Managing zakat through ınstitutions: case of Malaysia

Abstract

Uniquely, zakat is featured as the major tool of Islamic wealth redistribution that routinely collects designated amounts of public money from zakat payers and channels same to identified beneficiaries in accordance with the principles of the shari’ah. It is, therefore, essential to organize and develop institutions to manage this wealth. This paper analyzes the Malaysian zakat system, assesses its performance by studying the collection and disbursement mechanisms. The paper is qualitative descriptive-analytical in nature, it analyzes annual reports and interviews with the higher management of ZCC and religious councils. The paper focuses on data between the year 1991 to 2014/15. This paper finds that the Malaysian experience with managing zakat advanced technically in both distribution and collection. However, the practice of ‘distribution’ ought to be more sustainable, less consumption-based. Furthermore, the paper strongly identifies the need for establishing a database on needy people with the national welfare system and other relief NGO’s to reduce double spending.