Sharif Aly is out as CEO of IRUSA. Why his leadership has been a trainwreck for Muslim charitable giving.
Strictly by the numbers.
Yesterday, Sharif Aly announced he is leaving as CEO of Islamic Relief USA (IRUSA). For Muslim donors, it is helpful to understand, by the numbers, how much of a disaster his tenure was and how damaging it has been for zakat and charitable giving among Muslims in the United States.
Sharif Aly was appointed CEO of IRUSA in April of 2017, replacing current IRUSA President Anwar Khan. I will compare the 2017 Form 990 (the tax form organizations like IRUSA are required to file) with the 2021 Form 990, the last year for which the form is available.
Unlike other comparisons with 990 I have done before, IRUSA has consistently formatted its reporting despite using different preparers. Since it is the same organization with the same leadership through that time, it’s the closest thing we can get to an apples-to-apples comparison.
Gross Revenue went from $145,802,704 (2017) to 136,479,616 (2021) - a decrease of 6%
This is a top-line number that I don’t think any donors should worry about on its own. It is here to provide context for what is to follow. The more important numbers have to do with the charitable benefits provided by the organization. That is where the disaster happened.
Grants and assistance went from $126,306,700 (2017) to $41,816,010 (2021) - a decrease of 66.9%
This is a number I get from Part IX, the grants and assistance in the first three lines in both 990s. For 2021, I deducted a grant reported for $ 2,151,797 to the IRUSA Waqf. That tends to go to IRUSA’s investments and has no more charitable purpose than other funds IRUSA retains.
IRUSA is understood to be a fundraising office, albeit an independent one, for Islamic Relief Worldwide. Unfortunately, under the leadership of Aly, it has become more of a self-licking ice cream cone. It is far more overhead-heavy, and it’s unclear how this level of bloat is justified.
As I wrote about previously, IRUSA proudly published a zakat policy that primarily served to justify this bloat.
Grants and assistance as a percentage of gross receipts went from 86.61% (2017) to 30.65 % (2021)
I calculated a percentage different from what I have done for other nonprofits since this may be more of an accurate reflection since so much of IRUSA’s revenue is not for charitable use, even if it’s not overhead per se. The money may sit there. I take the number I described above (grants and assistance, less assistance to itself) and state it as a percentage of total gross revenue for the year, which I also stated above. So this reflects charitable benefits versus how much the organization took in for that year.
While there are reasons why this number may fluctuate some (revenue from the prior year is one), this is too dramatic a difference to ignore.
Google Advertising went from $960,416 (2017) to $3,575,631 (2021), up $272.3%
Some have approached me to make the claim that Google advertising generates 10X what you spend there (or some other number seemingly pulled out of the air), so I should stop complaining about it. Maybe. But we are seeing a decrease in revenue and a dramatic decrease in charitable benefits to humanity. There was no Facebook advertising in 2017. It’s a seven-figure outlay now.
I have never seen any Islamic scholars explain how Google or Facebook are legitimate Zakat beneficiaries. Even if it were possible to conjure one up, explaining how this spending provides a charitable benefit would be hard.
Islamic Relief has a real opportunity here.
I want to see a strong and successful Islamic Relief USA and wish the organization well in its search for a new CEO. The organization’s board plainly dropped the ball with this particular CEO, and it’s too bad they allowed him to continue as long as he did. More than the CEO, there was a systemic failure within the organization (including the board) in allowing a culture of overspending and underdelivering. Here is what I would suggest if anyone at that organization cares:
Take Zakat seriously. This means they should ditch their current zakat policy that provides no restrictions on overhead. Any policy should be credible and include independent outside auditing, transparency, and accountability. IRUSA should include an option for cash distribution of zakat and not be too wedded to the notion that they must spend everything on “development.”
Abandon the “overhead myth” nonsense. IRUSA did a poorly advised (and since thankfully deleted) rebuttal of my article on their extravagant overhead, appearing to claim that overhead should be abundant and that people are backward for thinking this is a problem. As we can see in IRUSA’s example, their addiction to copious amounts of overhead means a dramatic decrease in charitable benefits. IRUSA’s numbers demonstrate this. No, you are not wrong for being concerned that too much of your donation is being spent on overhead or not being spent at all.
Increase transparency through the giving chain. The federal 990 has some serious limitations in international giving. We don’t know how the money was spent once granted. Given that so much is spent on “development,”- which has serious documented corruption problems, IRUSA should be transparent about its policies regarding aid, vendors, and suppliers, as well as independent auditing so we know more about how donations are spent beyond pretty youtube videos.
Jazakallah khair for doing this invaluable work and making it known.
I'm in the process of estate planning, and guess which organization I had defaulted to when it came to bequests. That's changed, and I'm far happier with the small but mighty beneficiaries I've named today, Mash Allah.
I once had a shaykh whom I really trusted with my zakat. He would make sure it went to those in need and he kept nothing for himself. Since he died, I've not found an organization nearly as trustworthy. I've looked for those with low overhead and great reputations for giving to good causes.