• Report
  • 26 March 2015

An Act of Faith: Humanitarian Financing and Zakat

The number, scale and severity of humanitarian crises are outstripping resources. While international humanitarian assistance continues to increase, reaching record levels in 2013, it is still not enough to fully meet needs. This scale of humanitarian needs calls for a different approach to the funding response. New and innovative sources of funding must be found and scaled up, and at the same time existing resources must be used more effectively.

One potentially significant area of charitable giving that has received relatively little attention in discussions on the current humanitarian financing crisis is faith-based giving, and Islamic financing in particular. An Act of Faith explores the purpose, scale and potential of Zakat – one of the main tools of Islamic social financing – for financing humanitarian response. It provides a basis on which to open up discussions around how that potential might be maximised – both by increasing the overall volume of Zakat collected (rather than redirecting existing funds) and improving the mechanisms available to channel Zakat to the humanitarian response.

Although interest in Zakat is growing, there has been a lack of data-led evidence of its scale, use and potential. Our research found that:

  • In 2013, faith-based organisations received and delivered between US$420 million and US$434 million (15–16%) of all international humanitarian assistance channelled through non-governmental organisations (NGOs).
  • The global volume of Zakat collected each year through formal mechanisms is, at the very least, in the tens of billions of dollars. Data collected for Indonesia, Malaysia, Qatar, Saudi Arabia and Yemen, which make up 17% of the world’s estimated Muslim population, indicates that in these countries alone at least US$5.7 billion is currently collected in Zakat each year.
  • Between 23% and 57% of Zakat currently collected is used for humanitarian assistance, depending on the context in which it is raised and used. It is therefore likely that Zakat is already a significant source of humanitarian financing in many places, and has the potential to provide more.

 

There are a number of logistical and ideological questions to address if the potential of Zakat for humanitarian assistance is to be realised. Logistically, who should collect Zakat for humanitarian assistance? How and to what extent should this be formalised? What mechanisms should channel it for humanitarian response? How can conflicting interpretations on who is eligible to receive Zakat be reconciled with each other and with humanitarian principles?

The report explores these issues and highlights the need for further engagement between humanitarian and Islamic leaders to establish mutual understanding and guidance. This should be the basis for working together to improve channels between Zakat funds and the international humanitarian response system, and for efforts to increase the use of Zakat for humanitarian assistance to be combined with those of the wider development community to ensure complementarity.

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