Zakat on money donated for charitable purposes
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Fatwa No. ( 5161 )
Q: A - We agreed to secure a sum of one hundred thousand riyals (100,000) in one of the banks, and not to move it in buying and selling,
Rather, it should be ready so that if an accident happens to one of the group members participating in this association, and they incur blood money, God forbid, that blood money is paid from that reserved amount. Is it permissible to reserve that amount without moving it, and is zakah due on it? B - We bought a residential house in the city ofRiyadhfor an amount of one hundred and fifteen thousand riyals (115000), and that house is currently rented out annually for an amount of twelve thousand (12000) riyals. Is zakah due on that house, and what is its amount, knowing that it may sometimes remain without being rented? I ask you to issue a ruling on this. C - We bought lands with the remaining amount inRiyadhand Jeddahfor the future. Is zakah due on these lands or not, and what is the amount? D - We agreed to distribute what we pay out as zakah from these amounts to the orphans, widows, and those in financial difficulty from the members of this same tribe. Is that valid?
A: First: If this amount, or less than it, or more, is collected on the basis of donation such that nothing of it is distributed to the donors in the event that no accidents occur, but rather it is spent on acts of righteousness, then this is permissible. However, depositing it in an interest-based bank is not permissible unless there is a fear of its loss, in which case it is permitted to deposit it without interest, committing the lesser of two harms. What should be done is to invest it in trade or other lawful forms of investment until it is needed for
the purpose for which it was collected, at which point it is liquidated to achieve its intended purpose. There is no zakat due on it if it is collected in the manner described. Second: If the house is bought with part of that amount, there is no zakat on it, nor on its rent; because it has all been set aside for righteousness and assistance, and it is not the property of any of those who donated it, so it is like an endowment. Third: Likewise, there is no zakat on the lands bought with the remaining amount, for the reason mentioned above, that they did not remain the property of those who donated them after they were given. Fourth: What is distributed from this amount or from its earnings to orphans, widows, those in financial difficulty, and the like of acts of righteousness is permissible if the donors agree to it; because it is spent on something other than the purpose for which the amount was collected. This is not considered zakat, but rather is considered from the category of voluntary charity. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: A - We agreed to secure a sum of one hundred thousand riyals (100,000) in one of the banks, and not to move it in buying and selling,
Rather, it should be ready so that if an accident happens to one of the group members participating in this association, and they incur blood money, God forbid, that blood money is paid from that reserved amount. Is it permissible to reserve that amount without moving it, and is zakah due on it? B - We bought a residential house in the city ofRiyadhfor an amount of one hundred and fifteen thousand riyals (115000), and that house is currently rented out annually for an amount of twelve thousand (12000) riyals. Is zakah due on that house, and what is its amount, knowing that it may sometimes remain without being rented? I ask you to issue a ruling on this. C - We bought lands with the remaining amount inRiyadhand Jeddahfor the future. Is zakah due on these lands or not, and what is the amount? D - We agreed to distribute what we pay out as zakah from these amounts to the orphans, widows, and those in financial difficulty from the members of this same tribe. Is that valid?
A: First: If this amount, or less than it, or more, is collected on the basis of donation such that nothing of it is distributed to the donors in the event that no accidents occur, but rather it is spent on acts of righteousness, then this is permissible. However, depositing it in an interest-based bank is not permissible unless there is a fear of its loss, in which case it is permitted to deposit it without interest, committing the lesser of two harms. What should be done is to invest it in trade or other lawful forms of investment until it is needed for
the purpose for which it was collected, at which point it is liquidated to achieve its intended purpose. There is no zakat due on it if it is collected in the manner described. Second: If the house is bought with part of that amount, there is no zakat on it, nor on its rent; because it has all been set aside for righteousness and assistance, and it is not the property of any of those who donated it, so it is like an endowment. Third: Likewise, there is no zakat on the lands bought with the remaining amount, for the reason mentioned above, that they did not remain the property of those who donated them after they were given. Fourth: What is distributed from this amount or from its earnings to orphans, widows, those in financial difficulty, and the like of acts of righteousness is permissible if the donors agree to it; because it is spent on something other than the purpose for which the amount was collected. This is not considered zakat, but rather is considered from the category of voluntary charity. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.