Are charities allowed to deduct zakat from zakat and sadaqa donations?

In a Nutshell: No, Islamic charities cannot deduct their operational costs from Zakat or Sadaqa donations they receive. Zakat is a mandatory obligation for eligible Muslims and charities are entrusted with distributing it entirely to those who qualify according to Islamic law. Table of ContentsIntroduction Background and Context Evidences Analysis of the Question Misconceptions Objections FAQs (Zakat Deductions) Conclusion Introduction Zakat and Sadaqa are two important pillars of financial charity in Islam. Zakat is a mandatory obligation for every Muslim who meets the specific criteria of wealth and residency. Sadaqa, on the other hand, refers to voluntary charitable acts. This answer explores whether Islamic charities are allowed to deduct their operational expenses from Zakat and Sadaqa donations they receive. Evidences And establish prayer and give zakat and bow with the bowing [in prayer] (Al-Baqarah 2:43) The alms (zakat) are only for the poor and the needy and those employed to collect [them] and for bringing hearts together [to Islam] and for freeing captives [or slaves] and for those in debt and for the way of Allah (SWT) and for the traveler [who is stranded]. [This is] an obligation from Allah (SWT). And Allah (SWT) is Knowing, Wise. (At-Taubah 9:60) The Messenger of Allah (saw) enjoined zakat upon the rich of his Ummah [community], to be given to the poor of his Ummah. (Sahih al-Bukhari 1400) Whoever has wealth that reaches the nisaab [the minimum amount liable for zakat] and a year passes over it, then he must give zakat of it. (Sahih Muslim 1700)Prominent Islamic jurists like Imam Malik (RA), Imam Shafi'i (RA) and Imam Abu Hanifah (RA) all emphasize the independent obligation of Zakat and the importance of its full distribution to the designated recipients. the Question The concept of deduction in the context of Zakat refers to the act of subtracting an amount from the total Zakat owed before distributing it to the designated recipients. Islamic charities play a crucial role in facilitating Zakat collection and distribution. However, they are not permitted to deduct their operational costs from Zakat donations. Here's a breakdown of the reasons:Distinct Nature of Zakat and Sadaqa:Zakat is a compulsory act of worship, a right of the poor upon the wealthy. The Quran and Hadith clearly specify its obligatory nature and designated recipients. Sadaqa, on the other hand, is voluntary charity. [The Prophet (saw) said] 'Give zakat to the poor who are rightfully entitled to it.' (Sahih al-Bukhari 1405)Importance of Transparency and Accountability:Distributing the entirety of Zakat to those in need ensures transparency and fulfills the religious obligation. Deducting expenses could lead to ambiguity regarding the actual amount of Zakat collected and raise concerns about the proper distribution of funds. The Messenger of Allah (saw) said, 'Whoever appoints someone and takes an oath of allegiance from him and then another person comes whom he considers better than the one to whom he gave the oath of allegiance, then he should relieve the first one of his oath and give the oath of allegiance to the one whom he considers better.' (Sahih Muslim 1718) This Hadith, although referring to a different context, emphasizes the importance of fulfilling obligations and commitments. Similarly, fulfilling the obligation of Zakat requires distributing the entire amount entrusted to the charity.Potential for Mismanagement:Allowing deductions could create an incentive for mismanagement or diverting funds from their intended recipients. Clear guidelines and oversight ensure responsible handling of Zakat. Misconceptions Charities can utilize Zakat for their own running costs. Zakat donations are strictly designated for specific categories outlined in the Quran and Hadith, such as the poor, needy and those in debt. Charities must manage their operational expenses through separate means, such as fundraising for administrative costs or seeking Sadaqa donations. Donors can deduct their operational expenses from their Zakat amount. The calculation of Zakat is based on the total wealth exceeding the nisaab (minimum threshold) after a year. Donors cannot subtract any expenses, including charitable overheads, from their Zakat amount. Objections Allowing deductions might incentivize higher Zakat contributions. The primary motivation for Zakat should be fulfilling a religious obligation and seeking Allah's (SWT) pleasure, not maximizing tax benefits. Furthermore, encouraging transparency and responsible management practices within charities can build trust and potentially lead to increased Zakat contributions. Charities need a financial cushion to operate effectively. Charities can address their operational needs through alternative means. Here are some options:Seeking separate Sadaqa donations specifically designated for administrative costs. Implementing efficient administrative practices to minimize operational expenses. Exploring fundraising initiatives to support their activities. These approaches ensure that Zakat funds are distributed entirely to those entitled to receive them, while allowing charities to maintain their operations effectively. FAQs (Zakat Deductions) Can charities use Sadaqa donations for their operational costs?Yes, charities can utilize Sadaqa donations for their operational expenses. Sadaqa is voluntary charity and donors generally do not specify the exact purpose of their donations. Using Sadaqa for administrative costs aligns with the flexibility characteristic of voluntary charity. How can donors ensure their Zakat reaches the intended recipients?Donors can choose reputable and trustworthy charities with a proven track record of transparent Zakat collection and distribution. Research the charity's policies, track record and commitment to Islamic principles before donating Zakat. Conclusion Islamic charities cannot deduct operational costs from Zakat or Sadaqa donations. The core principles outlined in the Quran, Sunnah and scholarly opinions emphasize the distinct purpose, mandatory nature and specific distribution guidelines Zakat. Allowing deductions could jeopardize the fulfillment of this important duty in Islam, compromising transparency and potentially diverting funds from their intended beneficiaries. Charities have an obligation to facilitate the collection and distribution of Zakat in accordance with Islamic principles for the benefit of those in need. While operational expenses are an essential aspect of their work, they must seek alternative sources of funding, such as voluntary Sadaqa or fundraising, for their operational needs. Upholding these principles ensures that the full value of Zakat reaches its intended recipients, contributing to a more equitable and just society and fulfilling the spiritual intent of this pillar of Islam. ReferencesInvestopedia. (2023, January 11). Zakat: The Basic Rules for One of the Five Pillars of Islam. Retrieved from https://www.investopedia.com/terms/z/zakat.asp