Is it permissible to invest charity funds through an agency appointed by the donor in projects that are subject to profit or loss?
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The questioner : ...
The Shaykh : Yes.
The questioner : May Allah reward you with good. Is it permissible to invest charity funds through an agency appointed by the donor in investment projects that may be exposed to profit and loss, or are actually exposed to profit and loss, such as buying, for example, a farm to be endowed as a waqf for students of knowledge as a school?
The Shaykh : No, your question has two branches: one regarding a waqf and the other regarding a charity. A waqf is a different matter; we say it is permissible. As for monetary charity, this money is used to buy trade goods, and as you said, it may profit or it may lose. I do not see this as acceptable, except under a condition that is heavy for donors: if the trade profits, the profit belongs to the poor; and if it loses, the loss is borne by the wealthy as a misfortune, and they compensate for the loss, for that is their hereafter reward.
The questioner : The agency, the Islamic Society, is the one that must be the guarantor for this invested money.
The Shaykh : The Society? The money comes from it, and from whom?
The questioner : No, a man donates based on a publication he read. This publication states that the ongoing charity project is, for example, a mill or a farm, and the revenue from these projects is a waqf for the poor and the needy. This means he knows that we will take this money, from the charity funds, and put it into charitable projects.
The Shaykh : He does not know; he proposes. Or are you the ones proposing?
The questioner : No, he delegates to us.
The Shaykh : So, are you the ones proposing?
The questioner : We propose to him, and he agrees to our proposal.
The Shaykh : Yes, exactly.
The questioner : So we buy, for example, a sewing machine and give it to a poor woman, or we buy a rice farm and plant it...
The Shaykh : You are still in the realm of voluntary charity, are you not?
The questioner: Yes.
The Shaykh : If he has delegated to you to do so, and you buy with this money a sewing machine or something similar where the benefit to the recipient of the charity is guaranteed, then there is nothing wrong with that. But in my view, the matter is not the same for what is not guaranteed.
The questioner : ...
The Shaykh : Be patient.
The questioner : I mean, if we set up a blacksmith shop, expecting that this shop will profit and succeed, but Allah decrees that it loses, are we obligated to be guarantors in our capacity as agents for the donor?
The Shaykh : But where would you guarantee from if you guaranteed?
The questioner : We do not guarantee.
The Shaykh : If you wanted to guarantee, where would you guarantee from? You are not able to.
The questioner : No, of course, except from our personal funds in our personal capacity.
The questioner : ...
The Shaykh : You need to be patient with me, please, please, be patient, and nothing makes you patient except Allah. In this case, since you are the ones proposing, and not the donor, you must guarantee the loss. Otherwise, do not propose such a project unless the donor agrees to guarantee the loss. Because the purpose of that is that the charity goes to its rightful people. But in the case of a loss, the charity did not go to its rightful people, so who is the guarantor here? The guarantor must be one of two people: either the proposer, which is not feasible, or the donor, which I think is also not feasible, as it is like the previous case, because he donates and appoints an agent for it. I see that these charities should be spent on realized benefits, and not in trade that is exposed to risk. Yes, go ahead. What brought you here? You came for the sport of that type of sport... - laughs - .
The Shaykh : Yes.
The questioner : May Allah reward you with good. Is it permissible to invest charity funds through an agency appointed by the donor in investment projects that may be exposed to profit and loss, or are actually exposed to profit and loss, such as buying, for example, a farm to be endowed as a waqf for students of knowledge as a school?
The Shaykh : No, your question has two branches: one regarding a waqf and the other regarding a charity. A waqf is a different matter; we say it is permissible. As for monetary charity, this money is used to buy trade goods, and as you said, it may profit or it may lose. I do not see this as acceptable, except under a condition that is heavy for donors: if the trade profits, the profit belongs to the poor; and if it loses, the loss is borne by the wealthy as a misfortune, and they compensate for the loss, for that is their hereafter reward.
The questioner : The agency, the Islamic Society, is the one that must be the guarantor for this invested money.
The Shaykh : The Society? The money comes from it, and from whom?
The questioner : No, a man donates based on a publication he read. This publication states that the ongoing charity project is, for example, a mill or a farm, and the revenue from these projects is a waqf for the poor and the needy. This means he knows that we will take this money, from the charity funds, and put it into charitable projects.
The Shaykh : He does not know; he proposes. Or are you the ones proposing?
The questioner : No, he delegates to us.
The Shaykh : So, are you the ones proposing?
The questioner : We propose to him, and he agrees to our proposal.
The Shaykh : Yes, exactly.
The questioner : So we buy, for example, a sewing machine and give it to a poor woman, or we buy a rice farm and plant it...
The Shaykh : You are still in the realm of voluntary charity, are you not?
The questioner: Yes.
The Shaykh : If he has delegated to you to do so, and you buy with this money a sewing machine or something similar where the benefit to the recipient of the charity is guaranteed, then there is nothing wrong with that. But in my view, the matter is not the same for what is not guaranteed.
The questioner : ...
The Shaykh : Be patient.
The questioner : I mean, if we set up a blacksmith shop, expecting that this shop will profit and succeed, but Allah decrees that it loses, are we obligated to be guarantors in our capacity as agents for the donor?
The Shaykh : But where would you guarantee from if you guaranteed?
The questioner : We do not guarantee.
The Shaykh : If you wanted to guarantee, where would you guarantee from? You are not able to.
The questioner : No, of course, except from our personal funds in our personal capacity.
The questioner : ...
The Shaykh : You need to be patient with me, please, please, be patient, and nothing makes you patient except Allah. In this case, since you are the ones proposing, and not the donor, you must guarantee the loss. Otherwise, do not propose such a project unless the donor agrees to guarantee the loss. Because the purpose of that is that the charity goes to its rightful people. But in the case of a loss, the charity did not go to its rightful people, so who is the guarantor here? The guarantor must be one of two people: either the proposer, which is not feasible, or the donor, which I think is also not feasible, as it is like the previous case, because he donates and appoints an agent for it. I see that these charities should be spent on realized benefits, and not in trade that is exposed to risk. Yes, go ahead. What brought you here? You came for the sport of that type of sport... - laughs - .
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.