Reimagining Zakat management for greater impact 

Each year, Muslims around the world donate tens of billions of dollars in Zakat, the obligatory almsgiving that is one of the five pillars of Islam. 

While the generosity of these donations remains undisputed, the challenge lies in how to effectively organize and manage a massive flow of funds to ensure they reach those in need.

A particularly significant spike in donations occurs during the month of Ramadan. Though Zakat can be given at any time of the year, many Muslims choose to disburse it during the holy month, believing the spiritual rewards are multiplied. 

According to a survey by the Muslim Philanthropy Initiative, nearly 70% of US-based Muslims prefer giving Zakat during Ramadan, often through community events like fundraiser Iftars or group prayers. The same pattern is observed across the globe. Islamic Relief Canada, for instance, sees a 500-700% increase in Zakat donations during Ramadan. 

“This surge is driven by the spiritual significance of giving in Ramadan, religious obligations, and the trust donors place in organizations to distribute funds effectively to those in need,” says Mashaal Saeed, media and campaigns lead at Islamic Relief Canada.

Similarly, the National Zakat Foundation Australia experiences a surge of up to 90% in Zakat contributions during Ramadan, according to Ismail David, CEO of the National Zakat Foundation Australia. 

But the question arises: How can stakeholders harness this increased generosity to benefit the worthiest recipients? By collaboration. 

Combining digital platforms, AI, blockchain, and offline community-based efforts, charities can ensure that Zakat not only reaches the right people but also makes a lasting impact on communities in need.

Partnerships, offline strategies for efficient disbursal 

Zakat serves as a powerful tool for social support, providing Muslims with an organized methodology to assist the needy with essential resources like food, shelter, and healthcare. 

Saeed emphasizes the importance of pre-planned distribution systems that can handle the influx of donations quickly and efficiently. Many donors earmark their Zakat for urgent humanitarian aid, so rapid-response mechanisms are key to ensuring that funds reach those in crisis.

Building partnerships with local NGOs, mosques, and community organizations can also ensure that Zakat funds are distributed to vulnerable populations without delay. 

Ardiansyah Ihsan, an associate at the Indonesia-based Zakat Foundation Institute highlights the importance of traditional strategies, such as mosque-to-mosque campaigns and public talks by religious scholars, which remain effective. 

“Despite the dominance of digital channels, offline strategies still account for 40-50% of the overall campaign efforts during Ramadan,” notes Ihsan.

In addition to addressing immediate needs, many charities are focusing on long-term empowerment, combining direct aid with sustainable development programs. This includes offering skills training, microfinance initiatives, and other services aimed at improving the financial independence of recipients. 

By adopting a holistic approach to charity, Zakat can not only provide immediate relief but also help break the cycle of poverty for the long term, according to Ihsan.

Digital solutions re-envisioning Zakat collection

The rise of digital platforms has revolutionized the way Zakat is collected and managed. 

According to Saeed, online payment gateways, mobile apps, and automated recurring donations make it easier for people to contribute, while data-driven tools help identify and prioritize communities in most need. 

To raise funds this Ramadan, Islamic Relief Canada is organizing more than 10 community Iftars across the country in support of Palestine and Sudan, with the NGO selling tickets through its website.

David notes that digital platforms offer a more efficient and scalable way to collect donations, especially among the digital-savvy generation.

The National Zakat Foundation Australia is launching an online campaign - Z Connect - in Ramadan aimed at educating the community about the power of Zakat and the importance of collaboration. Moreover, the foundation is enabling users to customize and automate their daily giving for Ramadan via its app. 

Social media has also emerged as a crucial tool in Zakat campaigns. Platforms like Instagram, Facebook, and Twitter allow non-profits to engage with a global donor base, raising awareness through educational content and beneficiary stories.

“Social media is instrumental not only in raising public awareness through educational content on Zakat, storytelling of beneficiaries, and promoting organizational transparency but also in facilitating direct donations,” says Saeed.

“The presence of influencers and religious figures strengthens donors' decision-making processes. These figures help build trust and direct their audiences toward contributing to credible organizations.”

Leveraging advanced technology

Beyond traditional digital solutions, advanced technologies such as artificial intelligence (AI) and blockchain are beginning to transform Zakat collection and distribution.  

AI helps charities assess and prioritize aid more efficiently by processing demographic, economic, and environmental data, pinpointing regions where assistance is most urgently required. 

“At National Zakat Foundation Australia, we use AI to help with Zakat distribution to improve and speed up the assessment process of applications,” says David.

According to Nicolas Merle, cofounder of On The Shoulders, a France-based design studio specializing in guiding investors in sustainable finance, AI can also predict future needs and proactively deploy resources to prevent crises.

Blockchain, with its transparent and immutable ledger, offers a new level of accountability, allowing donors to track the journey of their contributions from donation to disbursement. 

Hubert Knapp, managing partner at Chavanette Advisors, believes that smart contracts on blockchain platforms could automate the entire Zakat process, from calculation to distribution, reducing the need for human intervention and ensuring timely assistance to recipients. 

However, regulatory challenges remain, especially regarding cryptocurrency and blockchain technologies. 

Islamic scholars are divided on the use of digital currencies for Zakat, which has slowed adoption in the sector. Ihsan believes that in the medium term, there is hope for further integration.

“It is essential for stakeholders, scholars, and policymakers to engage in discussions to establish regulatory frameworks that maximizes the potential of these technologies in Zakat management,” he says.