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Can zakat be invested to benefit the needy?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
Assalamolakum, My question is about Zakat. I pay zakat ever year and like to pick one or two families who can benefit the most from it. However, as it happens, the zakat fulfills their temporary needs. They spend money quickly and are again in need (for example widows, children, etc). Many do not know how to make good use of money (to start a small business, open a shop, etc). 1. Can I invest the money (amount of annual zakat) on behalf of the needy and pay them the profit (they remain the owners of capital and can take it from me anytime)? 2. My father runs a trust. The trust makes investments in businesses and the profits are used for charity purposes. Can I pay my zakat to his trust? Can the trust invest my zakat and pay the profit in charity? 3. Can the trust open a separate account of investments for Zakat, invest it and help the needy and poor with the profits generated? Would really appreciate your answers. Wassalam, Shams


(Fatwa: 223/H=57/th=1432)

It is not lawful. But you should give them zakah and give it in their possession. Then, convince them to give you the same amount for investment in business and tell them that you will return the capital amount and the profit. This is lawful way.
(2 & 3) Write the full detail of the trust and ask whatever you want to know by submitting the question again.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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