Investing Zakah Money
Quite often we hear of proposals to invest Zakah money into business. The declared objective is to keep the principal safe and spend the profits on those who deserve the Zakah. Thus it should prove, so think those who propose, more beneficial to the poor; at least, in the longer run.
In other words, the idea is to convert Zakah funds into a sort of “waqf property.” The difference being, the invested money does not become an immovable property, but remains, if not invested on buildings, a liquidity; although, admittedly, without any guarantee that it could be turned into liquid cash anytime. On the other hand, if it is invested on landed property, then, obviously, it becomes a virtual waqf property except that it could be retrieved through sale, as against waqf property which can never be sold.
In either case, perhaps there is no need to point to the pathetic treatment of the waqf properties. Either they lie waste, or tenants refuse to pay rents except in date-seed values, or the properties are outright appropriated by powerful people (not always Muslims), politicians, and even governments. That is likely to be the fate of Zakah money if invested in business and converted into landed property.
If it is said that Zakah money could be kept in liquidity and invested in a business managed by an independent, godfearing, able, and efficient body of Muslims, then, we might remind that people of such qualities will have to be brought down from Mars. Those who bear such qualities can be sighted with the help of powerful telescopes alone. If any exist, they are either busy with their own dear personal business ventures or to whom career comes first. And, if found free for community services, they are of such advanced ages whose life expectancy does not match with the projected maturation period of modern-day business.
Further, today there is no business that is safe, except Corporate Business, which runs in billions with global outreach. These are the only ones who perhaps never lose any money. This is because it is they who control the market, regulate it, and even manipulate it. They know where exactly the funds are located, how those funds can be lured out, how they can be made to flow, and what direction and route they will take. They create an environment and then open investment channels leading to specifically targeted businesses. They use the press to create euphoria. Lured small timers chip in their lot. The environment and the euphoria flush out sizable capital, which, after a while starts bringing in returns promised. (It is the Corporate Members who actually use their influence to bring in business, sometimes their own). But, as soon as the market cools, (which it has to, because the heat was artificially created), or they smell trouble (the scheme is designed to collapse after lapse of a certain amount of time), they withdraw their money along with the profits. The business started by them collapses after they quit. This is how many Investment Funds, NRI savings, smaller private banks, and other schemes lose and leave. Their money finds its way into the coffers of the Corporate Businesses. This would be the likely fate of any Zakah money invested into business.
The idea behind investing Zakah money is antithesis of the spirit of Zakah. This is because the reason why Zakah has been instituted is the reason why the suggestions for re-investment comes.
One of the reasons why Zakah has been instituted is for men to get over their love of money. The re-investment idea, whatever its outward goals and objectives, indicate that it is the love of wealth that prompts the people to suggest ways by which Zakah collections could be put to “better” uses.
Removal of poverty is one of the objectives of Zakah, but not all its reason, nor even the primary reason. The main reason is purification of the soul (“tazkiyatu an-nafs“) and infusion of Allah’s love into the hearts. The heart however, as we know, is normally occupied by the love of “this-worldly” things. We need to remove this love before we can enter into a relationship of love and obedience with our Lord. And, of the “this-worldly” things, wealth happens to be the dearest.
Now, it may be asked, how can a meager amount (mere 2.5%) succeed in purifying the hearts? The answer is that these are spiritual matters that we have no understanding of. All we know is that it happens, somehow. The question about this aspect of Zakah is as good as the question about Salah. If it is asked, how can a few minutes of Salah give solace to the soul? the answer is, we do not know. All we know is that it happens. Call it a miracle, if you wish. We see the solace on the faces of Muslims emerging from mosques. We do not notice the same on the faces of those emerging, e.g., from say a bank, or even other places of worship. Non-Muslims too have no difficulty in recognizing this.
Unquestionably, Zakah does purify the souls, which tells us that it is not the amount. It is the act, sincerely performed, with a humble heart, which matters and brings the magic into being.
Another objective of Zakah is purification of the wealth (“tazkiyatu al-maal“). Without its Zakah spent out, the wealth remains impure. Why? Because there are rights of every one, to some degree or the other, in every kind of wealth that is created by the humans. Unless, their right is restored to them, wealth remains questionable and impure for pure souls.
To explain a little, no one can create wealth by himself. He needs the co-operation of several others before he can achieve that. Take the example of an industry owner. He invests some money to set up a workshop and operate it. But he cannot do so without receiving raw materials. Such raw materials were produced somewhere else. Those others who produced the raw materials, depended on those who transported the minerals to them, and those who mined the minerals. Further, everyone in the line would not have been able to work without the farmers growing grains, fruits and vegetables. Those farmers were aided by several other classes of men and women. E.g., they were helped by Agricultural experts who were trained in Universities financed by the government, which depended on taxes paid by the public. Thus, it is a big chain, and everyone in the link offers his or her bit, before someone is able to manufacture something and make money out of it. The money he made, therefore, is a bit tainted unless the rights of others are paid back to them. How much? We do not know. But it has been determined by the Islamic religion that paying out 2.5% of a certain amount of money saved and unused for a whole moon calendar should do.
Yet another objective of Zakah is leveling of the “haves” and “haves not” – and not removal of poverty. Poverty will never go from any society. At best economic leveling can be achieved. In an Islamic system you make the rich poorer, and the poor richer, to some degree or the other. You go on with the process, year after year, until the whole society is leveled up, again to some degree. Some very poor here, and some very rich there, will remain. But by and large, the society will be of those who share the good and bad things of life, all together. Doing business with the Zakah money would actually enrich the rich and weaken the poor.
But the main emphasis of Zakah is not on economic leveling either. In fact, as a sole factor, it will never attain that objective. Laws of inheritance, expiations, and state allowances have to play their own role. The much-desired economic leveling cannot be achieved through economic measures alone, as the unbelieving world thinks. Without moral and ethical reformation of the individuals, neither will there be the sense of guilt nor the reasons for expiation. At the collective level, if a people refuse to implement the laws of Islam, there will never be any benefit from the laws of, say, inheritance.
Finally, without an Islamic state brought into place, there will never be governmental spending on the right type of projects, nor any control over state funds. Those who devour trust properties, find greater justification for devouring state funds. When entrusted with distribution of Zakah funds, they fill their own coffers. Hungry wolves cannot be trusted to establish peace and justice among a flock of sheep. With such individuals, a state which claims itself as an Islamic State is a hoax. There are quite a few hoaxes around.
Thus, the individual, the group and the State, have all to be Islamized before true benefits of the Islamic system are realized, one of which is the economic leveling of the Muslim society. Islam is a complete system, for a complete change.
But the issue is not over if we do not point out that economic leveling is not all that the Islamic system endeavors to bring about. It is the social leveling that is its ultimate goal. A true Muslim society has no social ranks. It cannot be divided into the “haves” and “have-nots,” into the aristocrats and the plebeians, into the bourgeoisies and the labor class, into the white collared ones and the blue collared ones, into the high-tech cadres and the manual workers, into the ruling class and the common public. A Muslim society does not allow any division within its members, save on the basis of two: piety and Islamic knowledge (taqwa wa al-`ilm).
Poverty is the poverty of the soul. Expending, and not ways of augmenting charity funds, removes this poverty.