Q: Is Zakat paid on a local initiative where money is collected to be distributed to needy local individuals?
Two brothers run a small initiative, whereby people give monthly donations (usually £10) which goes into a separate account for that specific purpose/initiative. This money is then distributed to local people (by the 2 brothers) who are in need and in some sort of financial difficulty and is not used for the 2 brothers personal benefit.
Do they have to pay Zakat on this money that is donated to the initiative?
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: The two brothers are not required to give Zakat as they are agents of the donors. However, the donors may have to. To avoid this, the two brothers should set up a properly constituted endowment (waqf) which would own the £10 donations and thus the donors would have no Zakat liability in relation to their donations.