Q723 :I plan to establish a trust out of zakah and
charity (i.e. sadaqah) money and invest such funds in some profitable
business. My plan is to distribute the annual earnings of the business
to deserving students on merit. How far is this acceptable, taking in
view that this will serve the netmunity for a longer period?
A723 : The idea of setting up a trust fund and
investing the proceeds to ensure annual returns which can be given to
the poor is a very sound one. However, zakah money cannot be used for
such a purpose. The reason is that zakah money must be paid to its
beneficiaries when it is due. Once you set aside your zakah liability,
it no longer belongs to you. How, then, do you allow yourself to
dispense with it in a way which you determine? This money belongs to
Allah and He has given you instructions on how to distribute it. It
must be distributed straight away. Moreover, its beneficiaries must be
put in possession of it. When you put it in a trust fund, you are
taking it away from its beneficiaries without their consent. May be
they need it for a more immediate use. How can you, or indeed anyone
for that matter, deny them that privilege. Moreover, when you invest
zakah money, you are actually putting it at risk of loss. This is not
acceptable from the Islamic point of view. It may be true that the
likelihood of loss is very slim indeed. But as long as there is a risk,
then no human being can claim the authority to expose zakah money to
such a risk. You may, however, put the voluntary donations for
charitable purposes into such fund and invest that money, provided that
the investment is a very low risk one. You may consider in this respect
buying some property and letting it out. This is indeed a very low-risk
investment. Moreover, the returns are sure. If you opt for such an
action, the charitable donation you make will earn you more reward as
long as it is in operation.
Our Dialogue ( Source : Arab News – Jeddah )