Zakat

1. Purpose

The purpose of this policy is to ensure that any scholarships or educational assistance funded through Zakat contributions are distributed in full compliance with Islamic Shariah principles, particularly the guidelines outlined in Surah At-Tawbah (9:60) regarding eligible Zakat recipients.This policy ensures that educational assistance funded by Zakat is provided only to individuals who qualify under the appropriate Zakat recipient categories and that the funds are administered with transparency and accountability.

2. Zakat Eligibility for Educational Assistance

Educational scholarships funded through Zakat may only be awarded to individuals who meet one or more of the following categories:

 

Eligible Zakat Recipients

• ✓ Al-Fuqara (The Poor) — Students who do not possess sufficient financial means to cover their basic living or educational expenses.
• ✓ Al-Masakin (The Needy) — Students whose available financial resources are insufficient to meet tuition, educational, and basic living costs.
• ✓ Al-Gharimin (Those in Debt) — Students who have accumulated legitimate educational debt and lack the financial ability to repay it.
• ✓ Fi Sabilillah (In the Path of Allah) — Educational programs that benefit the Muslim community and support students pursuing knowledge that contributes positively to society and the community.

3. Financial Need Requirement

All scholarships funded through Zakat must be needs-based.To determine eligibility, the organization may request documentation such as:

• ✓ Financial aid award letters
• ✓ Tuition statements
• ✓ Proof of income
• ✓ Documentation of financial hardship
• ✓ Student loan or debt information

Merit-based scholarships alone do not qualify for Zakat funding unless the student also demonstrates financial need.

4. Permissible Use of Zakat Educational Funds

Zakat funds may be used for:

• ✓ Tuition payments
• ✓ Mandatory university or school fees
• ✓ Required books or academic materials
• ✓ Essential housing related to education
• ✓ Basic educational expenses necessary for the student to continue their studies

Zakat funds may NOT be used for:

• ✓ Luxury or non-essential student expenses (not included in use)
• ✓ Travel unrelated to education (not included in use)
• ✓ General organizational operating costs unless permitted under Shariah guidance

5. Payment Distribution Guidelines

• ✓ Whenever possible, Zakat funds should be paid directly to the educational institution on behalf of the student.
• ✓ In cases where direct payment is not possible, funds may be provided to the student with clear documentation of the intended educational purpose.
• ✓ All payments must be recorded and traceable.

6. Zakat Fund Segregation

• ✓ Zakat funds must be tracked separately from general donations and non-Zakat scholarship funds.
• ✓ The organization’s accounting system must maintain clear records showing:
  • ✓ Zakat received
  • ✓ Zakat allocated
  • ✓ Zakat distributed to eligible recipients

7. Verification and Review Process

• ✓ Verification of financial need
• ✓ Confirmation of enrollment
• ✓ Review by internal scholarship committee or authorized personnel
• ✓ Documentation confirming Zakat eligibility

8. Transparency and Donor Intent

Donors who designate their contributions as Zakat will have their funds used strictly in accordance with Zakat eligibility guidelines.The organization will maintain documentation demonstrating that:

• ✓ Zakat funds were distributed to qualified recipients
• ✓ Zakat funds were used for permissible purposes

9. Compliance and Oversight

• ✓ Organizational leadership
• ✓ Finance and compliance staff
• ✓ Scholarship or Zakat review committee

Periodic internal reviews may be conducted to ensure ongoing compliance.

10. Policy Review

This policy will be reviewed periodically to ensure continued compliance with:

• ✓ Islamic jurisprudence (Fiqh of Zakat)
• ✓ Organizational governance standards
• ✓ Financial transparency requirements