Is Zakat Foundation for Real?
No marketing and administration costs for some Zakat when they do plenty of both.
This past January, Zakat Foundation of America (ZFA) placed an article through a PR Agency (sometimes known as an advertorial) in LA Weekly Magazine to promote ZFA’s orphan sponsorship program. In it, Amna Mirza, the Chief Marketing Officer of ZFA, pointed out 100% of the money donated to the orphan program goes to that program, and nothing for marketing and administration.
There are a couple of things question-begging about this: Why did ZFA get a PR firm to place an advertorial in the LA Weekly? How does an organization that takes no administration or overhead charges for the program it is promoting sustain itself, apparently in style?
Unfortunately, I don’t have an answer for the first question. The second question is perhaps the more interesting one. For one thing, nonprofit workers will scoff at the notion that it is possible to run a charity while taking no overhead or administration. Donors will sometimes be a tad suspicious of claims like this since they know rent and salaries (and advertorials in LA Weekly) need to be paid somehow.
ZFA has expenses of course. It costs money to run the kind of organization they have.
Zakat Foundation’s Position on Zakat Overhead and Expenses
ZFA does not have a stand-alone Zakat policy the describes how they spend Zakat funds. They also don’t have any separate Zakat accounting. This is unexceptional among American Muslim organizations. So, from ZFA we just get a form 990 that shows a nonprofit with income and expenses but won’t get to the heart of restricted Zakat funds. Zakat is what I care about in this series. ZFA has written information that may be useful to donors and can be a stand-in for a partial Zakat policy. From my discussion with Zakat Foundation’s representative, they are presently working on more materials on Zakat, which should hopefully clarify things further, and I would like to revisit their polices and accounting.
Instead of a stand-alone Zakat policy, Zakat Foundation has a booklet on Zakat. In addition, they have a “common questions” section of their website Like other Muslim charities, information on Zakat is largely restricted to calculation. However, there is enough in the materials provided that indicates Zakat Foundation, as an institution takes Zakat and its role as a “wakil” for donors seriously. The booklet makes distinctions between restricted and unrestricted Zakat.
The “common questions” section of the website, one question about how much donation goes to the program states 100% of the Emergency Relief and Orphan Care programs go to the designated campaign. If they get more than what they need for the crisis, the money will be redirected to where it is needed most.
In another answer, it also adds “seasonal Islamic giving programs” to things that no administrative costs are charged. Then it adds “Administrative costs are taken out of Zakat funds according to the guidance of the Quran and Sunnah.” This is vague, and should satisfy nobody.
Helpfully though, ZFA also states donors can designate their Zakat be used only for the program they designated. So, donors can restrict how Zakat is used.
Unlike say, Islamic Relief USA, which I wrote about recently, ZFA does not hold itself to an (extremely unrealistic) 12.5% cap on administrative expenses and are purposefully vague about what the limits are to its expenses. If you donate unrestricted Zakat or for Sadaqa, the amount of administrative expenses for your donation dollar will probably be high. That is what pays for administrative salaries, sponsorships and other things nonprofits like to expense. For restricted Zakat (except for the more flexible emergency fund), your donations won’t pay for administrative expenses based on their stated policy.
Some Possible Concerns
Overall, Zakat Foundation of America seems like a solid organization focused on delivery of Zakat to those in need, so long as it is not too expensive. It’s a thing many Muslims are looking for. ZFA’s staff were always responsive to my questions.
In discussions about the organization, some have raised the “family run” nature of the organization (disproportionate involvement by members one family is disclosed in their filings, it’s also obvious to the casual observer). I did not find any evidence this is a problem for restricted Zakat donors, though I know it comes up.
What I would like to see from ZFA is a stand-alone Zakat policy that specifies appropriate and inappropriate uses of Zakat that is more concrete than “according to the guidance of the Quran and Sunnah.” The organization should also provide a comprehensive separate accounting for both restricted and unrestricted Zakat funds, as well as expenses attributed to “partner organizations” (that do the aid delivery work in various countries). Separate Zakat accounting is normally not thing American Muslim organizations do. ZFA has an opportunity to be better. A representative of ZFA informed me this is coming.
A final concern is that the donation page is very busy with many options. Donors should be informed on that page what donations are Zakat eligible and restricted, Zakat eligible but flexible and what is not Zakat eligible at all. This last part can be somewhat confusing to some donors.
Consider Zakat Foundation
While the organization has some space to improve and more to disclose, American Muslim donors should consider Zakat Foundation of America’s Zakat options.