Q: Is it permissible for an organisation or charity that collects and distributes zakat funds to use zakat income to cover costs that are incurred directly as a result of the zakat distribution process, e.g. salaries of caseworkers or fieldworkers, IT systems to manage data in relation to recipients of zakat, office space for zakat distributors etc?
Sometimes it can prove difficult for such an organisation to rely exclusively on relatively unpredictable non-zakat income to cover such costs and can lead to inadequate staffing levels in the administration of the zakat income to the highest possible standards.
Use of zakat funds would ensure that the organisation is adequately resourced to deal with the level of demand that it receives from needy and destitute applicants and that it can distribute zakat funds as efficiently and as effectively as possible in a manner that truly transforms the situation of the recipient.
الجواب حامدا ومصليا ومنه الصدق والصواب
A: It should be noted that organisations and charities that are essentially NGO’s are not authorised deputies of the leader of the Muslim state and consequently do not fall under the category of ‘aamileen mentioned in the Holy Qur’an [9:103] nor do they enjoy normative legal representation on behalf of the poor. Rather, they are agents of those disbursing zakat, and until the zakat is received by its rightful recipients, it remains payable upon the original owners.
Thus zakat revenues received by such organisations and charities cannot be utilised directly for administration purposes under this category. For further discussion see: https://alqalam.org.uk/fatawa/can-charities-be-considered-as-al-amileen/
However, if the real costs incurred by such organisations and charities as a direct result of the zakat distribution process cannot be met by non-zakat income then the organisation may set up a process whereby eligible applicants authorise the organisation to receive zakat on their behalf thereby establishing representation on their behalf and then utilise it according to the approved policies of the organisation.
This process requires careful application and a high degree of personal responsibility and accountability on behalf of the organisation and so it is important that the organisation has adequate and transparent financial and Shari’ah-compliance audit arrangements. Such measures should also be used only as a last resort and the organisation should ideally attempt to limit such use of the zakat monies to a maximum ceiling of 12.5%.