Zakah on charitable organizations

Zakah on charitable organizations Fatwa no. 4460 All praise be to Allah Alone, and peace and blessings be upon His Messenger Muhammad, his family and Companions.The Permanent Committee for Scholarly Research and Ifta' has read the question sent to His Eminence, the Chairman of the Committee from the General Manager of the Saudi Department of Zakah and Income Tax, no. 110 on 25/1/1402 A.H., which states:I want to ask you about the King Faysal Charitable Foundation, which was established by virtue of Royal Decree, no. A/134 on 19/5/1396. The foundation receives donations and gifts, and then invests them either by itself, through other affiliated foundations, or through entering into partnership with other companies, which earn profits for the foundation. (Part No. 9; Page No. 293) I therefore want to ask Your Eminence if the funds of this foundation and its branches, and the funds of other similar charitable foundations, are liable to pay the Zakah that the Department of Zakah and Income Tax is commissioned to collect. I enclose with my letter, a copy of the regulations of the King Faysal Charitable Foundation for you to read and see the activities and purpose of the foundation, and ask you to send us an Islamic opinion regarding this. The committee read the fourth article of the foundation's regulations, which says: "The purpose of the foundation is to receive financial donations from its members and others, and then spend them on educational and scientific activities or different charitable activities that will benefit and improve the welfare of Muslims inside the Kingdom of Saudi Arabia and outside, and increase their standing. In order to achieve this goal, the foundation builds Masjids (mosques), schools, institutes, universities, Islamic centers, and do any work or offer any services that can help Muslims collectively and individually increase their knowledge of the Noble Shari`ah (Islamic Law), understand its teachings and rulings, spread Islamic thought and heritage, and revive the true Islamic culture. The foundation also builds scientific research centers, provides researchers and students of all fields with technical experience, grants, and scholarships, to give Muslims the chance to learn more about all fields of knowledge and different cultures so they can contribute to the current international scientific renaissance. The foundation offers assistance and establishes hospitals, sanatoriums, (Part No. 9; Page No. 294) and different types of treatment, care, and rehabilitation centers, with the aim of generally improving the living, social, and economic standards of Muslims collectively and individually."


The committee's answer is as follows: From what has been mentioned above, the wealth of the foundation does not belong to an individual, in fact it belongs to the charitable institute and is spent on charitable activities in general, such as Da`wah (calling to Islam), building Masjids, and providing for the poor. The committee therefore decides that no Zakah is due on this foundation's funds or any similar funds that are not privately owned and are spent on charity, as these funds are considered as being under the same ruling as Waqf (endowments).May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.


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