Zakat Policy

This policy sets out how iF charity receives, manages, and distributes Zakat funds in full accordance with Sharia principles and trustee’s fiduciary duties.

1. What is Zakat?

Zakat is one of the five pillars of Islam and holds profound spiritual and social significance. It purifies wealth, strengthens empathy within the community, and redistributes resources to those most in need. Every Muslim whose wealth exceeds the Nisab threshold, equivalent to 87.48 grams of gold or 612.36 grams of silver (approximately £500 at current rates, at the time of writing), is obliged to pay 2.5% of their qualifying assets as Zakat each lunar year. Calculate your Zakat here.

Zakat applies to all forms of wealth, including cash, savings, gold, silver, business assets, digital currencies, investments, and pension funds, after deducting outstanding debts and liabilities. By fulfilling this obligation, donors not only purify their wealth but also contribute to alleviating poverty and fostering social equity.

2. How is Zakat collected?

Zakat funds are received when the donor clearly declares their intention (niyyah) that the contribution is to be treated as Zakat and so becomes specified on our system. This declaration must be made at or before the time of payment to ensure the religious obligation is fulfilled correctly.

All Zakat received by the charity is collected through secure and approved channels, including bank transfers, online payments, and cash contributions. Upon receipt, Zakat funds are specified, segregated and recorded on our donation management system and are classed separately from other forms of donations such as Sadiqah, Lilah, or other general funds.

Online donations are specified as zakat by the online donation form, over the phone donations and card present donations are specified on card machines and or our donations management system. iF charity does not take any deductions from specified Zakat contributions for administrative or operational costs. This ensures that 100% of every Zakat donation is distributed directly to eligible beneficiaries.

3. How is Zakat distributed?

Zakat is distributed only to the persons categorised in the Qur’an (asnaf):

• The poor (al-fuqarāʾ): Individuals with insufficient means of livelihood.
• The needy (al-masākīn): Those who cannot meet their basic needs.
• Zakat administrators (al-ʿāmilīn ʿalayhā): Individuals responsible for collecting and distributing Zakat.
• Those whose hearts are to be reconciled (al-muʾallafatu qulūbuhum): New Muslims and friends of the Muslim community
• Those in bondage (fiʾr-riqāb): Individuals seeking to free themselves from slavery or captivity.
• The debt-ridden (al-ghārimīn): People overwhelmed by debts incurred to meet basic needs.
• In the cause of God (fī sabīlillāh): Those striving in the path of Allah, including various forms of charitable work.
• The wayfarer (ibnu as-sabīl): Travelers stranded or in need of financial assistance.

Zakat funds are never invested or held as reserves. They are disbursed as promptly as operationally possible, and always within the financial year of collection. In the context of Gaza and Palestine, contemporary scholars have affirmed that all affected Palestinians are eligible for Zakat, given the extreme poverty, displacement, and deprivation they face. Accordingly, the charity allocates Zakat distributions for Gaza under this scholarly guidance, ensuring all assistance reaches those in genuine need within the permissible categories.

iF charity prioritises liquidity in all disbursements, preferring cash payments, bank transfers, or digital disbursements wherever possible, as this best fulfills the principle of ownership and immediate benefit. All Zakat collected is distributed within twelve months of receipt, ensuring that the obligation is fulfilled promptly and without unnecessary delay.

iF charity maintains full and transparent records for every stage of the Zakat process, from collection to distribution. All Zakat receipts and disbursements are recorded in a dedicated ledger within the accounting system, separate from other funds.