The discussions in the forum emphasized on creating synergy between Zakat and Waqf and integrate both the institutions together in institutional design and delivery as well as in public and social policy in member countries.
Needs fall in two categories, i.e. cash assistance needs as well as non-income needs.
Zakat can help in asset transfers, cash assistance and income support. On the other hand, Waqf can be used to provide services, such as education, training, medical assistance and so on.
Zakat can meet personal emergencies while Waqf can be utilized for building infrastructure and capacity to ensure development beyond need-fulfilment.
Zakat is vital for poverty alleviation, preventing hunger and income and wealth redistribution. On the other hand, Waqf can check private wealth concentration and allow direct provision of public social safety nets through which social services flow to the deprived segments of the society continuously.
It was emphasized that the role of Zakat and Waqf is critical in providing income support to those whose livelihoods have been affected by Covid-19.
It was also highlighted that the effective administration and governance of Zakat is vital in bringing trust, increasing participation, widening donor base and improving efficiency and impact of the whole system.
Speakers also urged on efforts to raise literacy, awareness and responsibility to pay Zakat. People must be educated about how much Zakat to pay on different forms of wealth and income. It is important that wealthy people having the obligation to pay must pay and should not avoid it just because of lack of information, clarity and awareness.
Simplified smart calculators in multiple languages with chat-bot assistance on website and apps can also help in swift and correct calculation of Zakat liability.
To increase awareness and access, it is important to leverage technology. App-based messages and SMS can be used to create awareness. Various payment platforms can be engaged to allow payment from multiple mediums to enhance inclusion in Zakat eco-system for both donors and beneficiaries.
Technology can be leveraged in collection, administration and disbursement. For effective targeting, filtering, monitoring and impact assessment, technology can be used to maintain real-time database.
Access to multiple platforms of payment will make it easier for Muzakki (Zakat-payer) to pay and it will allow greater mobilization of funds, which is necessary for financial sustainability of Zakat institutions as well to carry out their welfare work and disbursements seamlessly. Technology can also be used to connect financial platforms, welfare institutions and private Zakat collectors for effective monitoring, interaction and collaboration.
The speakers also highlighted challenges in Waqf management, such as passive investments, less flexibility in allocation, low liquidity and low professionalism and efficiency. However, it was reiterated that these challenges can be overcome with effective management, governance and administration.
In disbursement and allocations, there are two alternatives, cash versus service. Cash assistance allows fulfilment of emergency needs, but there is high flexibility with beneficiary and less control by Muzakki over Mustahiq (Zakat-receiver).
Providing service ensures development and capacity enhancement related objectives to foster socio-economic mobility. There is need for both and Zakat and Waqf can be integrated to meet both the needs.
The speakers also noted the importance of resolving Fiqh based differences through OIC Fiqh academy. It is necessary to institutionalize Zakat centrally. Else, people will either want voluntary filing of Zakat returns or ask for rebates based on differences in scope and mode of Zakat on different types of wealth, assets and income in different Fiqh.
World Zakat Performance Index was discussed which uses multiple criteria on dimensions like legal foundation, Zakat supervision, Zakat reporting, Zakat collection and Zakat disbursement to allow measuring performance of Zakat institutions. Such performance gauging measures can promote professional management, efficiency and transparency in the system. The indicators promote transparency, effective governance, monitoring and efforts to scale collection, disbursement and enhance social impact.
Categories: Articles on Islamic Economics