Zakat Policy
Helping Hand for Relief and Developmentโ
Our Zakat policy has been reviewed and endorsed by:
- Shaykh Yousef Bakeer
- Shaykh Abdoolrahman Khan
- Dr. Abu Zayed
- Shaykh Furhan Al Zubairi
- Imam Jawad Ahmed
- Dr. Jihad Saafir
- Shaykh Gyasi McKenzie
Policy:
Introduction
Making the best possible use of every donorโs dollar has always been a core priority for Helping Hand for Relief and Development. The funds entrusted to HHRD are an amanahโa sacred trustโand we have always sought to honor that trust by ensuring that donations reach those in need as promptly as possible and with minimal diversion to administrative expenses.
This commitment applies to all charitable donations entrusted to Helping Hand, but it carries particular weight when it comes to Zakat. From the earliest days of our organization, the sanctity of Zakat, and the legal and ethical obligations that govern it, have remained at the forefront of the minds of Helping Handโs leadership and staff.
Although Zakat and Muslim charitable giving are often closely associated, the reality is that for many years Zakat represented only a small portion of the total donations received by Helping Hand. As that share began to grow, Helping Hand sought formal religious guidance from the leadership of ICNA and received a written Zakat policy from Shaykh Abdool Rahman Khan.
At the same time, Helping Hand remained mindful that scholars may differ on certain nuanced questions relating to Zakat, and we also recognized that donors occasionally had questions about specific issues. In response, Helping Hand engaged an outside scholar with specialized expertise in Zakat and convened a committee that included religiously trained Helping Hand team members as well as the ICNA religious leadership involved in formulating the earlier policy. The goal was to develop a more comprehensive Zakat policyโone that thoughtfully addresses the many nuances surrounding Zakat and moves Helping Hand toward practices that can be supported across a broad range of recognized scholarly opinion.
That broader aspiration remains a work in progress, because we believe it is important that our work in the field fully reflect the standards we set out on paper. Helping Hand has also been hard at work building an endowment that will substantially change the way we deal with overhead expenses. At the same time, we have heard the communityโs call for greater transparency about our Zakat policy as it exists today. We are therefore pleased to share it here. We do so with gratitude for the trust the American Muslim community has placed in us, and with confidence that this policy will help donors better understand how we approach the handling of Zakat with seriousness, care, and accountability.
Purpose and Scope
This policy governs the receipt, classification, management, disbursement, oversight, and reporting of Zakat funds received by Helping Hand for Relief and Development. Its purpose is to guide internal practice and to provide donors with a clear understanding of how HHRD approaches the stewardship of Zakat.
This policy applies to all Zakat funds received by HHRD, whether from individuals, institutions, or other sources, and to all departments and personnel involved in the handling of those funds.
Foundational Principles
HHRDโs approach to Zakat is guided by several core principles.
Zakat is a sacred trust and must be handled with heightened care. Donor intent must be respected in full. Zakat funds must be used only for recipients and purposes that fall within recognized categories of eligibility under Islamic law. Where scholarly differences exist, HHRD seeks to proceed with seriousness and restraint, with an emphasis on positions that provide a sound and responsible basis for contemporary humanitarian work. HHRD also believes that transparency and accountability are essential parts of faithful stewardship.
Receipt of Zakat Funds
HHRD receives donations through a variety of channels, including individual giving, institutional support, and campaign partnerships. The organization maintains clear mechanisms to distinguish between Zakat and non-Zakat donations at the point of receipt. The categorization of each donation is determined directly by the donor through donation forms, online designations, campaign instructions, or other written communication.
Because the donor assigns the category and any applicable restrictions, HHRD does not reclassify donations on its own initiative. This helps ensure that donor intent is respected and that Zakat funds can be tracked separately from Sadaqah, unrestricted donations, and other sources of support.
If a donorโs instructions are unclear or incomplete, HHRD seeks clarification from the donor where possible before treating the donation as restricted Zakat. In the absence of clear designation, HHRD does not assume that a contribution is Zakat.
Segregation, Management, and Accounting Controls
To ensure accuracy, accountability, and Shariah compliance, HHRD maintains financial systems designed to clearly distinguish Zakat and non-Zakat funds throughout the accounting process.
The organizationโs chart of accounts separates Zakat-related and non-Zakat-related revenues and expenditures, and all expense categories are divided into distinct cost centers for each.
This structure allows Zakat funds to be tracked independently from receipt through allocation and final expenditure. It also helps ensure that expenditures charged to Zakat are identifiable, reviewable, and limited to eligible recipients and uses.
Finance and program teams work together to ensure that expenditures charged to Zakat correspond to Zakat-eligible beneficiaries, activities, and program costs. Where a program or field operation includes both Zakat-eligible and non-Zakat-eligible elements,
HHRD seeks to allocate costs in a manner that preserves the integrity of Zakat funds. For example, while Helping Hand generally identifies food distribution as a Zakat-eligible program, we do not use Zakat funds for food distribution in areas with non-Muslim or mixed Muslim and non-Muslim populations. If a cost cannot be clearly tied to an eligible use, it is not charged to Zakat.
Zakat Recipient Eligibility
HHRD is committed to disbursing Zakat in accordance with the divinely prescribed categories mentioned in the Qurโan, most notably the poor and the needy referenced in the verse of Zakat in Qurโan 9:60.
In practice, HHRD applies Zakat primarily to individuals and households facing poverty, deprivation, displacement, financial hardship, or comparable forms of need that place them within recognized categories of eligibility. Each program proposed for Zakat funding is reviewed to determine whether its intended beneficiaries fall within those categories.
That review may include field verification, needs assessments, beneficiary screen, program design review, and internal financial and compliance review. Depending on the nature of the program, eligibility may be established through review of individual recipients or through reliable evidence that defined population overwhelmingly falls within recognized categories of need. In either case, HHRD seeks to maintain a disciplined and documented basis for treating recipients of Zakat-funded assistance as eligible.
Method of Distribution
HHRD recognizes that tamleekโthe transfer of ownership to an eligible recipientโhas been emphasized by many scholars as a preferred and clear method of Zakat distribution. For that reason, direct disbursement to qualified individuals remains a primary approach wherever feasible, whether through cash assistance, or other forms of direct transfer that place meaningful ownership or control in the hands of the recipient.
At the same time, HHRD also recognizes scholarly opinion that supports the use of Zakat in certain circumstances to provide direct and meaningful benefit (manfaโah) to eligible recipients through structured assistance. Depending on the context, this may include interventions such as medical care, educational support, debt relief, shelter-related support, or other necessary services directed to verified Zakat-eligible beneficiaries.
Accordingly, HHRD prioritizes direct ownership where feasible, while also permitting service-based or program-based support where the beneficiaries are Zakat-eligible, the benefit delivered is direct and necessary, the expenditure is traceable to those beneficiaries, and the use of Zakat for that purpose is supported by recognized scholarship.
In circumstances involving widespread hardship, displacement, or crisis, HHRD may also consider broader conditions of public need (แธฅฤjah โฤmmah) and collective welfare (maแนฃlaแธฅah) when evaluating the proper use of Zakat, particularly where essential interventions are necessary to preserve life, health, safety, or basic human dignity among populations that are overwhelmingly Zakat-eligible. Even in such cases, HHRD seeks to ensure that the use of Zakat remains closely tied to the relief of eligible need.
HHRD also prioritizes the timely distribution of Zakat and does not treat Zakat funds as monies to be held indefinitely. As a matter of practice, HHRD seeks to disburse Zakat promptly and distributes all Zakat funds within one calendar year of receipt.
Zakat-Eligible Programs and Exceptions
HHRD may apply Zakat to programs and campaigns whose beneficiaries are determined to fall within recognized categories of eligibility and whose design permits Zakat funds to be used in a manner consistent with this policy.
Zakat-eligible programs may include the following:
- Emergency Relief
- Orphan Support
- Education Support
- Skills Development & Livelihood Healthcare and Nutrition Children withย Disabilities
- In-Kind Gifts
- Seasonal Programs
Not every charitable or humanitarian activity carried out by HHRD is funded by Zakat. Some projects are supported through Sadaqah, unrestricted donations, matching gifts, or other non-Zakat resources because their beneficiaries are not limited to Zakat-eligible recipients, because their structure does not allow for sufficiently clear allocation of Zakat, or because HHRD has determined that using non-Zakat funds is more appropriate.
Where a program includes both Zakat-eligible and non-Zakat-eligible beneficiaries, or combines eligible and non-eligible components, HHRD does not treat the entire program as automatically Zakat-eligible. Instead, HHRD seeks to identify the portion that may properly be funded with Zakat and excludes the remainder. If that distinction cannot be made with sufficient confidence, Zakat is not used for that portion of the program.
Certain programs may be Zakat-eligible only in limited circumstances or with additional screening. In some settings, for example, a program serving orphans, students, families, or other vulnerable groups may include both eligible and non-eligible recipients. In such cases, Zakat is used only where eligibility can be established or reasonably determined under HHRDโs review process.
Administration of Zakat
HHRD recognizes that one of the questions donors care most about is whether, and to what extent, Zakat funds are used for administrative costs. HHRD approaches this issue with caution and with a commitment to keeping such costs limited.
HHRD also recognizes that, under the Qurโanic category of al-โฤmilฤซn โalayhฤ, certain limited costs directly tied to the collection, administration, oversight, and distribution of Zakat may be a valid use of Zakat funds. At the same time, HHRD understands this category to be a narrowly define one, rather than a broad or general classification. Zakat funds are not treated as the organizationโs own revenue, but as entrusted funds designated for eligible recipients. For that reason, HHRD does not treat the โฤmilฤซn category as a basis for broad institutional overhead or unrestricted administrative spending. Rather, it is limited to compensation and related costs directly connected to the recognized function of administering and disbursing Zakat.
The actual percentage of Zakat used for overhead expenses may vary from year to year based on fundraising conditions, program structure, and other operational factors. However, as an organization, HHRD is committed to keeping the portion of Zakat used for overhead expenses at 12.5% or less.
HHRD uses this percentage of Zakat to cover the salaries and related personnel costs of employees whose work is directly connected to the administration and delivery of Zakat-eligible assistance.
HHRD does not use Zakat to fund expenses that are not directly tied to the recognized administration and disbursement of Zakat. This includes fundraising expenses, solicitation commissions, influencer or promotional arrangements, honorariums, and general institutional expenses that cannot be specifically allocated to Zakat-eligible work. Occupany and other overhead expenses are covered through general donations, matching gifts, or other non-Zakat. The purpose of these limits is to ensure that the โฤmilฤซn category is applied only within its proper scope and does not become a justification for charges that fall outside the recognized administration of Zakat.
Internal Oversight and Compliance
HHRD maintains internal controls to help ensure that this policy is followed in practice. These controls include donor-directed classification of funds, segregated accounting, cost-center-based tracking, review of program eligibility, and coordination between finance and program teams before and during the expenditure of Zakat funds.
Programs or expenditures proposed for Zakat funding are reviewed to ensure that they correspond to eligible recipients and uses. Finance personnel are responsible for maintaining the accounting segregation of Zakat and non-Zakat funds, while program personnel are responsible for supporting the beneficiary and programmatic basis for Zakat eligibility.
Audit and External Oversight
At the end of each fiscal year, HHRDโs financial transactions, including Zakat and non-Zakat receipts and expenditures, are subject to a comprehensive audit by an independent external audit firm. Among other things, this audit helps verify that funds were categorized based on donor instructions and that expenditures were made in accordance with donor restrictions and organizational policies.
This external review provides an additional layer of assurance that Zakat funds are being handled responsibly, transparently, and in a manner consistent with the organizationโs internal controls.
Reporting to Donors
HHRD believes donors should be able to understand, at a meaningful level, how Zakat funds are handled and what kinds of impact those funds make possible. For that reason, the organization provides reporting through a combination of policy disclosures, financial controls, audited financial statements, campaign updates, and, for certain programs, donor-facing impact reports.
The form of reporting may vary depending on the nature of the donation and the structure of the program. Some sponsorship-based or specifically designated projects may include individualized or project-level reporting. These may include, for example, sponsored orphans, sponsored children with disabilities, cataract surgeries, home construction, water projects, washroom projects, certain sponsored projects within emergency responses, and other designated programs for which HHRD maintains donor reporting mechanisms. New reporting categories may be added over time as systems improve and donor expectations evolve. Additionally, for donors making significant individual contributions, customized or personalized reports are available.
Not every Zakat donation will generate a personalized report tied to a single recipient or transaction, particularly where funds are pooled and deployed through larger humanitarian programs. In those cases, HHRD seeks to provide donors with meaningful transparency through broader program reporting, financial accountability, and public explanation of how Zakat is managed.
Policy Review
HHRD understands that questions relating to Zakat can be complex, particularly in the context of modern humanitarian work. The organization therefore views this policy as a serious statement of current practice, while also recognizing the importance of periodic review as operations evolve, donor expectations develop, and further scholarly guidance becomes available.
Any future revisions to this policy will be guided by the same principles that inform it now: fidelity to Islamic teaching, respect for donor intent, careful stewardship of funds, and a commitment to transparency and accountability.