Firm encourages giving zakah to non-profit organizations hurt by coronavirus pandemic
FALLS CHURCH, Virginia, 5/5/20 — Azzad Asset Management, a socially responsible, faith-based registered investment advisor, announced today that its Muslim clients are expected to donate approximately $6.7 million in zakah-related charity during the holy month of Ramadan. Zakah–sometimes spelled zakat–is an obligation that practicing Muslims pay on assets held for a full lunar year, including investments. Purification dues, which are another category specifically for Islam-compliant investments, are also calculated by Azzad. Both figures are reported to clients on a consolidated zakah and purification statement sent each Ramadan.
This year’s zakah is likely to be given in part to the many non-profit organizations struggling financially in the face of the COVID-19 pandemic. Some mosques, many of which rely on in-person donations to meet a majority of their monthly revenue needs, fear they could be forced end operations entirely as giving dries up due to social distancing and lockdown orders. This Ramadan, Azzad is encouraging its clients to consider donating to mosques and other zakah-eligible non-profit organizations impacted by the coronavirus crisis.
The third pillar of Islam, zakah is assessed on accumulated wealth in order to encourage the free flow of capital and avoid a concentration of resources among the very few. Zakah is not a tax on income, but on wealth and savings in order to help those in need. Many Muslims choose to pay zakah during Ramadan–a month of fasting, prayer, and giving–which began this year on April 24.
Azzad is an advocate of Islamic investing principles, including zakah calculation, and regularly educates the American Muslim community on the topic. The firm’s calculations follow internationally accepted guidelines and are audited annually by a third party accounting firm specializing in Islamic financial transactions.
See: Azzad Asset Management 2020 Zakah Webinar (name and email address required)
Azzad follows best practices and guidelines issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). AAOIFI is a consortium of Muslim scholars who convene to issue guidelines on Islamic investing and other financial matters. AAOIFI Standard Number 35, which outlines specific guidance on zakah, is considered the authority for Islamic financial services firms.