Improve zakat management

IN Malaysia, zakat distribution has a positive, but small impact on aggregate consumption. It should cover other forms of monetary aid that can generate a continuous flow of income for recipients. Recently, there were improvements in the form of business capital, business tools, business financing and working salary.

When managed properly, zakat has the potential to help achieve national development goals, i.e. economic empowerment. In Indonesia, the United Nations Development Programme (UNDP) began harnessing it for Sustainable Development Goals (SDG) projects by partnering with Baznas, the national zakat collection body. The latest is a partnership to support Covid-19 economic recovery.

The potential size of the annual zakat pool was estimated between US$200 billion and US$1 trillion by the World Bank and Islamic Development Bank Group (IDBG) in 2016. And the aggregate resources pooled together from the potential zakat collection in 17 Organisation of Islamic Cooperation (OIC) countries will be enough to fund resources for poverty alleviation in all OIC countries combined.

Besides providing shelter, food, clothing, medication, education and transportation, we need to empower the beneficiaries (asnaf ). Empowerment should include mentoring and strengthening self-confidence. There is room for improvement.

Zakat institutions need to be expanded and enhanced to build a new dimension, especially in zakat distribution, so that it becomes competitive locally or even globally. Effectiveness of zakat management relates to the distribution mechanism, the quality and professionalism of the administrator and transparency in the governance and the institution itself.

For example, the latest report in the Pusat Pungutan Zakat (PPZ) website is from 2018. While the amount collected is shown, how much was distributed through the various schemes was not reported.

Additionally, zakat is administrated by the Islamic Religious Council (IRC) in every state and is responsible for determining the asnaf qualification and the type of relief. It may not be wise for each state to have its own strategies and mission, which may lead to duplications.

We also need contemporary Islamic perspectives. Even for muallaf (one of the asnaf ), there are many interpretations. Can we have a new discourse on zakat management? Should we have only one zakat management instead of one in each state?

We need the concurrence of the Conference of Rulers to save time, effort, manpower and reduce duplication. There will be more money available that can be distributed and a standard comprehensive priority assessment system introduced.

“Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful” (Quran Al-Isra 17:27). The principle of sustainability includes active participation of all sections of the community in all aspects and creating an ecosystem that will benefit all.

Invite big and successful Muslim businesses, universities, top motivational speakers and business coaches to assist. All states must cooperate. For example, Selangor can provide a piece of land for asnaf in Klang Valley or from other states to carry out business activities in a central location.

It has to be high value-added, high gross margin projects and synergistic where economies of scale can be achieved. It can be a self-contained township that could, with proper planning and sincere efforts, later transform into an industrial and/or technological hub.

There needs to be proper planning, implementation, monitoring and periodic assessment. Management will be selected from the present crop of administrators and guided by successful personalities to upgrade managerial and financial literacy.

I’m very sure there are many who are willing to help. Where necessary, get assistance from international bodies like UNDP. Between 2015 and 2020, KL (PPZ) and Lembaga Zakat Selangor collected more than RM8 billion. Nationwide, the figure is much more.

Let us be more focused and improve on accountability to make the zakat institution a success in achieving social and economic stability.