Zakat Policy
Penny Appeal USA Zakat Policy
- All Zakat donations received by Penny Appeal USA are internally tagged as Zakat for use exclusively for Zakat-eligible programs.
- When a Zakat donation is designated to a certain program by a donor, this restriction will be respected and the funds are used solely for the donor’s intended purpose to the greatest extent possible, unless doing so becomes impossible due to unforeseen external circumstances.
- When a Zakat donation is not designated to a specific program by the donor, Penny Appeal USA allocates the funds according to the eight categories of Zakat-eligible programs as outlined in the Quran (see below). Note that Penny Appeal USA strongly encourages donors to make their donations unrestricted, providing us greater flexibility to respond to urgent needs.
- Zakat-eligible projects are identified based on need and per the eight categories noted in the Quran (9:60):
- ‘al fuqara’ (the poor)
- ‘al masakin’ (the chronically needy / indigent)
- ‘al amilina alayha’ (the administrators of Zakat funds)
- ‘al mualafati qulubhum’ (those that incline their hearts towards good)
- ‘f’il riqabi’ (freeing of slaves / those in bondage)
- ‘al gharimina’ (those in debt)
- ‘f’il sabili-llahi’ (in the way of God)
- ‘al sabili’ (the traveler)
- In line with category C (“the administrators of Zakat funds”), a portion of Zakat funds collected are eligible to be allocated toward covering operational costs which enables us to ensure impactful distribution and monitoring of funds (such as gasoline for delivery vehicles, salaries for monitoring staff, and accounting fees for financial oversight). Some organizations feel pressured to publicly advertise unsustainably low – or even 0% – overhead numbers for their Zakat, or to promote the widely held, although jurisprudentially non-binding, perspective that a 12.5% allocation for pure administration is an acceptable level. We recognize that providing high-quality, impactful programming at a significant scale in the long term requires regular investments in professional staff, technology, marketing, and training, especially given that our programming takes place in some of the most challenging operating environments in the world (Afghanistan, Gaza, Yemen, Somalia, and Syria, among others). We therefore endeavor to keep our spending on administration for incoming program designated Zakat donations, at all times, as low as responsibly possible, never exceeding 12.5%. Kindly let us know if you would like to support the overhead cost so we never have to use any Zakat donation to support the operations.
- Penny Appeal USA agrees with the position that Zakat donations are intended for distribution as immediately as is feasible, rather than for accumulation by the distributor. As such, we make every possible effort to disburse Zakat funds as rapidly as possible, intending to not do so later than within one calendar year of their collection.
