Shariq Siddiqui: A look at zakat, the Muslim act of giving

U.S. Muslims are more likely to view zakat, or obligatory alms, as an act of philanthropy or charity rather than as a tax imposed on them by the state or by religious authorities, according to a new report by the Muslim Philanthropy Initiative at Indiana University Lilly Family School of Philanthropy.

Muslim American Zakat Report 2023 is the result of an annual survey of U.S.-based Muslims and the general population. U.S. Muslims’ top three preferred causes of zakat distribution are hunger alleviation, poverty alleviation and immediate relief, while the three least important causes are self-employment, advocacy and economic empowerment.

Zakat, obligatory alms for all eligible Muslims, is the third of the five pillars of Islam. It is often described as an alms tax and a form of financial worship. An individual’s intention determines whether a zakat is charitable or not.

There are an estimated 3.45 million Muslims in the United States. While only 1% of the population, they are highly diverse (Black, Arab, Asian, Latino and white), with no one ethnic group representing a majority. To sustain and further religious and cultural identity, this small community gives $4.3 billion to philanthropy—of which 85% remains in the United States, and poverty remains its first priority according to the report.

More than half of the Muslim respondents in the report were eligible to pay zakat on their wealth and income. This is a large portion of the U.S. Muslim population that is required to give. It is also noteworthy that U.S. Muslims give zakat in diverse ways. The largest percentage of zakat is given informally and directly to individual causes and recipients, while the smallest percentage is given to the government, perhaps indicating a certain level of mistrust. A majority of the respondents give zakat during the Muslim holy month of Ramadan, followed by periodically throughout the year, during Dhu al-Hijja (the month of the Muslim pilgrimage of hajj), and at the end of the financial year.

U.S. Muslims are more likely to give zakat to the same organizations each year, allowing not-for-profits to retain zakat donors. They are less likely to give to the same individuals over time. This suggests that these donors are willing to help individuals directly but not repeatedly. This difference of approach of organizations versus individuals might suggest an interest of seeing zakat as a tool for development.

Moreover, U.S. Muslims surveyed stated they are aware of the Qur’anic verses concerning zakat, that these verses are clear and easy to understand, and that they feel they know enough about zakat and its benefits, while feeling only slightly less confident about how to calculate it.

Beyond their understanding of zakat, U.S. Muslims strongly agree that it is a social obligation as well as a religious one and that the poor have a right to receive zakat. Muslims also believe zakat is an effective mechanism for wealth redistribution.

Furthermore, our findings suggest that not-for-profit practitioners, scholars and community organizers need to pay close attention to issues of zakat literacy and education in their fundraising practice. Most important, zakat remains an interpersonal and communal practice that is nourished by direct relationships.

Zakat is an important form of philanthropic giving among Muslims. U.S.-based not-for-profits should better understand how to raise funds for causes that align with U.S. Muslim priorities of hunger alleviation, poverty alleviation and immediate relief to be able to take advantage of an estimated $1.8 billion of zakat funds in the United States. However, doing so will require an understanding of Islam, Muslims and U.S. Muslim donors.•

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Siddiqui is assistant professor and director of the Muslim Philanthropy Initiative at the Lilly Family School of Philanthropy at Indiana University. Send comments to ibjedit@ibj.com.

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