ZAKAT POLICY AND PROCEDURE V1.0 - GRT EXTERNAL SHARIAH ADVISOR IS MUFTI LIQUAT ZAMAN FROM THE AS-SUFFA INSTITUTE BIRMINGHAM APPROVED BY BOT'S: ...
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Zakat Policy and Procedure V1.0
GRT external Shariah Advisor is Mufti Liquat Zaman from the As-Suffa Institute
Birmingham
Approved by BoT’s:
Date: 12/02/2021
Review Date:Zakat Preamble
Zakat is the third pillar of Islam. It is a religious obligation on every individual to contribute 2.5%
of their savings to those eligible.
Any Muslim who meets the Zakat threshold (also known as the Nisab threshold), is obligated to
contribute a portion of their wealth.
The Nisab threshold is the minimum wealth a Muslim possesses to be eligible to contribute their
Zakat.
Gold and silver are the two values used to calculate the Nisab threshold. The values include:
• 87.48 grams of gold
or
• 612.36 grams of silver.
There are eight categories of people who are eligible to receive Zakat contributions. These
include:
1. Fuqara – Poor or the impoverished
2. Masakin – Destitute and Deprived
3. Amilin – Administrators i.e., those who collect and distribute Zakat
4. Muallafat al-Qulub – those whose hearts are to be reconciled ie for new Muslim’s and
support social cohesion
5. Riqab – Emancipation i.e., freeing of slaves or captives
6. Gharimin – Those in debt i.e., removal of financial debt
7. Sabilillah – God’s cause i.e., supporters and scholars providing external and internal
protection
8. Ibn Sabil – Traveler in need ie those who are stranded or traveling with little resources
GRT POL ZKH V1.0 2Zakat Policy and Procedure
Global Relief Trust (GRT) reserves the right to cancel or to suspend this policy or its application at any
time and whether in whole or in part. This policy does not create enforceable rights in favour of
Trustees, staff or third parties claiming compensation in case of infringement. This policy shall not
form part of or otherwise be incorporated into a staff member’s or third party’s contract or
otherwise have contractual effect. In the event of a conflict with the law, the law prevails.
1. Purpose
1.1. This policy sets out Zakat distribution principles and guidance.
2. Scope
2.1. This policy applies to all employees (whether permanent, fixed-term, temporary), casual
workers and Zakat eligible beneficiaries.
3. Policy statement
3.1. Zakat funds will be considered as a restricted fund.
3.2. Zakat will primarily be given to the Fuqura (Poor) and Masakin (Needy)
3.3. If the need arises, Zakat will be considered for the other six categories; Amilin (Administrators),
Muallafat al-Qulub (those whose hearts are to be reconciled), Riqab (Emancipation), Gharimin
(Those in debt), Sabilillah (God’s cause), Ibn Sabil (Traveler in need). Guidance from scholars
will be sought for these categories.
3.4. Zakat will be given to the beneficiary either as cash or as commodities. If services such as
education, vocational training or even medical assistance are intended from Zakat donations
for the beneficiaries, then this will be processed using the Wakalah (Agency) and or Hila Tamlik
Model (see Appendix 1).
3.5. The Zakat Administrators will have discretion to whom they give the Zakat to within the
parameters of Shariah rulings and this policy.
3.6. Any beneficiary expecting Zakat who “may” appear to be Zakat eligible will be asked to
complete an application form and to confirm that their Zakatable assets are less than the Nisab.
They may also be asked to present evidence of their eligibility (statement, bills, supporting
evidence of any current issues).
3.7. Zakat fund may be used to pay staff involved in distributing Zakat.
3.8. Up to a maximum of 12.5% of the Zakat fund may be used to pay the Zakat Administrators
(Amilin).
4. Training and Communication
4.1. Training on this policy forms part of the induction process for all new workers who are
involved in Zakat activities. All existing employees receive regular, relevant training on how
to adhere to this policy.
GRT POL ZKH V1.0 35. Who is responsible for the Policy
5.1. The CEO has overall responsibility for ensuring this policy complies with our legal and
ethical obligations, and that all those under our control comply with it. The CEO has the
responsibility on behalf of the Trustees for monitoring the correct implementation of
this Policy. Management at all levels are responsible for ensuring those reporting to
them are made aware of and understand this policy and are given adequate and regular
training on it.
5.2. All employees are responsible for the success of this policy and should ensure they
use it to disclose any suspected danger or wrongdoing.
5.3. This policy does not form part of any employee's contract of employment and it may
be amended at any time.
6. Review
6.1. This Policy will be reviewed every two years and updated in accordance with legal
requirements.
.
GRT POL ZKH V1.0 4Appendix 1
The Wakalah Model
Preamble
Literally Wakalah means protection or remedying on behalf of others. Legally Wakalah refers
to a contract where in this case a beneficiary (Muwwakil) authorizes another agent (Wakil) to
perform a certain well-defined action on his behalf. It is a contract of agency, which means
doing any work or providing any service on behalf of any other. An agent is someone who
establishes contractual relations between a beneficiary and GRT. An action performed by an
agent on behalf of the beneficiary will be deemed as an action by the beneficiary. The agency
is necessitated by the fact that an agent has to perform certain tasks, which the beneficiary
has no time, knowledge and the skills to perform themselves.
The beneficiary needs to clearly stipulate that any eligible Zakat to be provided should be given to
the agent who will distribute the Zakat as per to the agreed service.
The services that could be provided under this model are: education, vocational training,
sustainable projects and health projects. This list is not exhaustive.
The Wakalah model functions in the following manner:
Zakat recipients make GRT UK an agent on their behalf to receive zakat funds and spend it on
their needs, according to the policy of GRT. This is by means of a clause that the recipient signs –
see Wakala form:
• GRT receives Zakat donations, which are considered as restricted funds.
• Where Zakat funds are to be used for services for the beneficiary then the beneficiary
completes the Wakala form making GRT the agent.
• GRT will carry out the service as discharged and pay the third parties for its services.
• The third party then takes possession as their own right as a fee for services, as a gift or
grant.
GRT POL ZKH V1.0 5Wakala Form – Agency Agreement
Name of Beneficiary:
Address of Beneficiary:
Age:
Gender:
Address of Guardian:
Contact Details:
Name of Guardian if Beneficiary under the age of 18:
Address of Guardian:
Contact Details:
Project Details:
Statement:
I give consent to Global Relief Trust UK receiving and disbursing Zakat funds on my behalf in a
manner that the organisation sees fit and in line with the project stipulated above.
Signature of Guardian:
Date:
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