Answered by Shaykh Yūsuf Badāt
Please kindly answer the following questions:
- Is it permissible for an organization that receives donations from the public to utilize an amount from their Zakāh accounts, for other islamic projects? Such as purchase of property? And once general donations are received, to return the amount taken from the Zakāh account?
- What is the Islamic ruling of financial transparency for an Islamic non-profit public organization?
- What is the importance of knowing where funds come from for an Islamic organization?
- What is the status of the by-laws and constitution of an Islamic organization operating in Canada?
Jazāk Allāh Khayr/ Thank you for your questions. Please find the answers to your questions below:
In general, funds donated for a specific cause should only be utilized for that purpose. The donor’s wishes are to be respected. This is a trust upon the representatives who are in charge of operating the organization. Almighty Allāh states in the Qur’ān,
“Indeed, Allāh commands you to render trusts to whom they are due” (Qur’ān: 4:58).
“The signs of a hypocrite are three: When he speaks he lies, when he makes a promise he breaks it, and when he is given a trust he breaches it.” (Bukhārī)
Zakāh (mandatory charity) is an obligation that has stringent rules. Any organization collecting Zakāh funds should adhere to all the Islamic laws. One of these rules is that Zakāh funds must be distributed immediately to the rightful poor recipients. Hence, it should not be laying around in the accounts; rather it should be distributed to the poor and needy at the earliest. (See: AlMughnī and Fatāwa al-Lajnah). The Prophet Muḥammad (peace and blessings upon him) never delayed in distributing charity. He said,
“I remembered a piece of gold lying in my house so I have immediately ordered it to be distributed (in charity).” (Bukhārī)
If an Islamic organization wishes to undertake a project, they should utilize the appropriate funds for that. It is not suitable to use Zakāh or Sadaqah funds for new projects. That being said, if an organization has shuffled funds around in their accounts, they should return the Zakāh to the appropriate account and have the Zakāh be distributed to the rightful poor as soon as possible. It is also worthy to note that if an Islamic organization is to undertake a new project, they should not do so if it will entail inappropriate activities such as shuffling of Zakāh or Sadaqah funds and delaying its distribution.
“One of the signs of the day of Judgement is that Zakah funds [and charity] will be mismanaged.” (See Tirmidhī)
Islamically, transparency is a must for any public non-profit organization. All financials should be by the book and consistently made available to the public. Omar (may Allāh be pleased with him) said,
“Refrain from dodgy and ambiguous matters or else you will be accused of wrongful doings.” (Makārim al Akhlāq)
It is permissible for Islamic organizations to only accept from reliable sources. Prohibited sources, such as from the earnings of gambling is not permitted.
“He who falls into the doubtful matters falls into that which is unlawful” (Bukhārī),
“Allāh is pure and He accepts only what is pure.” (Ṣaḥīḥ Muslim)
From the Islamic point of view, as Canadian Muslims, we must adhere to the constitution and by-laws of operating organizations in Canada. This is an Islamic obligation.
“It is necessary upon a Muslim to listen to and obey the ruler, as long as one is not ordered to carry out a sin.” (Bukhārī)
And Allāh Knows Best