Islamic Giving

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What is Zakat?

Zakat is:

The third pillar of Islam
An obligatory act of worship (not a tax) based on Quran and Sunnah
Every Muslim man or lady is required to pay 2.5% of their lawfully acquired wealth
exceeding the minimum amount (nisab) for basic needs
Every lunar year

Non muslims, those not of sound mind, those whose wealth is not lawful and those whose wealth has not reached the level of nisab are not obliged to pay Zakat.

When and how to pay Zakat?

While Zakat can be paid any time during the Islamic lunar year, many people prefer to pay it during Ramadan. If someone dies, Zakat should be paid from their estate before the distribution of the remainder of their estate. According to Hadith Zakat should be paid as soon as it becomes due because the poor become the rightful owners in the sight of God.

Zakat should be paid as a religious act, preceded by a clear intention (premeditated). It should be paid with a spirit of kindness and well wishing. The giver should not expect any benefit and the giver and recipient should not be reminded of it afterwards.

O ye who believe! Cancel not your charity by reminders of your generosity or by injury, like those who spend their substance to be seen of men, but believe neither in Allah or in the Last Day. They are in Parable like a hard barren rock on which is a little soil; on it falls heavy rain which leaves it a bare stone. They will be able to do nothing aught with what they have earned. Al-Baqara 2:264

Who should Zakat be paid to?

The Qur'an (9:60) specifies eight categories of people to whom Zakat may be donated

Zakat collectors (amilna alayha) who collect and distribute Zakat
Destitute people ("miskeen") who are those who do not have sufficient resources for their basic needs
Poor people ("fuqara") who cannot make ends meet but do not ask for help out of modesty and self respect
Muslim converts (mu'allafatu'l qulub) who may be estranged from their families and are in need of help
Emancipating slaves (fi'r riqab) who in current times included trafficked children, bonded labour, child labour, child soldiers, migrant workers whose passports have been confiscated and those exploited through threat of force
Debtors (al gharimin) who are overwhelmed by debt
Defending or establishing Islam (fi sabillah) which includes establishing Islamic centres, writing lectures, soldiers fighting a just war
Travellers (Ibnus sabil) who are stranded while travelling and need money, such as refugees.

Specifically Zakat may not be paid to those capable of earning, building mosques, maintaining roads etc.

What are the benefits of paying Zakat

Reaffirms faith and expresses commitment and trust in God
Brings forgiveness and wipes out sin; charity extinguishes sin as water extinguishes fire
Increases blessings
Creates a society that is not selfishly blinded to the poverty which exists and takes responsibility for helping to alleviate this
It can enable the poor to escape from desperate situations
It encourages the circulation of wealth within society and enlarges the circle of monetary exchange
It develops a sense of justice and selflessness
It develops mercy and compassion for the less fortunate
It makes giving a regular part of life

Such formal aspects of Islam are a means of personal and spiritual growth for each believer. Combined with faith these actions are rituals and provide a means for purification of the soul and control of the "nafs".

How is Zakat different from Sadaqa?

Whereas Zakat is an obligation and seen as the right of the poor, additional, voluntary charity is called "sadaqa". Sadaqa comes from an Arabic word meaning "truth" and "honesty", whereas Zakat means to "grow" or "purify".

Sadaqa ia entirely optional, ranging from a smile to the establishment of a permanent asset such as a well or school. It may be given at any time and in any amount. Muslims are encounraged to give to charity at all times according to their means.

Sadaqa Jariya is a special form of Sadaqa which provides a continuous service, and as a consequence brings continuous rewards for the contributor even long after he or she has passed away. It includes digging a well, building an orphanage, mosque or school or distributing knowledge. "If a human dies, then his good deeds stop except for thee: a Sadaqa Jariyah (continuing charity) a beneficial knowledge, or a righteous child who prays for him" (Sahih Muslim)