So, is there a list of organizations with zero O.H. that they take care of all the processing expenses of other related entities without them charity work is not possible worldwide. That is real charity work and a desire to help others. I believe.
I would love to see some recent numbers. Unfortunately the most recent 990 is from 2019 and does not show an endowment fund big enough to cover expenses, though you don't have employees, and that may explain it. Is your main function giving grants to overseas organizations?
Is this even possible? I would love to know from others how to create a successful 0 % overhead organization today. Is it even possible for an organization that deals 100% with volunteers and donations (vehicles, computers, residence, utilities, stationary, etc). How successful would such an organization be anyway? I'm worried that this maybe a sign of a scam.
However, local organizations serving their community would be much closer to this ideal than an international organization.
Right now I'm thinking its more realistic to pay some overhead. However, I don't believe its too much to ask organizations to be fully transparent as to how much that amount is, and what it is going towards.
That’s what I meant what you have mentioned in your comment, wish that ideal situation exist and if it does I would like to know. And if doesn’t then what is the point of bringing this up and make donors confuse. As in my believe what I spend on charity all is multiply by 70 times irrespective of percentage of OH. That could be many things including salary of people
Who are implementing on the grounds and putting bread and butter for their family.
Very good insight, thanks for doing the research. I do wonder, however, that maybe we need to look at other metrics in conjunction to get a better context. E.g., a large overhead that resulted in proportional growth, scale and impact may be a good thing.
Good thing for who? For the NGO or transfer of wealth to the zakat eligible? Here I looked exclusively at domestic overhead for international nonprofits that distribute zakat. Metrics on overseas distribution may make sense.
I agree with you but I also think transparency is key, which the vast majority of organizations are severely lacking. We should not have to wade through 990s and audits to try and figure this out.
Organizations should make it very clear what their admin costs and what they are used for, and how it is necessary to support/grow whatever programming they are doing (and not just for growing the organization for its own sake).
They also should have a very clear zakat policy, of course.
In the end, If I donate $10 to zakat, I need to know how much of that will actually go for each of the eligible zakat categories. If I need to add in admin costs, I clearly need to know that, and know how much. We absolutely need to know this to fulfill this pillar of our deen correctly.
I don’t agree with you because of the hadeeth of the prophet alaih assalatu wassalam :
عن أبى حُمَيْد الساعدى رضي الله عنه قال: (استعمل رسول الله صلى الله عليه وسلم رجلا على صدقات بنى سليم يدعى ابن اللُّتْبِيَّة, فلما جاء حاسبه, قال: هذا مالكم, وهذا هدية, فقال رسول الله صلى الله عليه وسلم: فهلَّا جلستَ في بيت أبيك وأمك حتى تأتيك هديتك إن كُنْتَ صادقا؟! ثم خطبنا فحمد الله وأثنى عليه ثم قال: أما بعد فإني أستعمل الرجل منكم على العمل مما ولاني الله, في أتي فيقول: هذا مالكم, وهذا هدية أهديت لي! أفلا جلس في بيت أبيه وأمه حتى تأتيه هديته؟! والله لا يأخذ أحد منكم شيئاً بغير حقه إلا لقِيَ الله يحمله يم القيامة, فلَأعرِفَنَّ أحداً منكم لقي الله يحمل بعيراً له رُغاء (صوت)، أو بقرة لها خُوار, أو شاة تيعر (تصيح), ثم رفع يديه حتى رؤى بياض إبطيه يقول: اللهم هل بلغت) رواه البخاري . وفي رواية مسلم قال عروة: (فقلتُ لأبي حُميدٍ الساعديّ: أسمعتَه من رسول الله صلى الله عليه وسلم؟ فقال: مِن فيه إلى أُذُني. It states that the prophet (PBAH) sent a man called Allutbiah to collect zakat from Abi Sulaim tribe, and when he came back to the prophet he had split what he collected and put one part infront of the prophet and kept the other and said” This for you and this is my Hadiyyah or share.
The prophet told him harshly, would have gotten this had you sat in your father and mothers house.
The prophet stood and said a Khutbah(speech) after praising Allah,
“ I may use some of you for a job, O almighty Allah no one shall take what he is not deserving, if he does he will come the day of judgement carrying it on his back, and I will know someone meeting Allah subhabah with a camel or a cow on his back”
And he lifted up his arms until his under arm can be seen and said
“ Oh Allah did I convey your message” .
Whomever works to collect zakat (Alaamileen alaiha) is one of the 8 people who is zakat eligible, but not to take kings ransome for doing so and not to waste 40 to 50% of zakat on buildings, property, business class trips, and 5 star hotels.
Thanks for bringing awareness about working of Muslim Charities.
Your metric is spot on. One question, did you include in-kind donations in your calculations?
International operations are still opaque. One metric to bring some transparency is to have the Charities report out '$ value' of their services calculated according to the prices in the service locations.
Assessing the effectiveness and quality of the programs is another variable. I hope some kind of third party evaluation mechanism is used for this.
well it depends what you mean by include. If they reported it on their 990 I used the value they provided. I will try to not include transportation costs. However there may be differences in how charities report things and this portrait is by no means perfect
The in-kind donations value is generally reported based on the US IRS guidelines, while their value in the service location is often much lower. This distorts the expense ratio calculations.
In international giving there are a wide range of questions we can ask about sourcing, contracting, sustainability and. efficiency but the lack of any meaningful reporting makes this kind of analysis nearly impossible
I looked at ICNA Relief for this review but did not include them as they don't appear to do any international aid. ICNA has it organized so that ICNA Relief is domestic and Helping Hand is international.
As-salamu alaykum Ahmed. Thank you for the article and recent podcasts. Is there any way for us to contact you, I have the intention of setting up a direct donor to beneficiary zakah system for my organisation and would like your input/suggestions. Please email me at bilal@beginnings.org.uk
Great piece of work. I have been using Ummah Welfare Trust for many years and have only heard good things about them. (They also claim a 100% policy themselves). Would be interesting to hear your views on them.
I did not use google spreadsheets. It's possible after Ramadan I will put them all together and update them, if it's helpful to people. The problem is that this metric is really just makeshift anyway. If nonprofits offered a separate zakat accounting I would probably not do it.
Agree with you that if nonprofits offered a separate zakat accounting it would be beneficial and bring clarity to the matter. However, we don't have them from the orgs and you are referencing numbers based on the publicly available data.
Feel free to review the numbers and draw your own conclusions, I shared the source document in each case. I hope to do a spreadsheet at some point and update the numbers (many are out of date because the IRS has not released 990s). I am working on various other projects but will return to this hopefully by next Ramadan.
I also hope to get more (or some) orgs to release separate zakat accounting so we don’t need to use 990s, except to maybe gain context.
I did review the 2019 990s and want clear how you came to the percentages you mentioned in your article. I'm not sure why it would be difficult to provide the context for the figures so that readers can follow what your are referencing?
The organizations have segregated what is support service expenses (administrative and fundraising) in their IRS Form 990. Ignoring their facts without any discussion with them seem a little odd. Your calculations are so vague and undermines the entities good faith service to the community. Besides, the fact that program expenses are not listed under line item 3 (Grants and other assistance to foreign organizations,...) does not mean they are all domestic or vis a versa. I do appreciate for taking your time to dig in to this matter but overhead costs for nonprofit organization need careful determination than your arbitrary numbers.
I think you are assuming what I did in each case, though I suppose you can figure it out working backwards, and 990s are reported out differently. It would be helpful in the nonprofits themselves provided a separate zakat trenchancy report and accounted for zakat. One of the major problems is a lack of transparency. If the numbers are arbitrary it is because the system for how 990s are filed is arbitrary.
Thank you. Your website does not include any financial information that I can see, or a zakat policy. Do you have these things available for donors and the public?
So, is there a list of organizations with zero O.H. that they take care of all the processing expenses of other related entities without them charity work is not possible worldwide. That is real charity work and a desire to help others. I believe.
Heroic hearts 0% overhead. The workers are all volunteers.
Hchearts.org
One ummah foundation depends only on volunteers and all your donations go towards benefiting the needy
Our chairman's endowment fund even covers the costs of transactions.
This is how such organizations should be run.
38% overhead is a joke. Anyone above 10% should never receive our monies
I would love to see some recent numbers. Unfortunately the most recent 990 is from 2019 and does not show an endowment fund big enough to cover expenses, though you don't have employees, and that may explain it. Is your main function giving grants to overseas organizations?
Is this even possible? I would love to know from others how to create a successful 0 % overhead organization today. Is it even possible for an organization that deals 100% with volunteers and donations (vehicles, computers, residence, utilities, stationary, etc). How successful would such an organization be anyway? I'm worried that this maybe a sign of a scam.
However, local organizations serving their community would be much closer to this ideal than an international organization.
Right now I'm thinking its more realistic to pay some overhead. However, I don't believe its too much to ask organizations to be fully transparent as to how much that amount is, and what it is going towards.
That’s what I meant what you have mentioned in your comment, wish that ideal situation exist and if it does I would like to know. And if doesn’t then what is the point of bringing this up and make donors confuse. As in my believe what I spend on charity all is multiply by 70 times irrespective of percentage of OH. That could be many things including salary of people
Who are implementing on the grounds and putting bread and butter for their family.
Very good insight, thanks for doing the research. I do wonder, however, that maybe we need to look at other metrics in conjunction to get a better context. E.g., a large overhead that resulted in proportional growth, scale and impact may be a good thing.
Good thing for who? For the NGO or transfer of wealth to the zakat eligible? Here I looked exclusively at domestic overhead for international nonprofits that distribute zakat. Metrics on overseas distribution may make sense.
I agree with you but I also think transparency is key, which the vast majority of organizations are severely lacking. We should not have to wade through 990s and audits to try and figure this out.
Organizations should make it very clear what their admin costs and what they are used for, and how it is necessary to support/grow whatever programming they are doing (and not just for growing the organization for its own sake).
They also should have a very clear zakat policy, of course.
In the end, If I donate $10 to zakat, I need to know how much of that will actually go for each of the eligible zakat categories. If I need to add in admin costs, I clearly need to know that, and know how much. We absolutely need to know this to fulfill this pillar of our deen correctly.
I don’t agree with you because of the hadeeth of the prophet alaih assalatu wassalam :
عن أبى حُمَيْد الساعدى رضي الله عنه قال: (استعمل رسول الله صلى الله عليه وسلم رجلا على صدقات بنى سليم يدعى ابن اللُّتْبِيَّة, فلما جاء حاسبه, قال: هذا مالكم, وهذا هدية, فقال رسول الله صلى الله عليه وسلم: فهلَّا جلستَ في بيت أبيك وأمك حتى تأتيك هديتك إن كُنْتَ صادقا؟! ثم خطبنا فحمد الله وأثنى عليه ثم قال: أما بعد فإني أستعمل الرجل منكم على العمل مما ولاني الله, في أتي فيقول: هذا مالكم, وهذا هدية أهديت لي! أفلا جلس في بيت أبيه وأمه حتى تأتيه هديته؟! والله لا يأخذ أحد منكم شيئاً بغير حقه إلا لقِيَ الله يحمله يم القيامة, فلَأعرِفَنَّ أحداً منكم لقي الله يحمل بعيراً له رُغاء (صوت)، أو بقرة لها خُوار, أو شاة تيعر (تصيح), ثم رفع يديه حتى رؤى بياض إبطيه يقول: اللهم هل بلغت) رواه البخاري . وفي رواية مسلم قال عروة: (فقلتُ لأبي حُميدٍ الساعديّ: أسمعتَه من رسول الله صلى الله عليه وسلم؟ فقال: مِن فيه إلى أُذُني. It states that the prophet (PBAH) sent a man called Allutbiah to collect zakat from Abi Sulaim tribe, and when he came back to the prophet he had split what he collected and put one part infront of the prophet and kept the other and said” This for you and this is my Hadiyyah or share.
The prophet told him harshly, would have gotten this had you sat in your father and mothers house.
The prophet stood and said a Khutbah(speech) after praising Allah,
“ I may use some of you for a job, O almighty Allah no one shall take what he is not deserving, if he does he will come the day of judgement carrying it on his back, and I will know someone meeting Allah subhabah with a camel or a cow on his back”
And he lifted up his arms until his under arm can be seen and said
“ Oh Allah did I convey your message” .
Whomever works to collect zakat (Alaamileen alaiha) is one of the 8 people who is zakat eligible, but not to take kings ransome for doing so and not to waste 40 to 50% of zakat on buildings, property, business class trips, and 5 star hotels.
Thanks for bringing awareness about working of Muslim Charities.
Your metric is spot on. One question, did you include in-kind donations in your calculations?
International operations are still opaque. One metric to bring some transparency is to have the Charities report out '$ value' of their services calculated according to the prices in the service locations.
Assessing the effectiveness and quality of the programs is another variable. I hope some kind of third party evaluation mechanism is used for this.
Regards.
well it depends what you mean by include. If they reported it on their 990 I used the value they provided. I will try to not include transportation costs. However there may be differences in how charities report things and this portrait is by no means perfect
The in-kind donations value is generally reported based on the US IRS guidelines, while their value in the service location is often much lower. This distorts the expense ratio calculations.
In international giving there are a wide range of questions we can ask about sourcing, contracting, sustainability and. efficiency but the lack of any meaningful reporting makes this kind of analysis nearly impossible
I would be interested in your analysis of Hidaya Foundation's Zakat efforts. TIA https://www.hidaya.org/publications/all-about-zakat/
This is excellent analysis. 38% overhead is a joke. Anyone above 10% should never receive our monies.
Can you please include OUF (the one ummah foundation) in your list? I can provide/upload any forms you need to do this analysis. Please let us know
Yes, I'd be interested in an analysis of OUF also!
The website has a 2020 990, you have access to a 2021?
I'll find and upload it to the website
Can you include Amoud Foundation in your analysis? I’ve been seeing their ads on Instagram for a while
https://www.amoudfoundation.org/wp-content/uploads/2022/12/2019-990-AMOUD-FOUNDATION-752882187.pdf
And thanks a lot for your effort. I see this a very important step in accountability for Muslim non profits
Had not heard of them. Interesting.
I would be interested in your analysis of ICNA Relief USA. Thank you!
https://icnarelief.org/
I looked at ICNA Relief for this review but did not include them as they don't appear to do any international aid. ICNA has it organized so that ICNA Relief is domestic and Helping Hand is international.
As-salamu alaykum Ahmed. Thank you for the article and recent podcasts. Is there any way for us to contact you, I have the intention of setting up a direct donor to beneficiary zakah system for my organisation and would like your input/suggestions. Please email me at bilal@beginnings.org.uk
Great piece of work. I have been using Ummah Welfare Trust for many years and have only heard good things about them. (They also claim a 100% policy themselves). Would be interesting to hear your views on them.
Could you link your calculations in a Google spreadsheet to review?
I am going through some of the 990s and not fully clear on how you came to the referenced percentages
I did not use google spreadsheets. It's possible after Ramadan I will put them all together and update them, if it's helpful to people. The problem is that this metric is really just makeshift anyway. If nonprofits offered a separate zakat accounting I would probably not do it.
What I'm trying to do is understand the approach you took to calculating the percentages you have referenced in the article.
So I guess a spreadsheet isn't necessarily needed, but some clarity on what you included/excluded in your makeshift metrics would be helpful
Any update on how the calculations were reached?
Agree with you that if nonprofits offered a separate zakat accounting it would be beneficial and bring clarity to the matter. However, we don't have them from the orgs and you are referencing numbers based on the publicly available data.
Feel free to review the numbers and draw your own conclusions, I shared the source document in each case. I hope to do a spreadsheet at some point and update the numbers (many are out of date because the IRS has not released 990s). I am working on various other projects but will return to this hopefully by next Ramadan.
I also hope to get more (or some) orgs to release separate zakat accounting so we don’t need to use 990s, except to maybe gain context.
I did review the 2019 990s and want clear how you came to the percentages you mentioned in your article. I'm not sure why it would be difficult to provide the context for the figures so that readers can follow what your are referencing?
Any one in particular or you want me to explain every single one?
The organizations have segregated what is support service expenses (administrative and fundraising) in their IRS Form 990. Ignoring their facts without any discussion with them seem a little odd. Your calculations are so vague and undermines the entities good faith service to the community. Besides, the fact that program expenses are not listed under line item 3 (Grants and other assistance to foreign organizations,...) does not mean they are all domestic or vis a versa. I do appreciate for taking your time to dig in to this matter but overhead costs for nonprofit organization need careful determination than your arbitrary numbers.
I think you are assuming what I did in each case, though I suppose you can figure it out working backwards, and 990s are reported out differently. It would be helpful in the nonprofits themselves provided a separate zakat trenchancy report and accounted for zakat. One of the major problems is a lack of transparency. If the numbers are arbitrary it is because the system for how 990s are filed is arbitrary.
How about HDF
MLFA ?
I may want to look at HDF. MLFA is not the right kind of charity for this kind of look-see.
Thank you. Your website does not include any financial information that I can see, or a zakat policy. Do you have these things available for donors and the public?