Premium

The Utilization of Zakat in Profit-Generating Projects Without Transferring Ownership to Individual Beneficiaries (Translation)

A paper presented to the Third Conference of the Council of the International Islamic Fiqh Academy, Held in Amman, Jordan from 8-13 Safar 1407H, corresponding to 11-16 October 1986 CE.

The Definition of Zakat : Lexically, it means cleansing and growth. Allah, the Exalted, says: [قَدْ أَفْلَحَ مَنْ زَكَّاهَا]

“Whoever purifies [their soul] is successful” (al-Qurʾān, 91:9).

That is, whoever cleanses it from impurities. It is said: ‘zakā al-zarʿ’ the vegetation grew and increased. In Sharīʿah terminology, it is the transfer of ownership of property to its entitled beneficiary based on specific conditions. This means that those who own the nisāb (quantum) of zakat are obliged to give a specific portion of their wealth ‒ by transferring ownership of it ‒ to the poor and other prescribed beneficiaries of zakat who will be explained below. The Hanbalī School defines zakat as ‘the obligatory right of a specific group to particular property at a specific time’.

The Ruling and the Evidence

Zakat is one of the five pillars of Islam and is mentioned alongside ṣalāh in 82 verses of the Qurʾān. It is an obligation ordained by Allah in His Book and through the Sunnah of His Messenger (ﷺ), and its legal status is established by the consensus (ijmāʿ) of Muslim scholars.

It is authentically reported in the major Hadīth collections from Ibn ʿAbbās (radiy Allāhu ʿanhumā) that when the Prophet (ﷺ) sent Muʿādh ibn Jabal (radiy Allāhu ʿanhu) to Yemen, he instructed him:
“You are going to a people of the Scripture, so call them to testify that none has the right to be worshipped except Allah and that I am the Messenger of Allah. If they accept that, then inform them that Allah has made five daily prayers obligatory upon them. If they accept that, then inform them that Allah has made zakat obligatory upon them, to be taken from their rich and given to their poor. If they obey that, then take it from them, but avoid taking the best of their wealth. And beware of the supplication of the oppressed, for there is no barrier between it and Allah.”
Al-Tabarānī narrated in al-Awsat and al-Ṣaghīr from ʿAlī (radiy Allāhu ʿanhu) that the Prophet (ﷺ) said:
“Allah has made it obligatory upon the wealthy among the Muslims to pay a portion of their wealth sufficient to meet the needs of their poor. The poor will not suffer hunger or nakedness except due to the actions of the wealthy among them. Be aware that Allah will hold them to a strict account and will punish them severely.”

Al-Tabarānī noted that this Hadīth is only reported through Thābit ibn Muhammad al-Zuhdī.