Zakat Policy

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1. Purpose

The purpose of this policy is to outline how the New Zealand Zakat Foundation (NZZF) collects, manages, and distributes Zakat funds in accordance with Islamic law (Shariah).
This policy ensures:

Full compliance with the fiqh of Zakat.
Transparency and accountability to donors.
Fair and effective distribution to eligible recipients (asnaf).
Responsible stewardship of all funds entrusted to the organisation.

2. Scriptural Basis

Zakat is a divine obligation established in the Qur’an, Sunnah, and scholarly consensus (ijma‘).
Allah ﷻ says:

“Zakat expenditures are only for the poor, the needy, those employed to collect it, those whose hearts are to be reconciled, to free captives, for those in debt, in the path of Allah, and for the traveller in need.”
(Surah al-Tawbah 9:60)

The Prophet ﷺ directed that Zakat collected from a community should be distributed among its members, unless greater benefit requires otherwise.
This principle underpins NZZF’s focus on local priority and global compassion.

3. Scope

This policy applies to:

All Zakat funds collected by NZZF.
Staff, volunteers, trustees, and partners handling Zakat.
All methods of giving, including online payments, direct deposits, and campaign appeals.

4. Guiding Principles

Shariah Compliance: All Zakat activities must conform to recognised Islamic jurisprudence.
Integrity: Zakat funds are a sacred trust (amanah); they are not to be mixed or misused.
Local Priority: Eligible Muslims in New Zealand are prioritised where need exists.
Transparency: Donors have the right to clear information on how their Zakat is used.
Accountability: Regular auditing and internal review ensure proper governance.
Dignity: Distributions must preserve the honour and confidentiality of recipients.

5. Collection of Zakat

NZZF accepts Zakat through approved channels only (website, bank transfer, or authorised representatives).
Donors are encouraged to make a clear intention (niyyah) at the time of giving.
Zakat funds are recorded separately from Sadaqah or general donations in accounting systems.
Zakat collected under a specific appeal (e.g. hardship, education, or debt relief) will be allocated accordingly, within fiqh parameters.

6. Allocation and Distribution

Zakat is distributed strictly within the eight asnaf categories:

Al-Fuqara’ – The poor
Al-Masakin – The needy
‘Amileen ‘Alayha – Administrators of Zakat (reasonable collection/distribution costs)
Mu’allafatul Quloob – Those whose hearts are to be reconciled
Fir-Riqab – Those in bondage or seeking freedom
Al-Gharimeen – Those overwhelmed by debt
Fi Sabeelillah – In the path of Allah
Ibn as-Sabeel – Travellers in hardship

NZZF primarily supports the following through Zakat:

Families in financial hardship.
Converts/new Muslims.
Widows, single mothers, and domestic violence survivors.
Those in debt and unable to repay.
Eligible education or training costs.
Humanitarian emergencies (via partners like MAA International) that meet asnaf criteria.

7. Local vs International Distribution

Local Priority: Zakat collected in New Zealand is first directed toward eligible local recipients.
International Assistance: Where urgent humanitarian crises arise, or greater maslahah (benefit) exists, NZZF may channel Zakat overseas through trusted partners (e.g. MAA International), ensuring full Shariah compliance and reporting.
The ratio of local to international allocation will be reviewed annually by the Board.

8. Administration and Governance

A Zakat Governance Committee oversees compliance, approvals, and case verification.
All recipients are verified to ensure eligibility under the asnaf framework.
Internal audits and annual financial statements confirm segregation and proper use of funds.

9. Handling Restricted Zakat

When donors specify a cause (e.g., “Zakat for debt relief”), funds will be used within that category where possible.
If demand in that area is met, NZZF reserves the right to redirect the balance to another eligible asnaf category, ensuring Zakat remains utilised appropriately and without delay.

10. Partnerships

When distributing Zakat internationally or through other agencies, NZZF will only work with:

Registered and reputable partners with proven compliance.
Partners that adhere to Islamic funding principles and provide transparent reporting.
Formal MOUs defining roles, accountability, and reporting requirements.

11. Verification of Recipients

Applicants must complete an assessment process that includes income verification, circumstances review, and reference checks where appropriate.
Sensitive cases (e.g. domestic violence or converts) are handled confidentially.
Caseworkers or authorised volunteers verify all assistance provided.

12. Record Keeping

NZZF maintains detailed records of:

All Zakat income and disbursements.
Case files and anonymised recipient summaries.
Annual allocation reports for donors and trustees.

Records are retained for a minimum of seven years and audited annually.

13. Shariah Advisory Oversight

A Shariah Advisor or Committee reviews the Zakat process, classifications, and any complex cases (e.g., investments, mixed funds, or cross-border distribution).
Their guidance ensures NZZF’s operations remain compliant with recognised Islamic jurisprudence.

14. Communication and Reporting

Annual Zakat reports summarise collection, distribution, and impact.
Donors are informed of key figures (e.g., total distributed per category).
Public education is provided through workshops, the Zakat Guide, and calculators.

15. Policy Review

This policy is reviewed annually by the Board and Shariah Advisor to ensure continued compliance, relevance, and effectiveness.
Amendments are approved by the Board and recorded in official minutes.