound mind who meets the required conditions is obligated to pay Zakat annually on their wealth. Eligibility to pay Zakat depends on several factors, including meeting the minimum wealth threshold and, in some cases, having debts assessed appropriately.
- The Zakat rate is fixed at 2.5% of eligible wealth that has been in your possession for one lunar year, provided that your wealth exceeds the nisab threshold and you will not be left without basic means after contributing.
- A person becomes liable to pay Zakat if they have possessed wealth equal to or above the nisab for a full lunar year. Once that year has passed, they must pay 2.5% of their qualifying assets.
- Zakat should be paid promptly once it becomes due, which is one lunar year after first reaching the nisab threshold.
- Zakat may only be distributed to individuals who meet the prescribed eligibility criteria for receiving it, whether in the local community or, in the case of the Ramadan Zakat Fund, internationally to the most deserving causes.
More information about the rules for Zakat can be found on the Islamic Relief website.
What is the difference between Zakat and Sadaqah?
The key difference between Zakat and Sadaqah is obligation. Zakat is a compulsory charitable contribution that eligible Muslims must pay annually, calculated as 2.5% of qualifying wealth that has been held for one lunar year. In contrast, Sadaqah is voluntary charity that can be given at any time, in any amount, and for any charitable purpose. While Zakat is one of the fundamental pillars of Islam and has specific rules regarding who pays and who can receive it, Sadaqah is a broader act of generosity that is encouraged for all Muslims regardless of their financial circumstances. Sadaqah Jariyah is a specific form of Sadaqah, which refers to committing to long-term giving, whether that’s to a specific cause or fundraising for multiple causes. GoFundMe makes it simple to set up your own fundraisers or to contribute to others’ ongoing Sadaqah Jariyah efforts.
The Importance of Zakat
Zakat is important as it’s a way for Muslims to ‘purify’ their wealth, address economic inequality and give back to their community. Put simply, Zakat means purification.
This indicates that a payment made makes the rest of one’s wealth legally and religiously pure. The principle of knowing that all things belong to God is essential to purification and growth, according to followers of Islam.
How much Zakat should you pay?
Everyone will pay a different Zakat.
In simple terms, your Zakat is calculated as 2.5% of your savings and financial assets. This can come from money that isn’t used towards living expenses.
Any income used to pay for things like bills, house payments or essential needs isn’t included in the calculation.
Nisab is the minimum amount of wealth that acts as a threshold to determine whether Zakat is obligatory. If what you own is more than the nisab threshold and have held it for a full lunar year, you must pay Zakat. If you own less, you are not obligated. Zakat is compulsory for all sane, adult Muslims who earn more than the nisab and who have held that wealth for a full lunar year (known as hawl) or more.
Gold and silver are the two values used to calculate the nisab threshold. The nisab is the value of 87.48 grams of gold or 612.36 grams of silver.
However, with that being said, if someone is not wealthy, they can compensate in different ways. This could mean good deeds and behaviour towards others.
How is Zakat distributed?
The underlying principle of Zakat is to redistribute a portion of wealth to help those in genuine need and support those who serve the faith and their community. Muslims today can pay Zakat through established organisations or charities, such as the Ramadan Zakat Fund, which will then distribute those funds on their behalf.
There are eight categories of people eligible to receive Zakat, as defined in the Quran (Surah At-Tawbah, 9:60).
They are:
- The poor (al-fuqarâ’), meaning low-income or indigent.
- The needy (al-masâkîn), meaning someone who is in difficulty.
- Zakat administrators.
- Those whose hearts are to be reconciled, meaning new Muslims and friends of the Muslim community.
- Those in bondage (slaves and captives).
- The debt-ridden.
- In the cause of God.
- The wayfarer, meaning those who are stranded or travelling with few resources.
Ramadan Zakat Fund
Each Ramadan, GoFundMe provides a simple and secure way to distribute your Zakat donation.
As funds are donated all over the world, GoFundMe’s Ramadan Zakat Fund equally distributes your Zakat to five Muslim charities with just one Ramadan donation:
- Ummah Welfare Trust: Works to provide emergency relief such as food and medical aid in times of conflict or natural disaster. It also reconstructs and maintains homes, orphanages and schools. They also help to establish medical and rehabilitation clinics and sources of clean water.
- National Zakat Foundation: The NZF works to give Zakat to those who should be receiving it in the UK. These people include some of the most vulnerable members of the community, such as the homeless, refugees, asylum seekers and the elderly.
- Orphans In Need: Orphans in Need is a Muslim charity that supports widows and orphans with a focus on sustainability, offering help to the neediest around the world. Orphans in Need believes that every child, everywhere, has the right to a happy and healthy life.
- Muslim Global Relief: MGR provides immediate help in times of disaster, whether caused by natural disasters or conflict, to help alleviate the suffering of the needy and destitute members of society anywhere in the world.
- Penny Appeal: The Penny Appeal provides aid to those in poverty across Asia, the Middle East and Africa. They help with water solutions, providing food, giving care to orphans and helping in emergencies where it is needed.
From helping those in need with food packs to helping people with housing, this is a safe way to make sure your funds are going a long way to help.
Start your own charity fundraiser with GoFundMe to meet your Zakat obligations or to make donations to worthy causes for any reason. Every online donation is protected with our GoFundMe Giving Guarantee, which means you will get a full refund in the rare case something isn’t right. Click through to learn more about how our guarantee protects you.