Does our charity legally need a scholar-approved Zakat policy?

There is typically no regulatory requirement for a scholar-approved policy. The requirement comes from your donors. Muslim donors and the scholars they consult will not direct Zakat to a charity without one, so the policy is a fundraising prerequisite even though it is not a legal one.

Can we accept Zakat if we don't have segregated fund accounting yet?

We would not market a Zakat campaign until segregation is in place. Without a separate fund you cannot show donors where their Zakat went, and your scholar may not approve the policy. Set up restricted fund accounting before you launch, and ask your scholar how to treat any Zakat already received.

How long does it take to get scholar approval on a Zakat policy?

In our experience, allow at least two months from first outreach to a reviewed policy. Scholars are heavily booked in the weeks before Ramadan, so the calendar tightens quickly after Sha'ban begins. If you are inside a month, position this year's campaign as Sadaqah and start the scholar process for next Ramadan immediately.

Is Zakat al-Fitr handled the same way as general Zakat?

No. Zakat al-Fitr is a fixed per-person obligation that must be paid before the Eid prayer ([Sahih al-Bukhari 1503](https://sunnah.com/bukhari:1503)). It needs its own collection workflow, a hard cutoff time, and a fast disbursement partner. The checklist treats it as a separate category for this reason.

What's the most common mistake charities make on Zakat compliance?

Marketing a general campaign as Zakat-eligible when only part of the programme actually qualifies under the eight asnaf. Donors who find out lose trust, and word travels quickly in close-knit communities. The cause-eligibility map in category 2 of the checklist exists to prevent this.

Where do I get the checklist?

Visit the Islamic Philanthropy Audit page on sarahaliphilanthropy.com and submit the request form. The PDF arrives immediately and there is no sales follow-up unless you ask for one.

Zakat Accreditation Checklist for Charities

Zakat readiness means a donor can see exactly how their Zakat is held, who qualifies to receive it, and how quickly it is distributed. Publish an eligibility policy reviewed by a qualified scholar, segregate Zakat funds, report distribution annually, and make all of it visible on the donation page before Ramadan traffic arrives.

Ramadan is the peak giving season for Muslim donors. The Lilly Family School of Philanthropy's Muslim American Giving Report: Motivations of Giving (2023) describes Ramadan as the month "when the majority of Muslims offer their obligatory (Zakat) and optional (Sadaqa, Khairat, etc.) charities". And recommends that nonprofits plan targeted campaigns for it.

That concentration raises the stakes for one donor question: can this organisation show that it handles Zakat correctly? Answering it is mostly a documentation task. Prepare these seven categories of evidence before the first ten nights, with qualified scholarly review of your policy. Without them, careful donors may give their Zakat elsewhere and offer you Sadaqah, or nothing.

We built the Zakat Accreditation Documentation Checklist to organise that evidence on one page. This article explains each category and the sources behind it. It is a preparation tool, not an accreditation, and your policy still needs review by a qualified scholar.

Why Zakat compliance is a fundraising problem, not just a fiqh problem

Zakat is one of the pillars of Islam: an obligatory payment on qualifying wealth held above nisab, the minimum wealth threshold.

Surah At-Tawbah verse 60 names the eight categories of recipients (the asnaf): the poor, the needy, those who administer Zakat, those whose hearts are to be reconciled, those in bondage, those in debt, those in the cause of Allah. And the traveller (quran 9:60, quran.com).

For institutions, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) publishes Shari'ah Standard No. 35 on Zakah among its issued standards.

Large Zakat collectors explain their own practice publicly, and donors compare charities against them. Islamic Relief Worldwide tells donors that it spends Zakat on the poor and needy, that as an administrator of Zakat it takes a proportion to cover the cost of distributing aid. And that zakat today is often given to three of the eight categories.

That is the level of clarity a donor will expect from you.

In our experience, donors and the scholars they consult look for three things:

A written Zakat policy reviewed by a named scholar or fatwa council.

Evidence that Zakat is held and tracked separately from general funds.

Records showing that Zakat reached eligible recipients only.

Operational compliance also protects donor retention. We explain how this fits into broader cultivation in How to Build a Donor Journey That Converts.

The seven documentation categories

In practice

Sequence · 4 steps

Keep evidence ready for review

Select a step to trace the sequence

Use this diagram with the Your Zakat Ready Checklist (checklist).

1. Scholar-approved Zakat policy

A short policy should name the scholar or fatwa council that oversees your Zakat handling and state which school of thought the policy follows. It should answer the questions donors ask most, such as whether any share of Zakat covers administration costs, and on what basis.

Yaqeen Institute's qualitative study of Zakat work in Canada, based on interviews at four Canadian organisations, shows how much these practical decisions vary between collectors. Write yours down so donors do not have to guess.

2. Cause-eligibility map

Not every programme is Zakat-eligible, and scholars differ on some uses, such as building projects. Yusuf al-Qaradawi's Fiqh al-Zakah remains a widely used reference on these questions, but your scholar should rule on your programmes. Map each active programme against the eight asnaf and mark it Zakat-eligible, Sadaqah-only or needing a ruling. Our checklist includes a template for this.

3. Segregated fund accounts

Track Zakat in its own restricted fund so that every amount received can be followed to a recipient. This is what donors and scholars expect, and it fits the restricted fund rules your accountant already applies.

In the UK, the Charities SORP sets out how charities account for funds, and SORP 2026 applies to accounting periods starting on or after 1 January 2026. Confirm the treatment for your country with your accountant, then set up a dedicated fund class in your accounting software.

4. Recipient verification process

For the poor and the needy, record how you assess eligibility. The nisab threshold is based on the value of gold or silver and moves with metal prices, so use a current figure. The National Zakat Foundation calculator and Islamic Relief UK calculator apply current values, and the LBMA publishes the benchmark gold and silver prices.

Keep the date and value you used with each assessment.

5. Disbursement records and reporting

Many scholars expect Zakat to be distributed promptly, and your policy should set a clear distribution window. Report what you received and distributed by recipient category, at least once a year. Donors who can see where last year's Zakat went are more likely to trust you with this year's.

6. Regulatory compliance overlay

Charity law and fiqh overlap at several points:

Zakat al-Fitr. It is due per person and must be paid before the Eid prayer (Sahih al-Bukhari 1503), so it needs its own workflow with a hard cutoff.

Overseas distribution. Canadian charities working abroad must meet the "own activities" rules in CRA Guidance CG-002, Or the grant rules introduced by the 2022 Income Tax Act amendments and explained in CRA Guidance CG-032. UK charities should follow the Charity Commission's Compliance Toolkit chapter 1: Charities and terrorism. US grantmakers working with foreign organisations can use IRS Revenue Procedure 92-94.

Annual reporting. Canadian charities report through the T3010 return. Make sure the restricted Zakat fund is reported consistently with your accounts.

Partners. Use written agreements and monitoring for any partner that distributes Zakat on your behalf.

7. Donor-facing collateral

Publish the evidence where donors decide: a short policy summary, a calculator or link to one, the eligibility map in plain language and last year's distribution report. Put it on the donation page itself, not only on a separate policy page, and have it live before Ramadan traffic arrives.

A realistic timeline: working backwards from the first ten nights

Timeline

Timeline · 4 milestones

Work backwards from Ramadan

Select a milestone to mark your place

Use this diagram with the Your Zakat Ready Checklist (checklist).

Scholar review is usually the slowest step, and scholars are busiest in the weeks before Ramadan. In our experience it is worth starting at least 90 days ahead. We suggest:

90 days before Ramadan: draft the policy and contact your scholar.

60 days before: finalise the cause-eligibility map and train staff.

30 days before: publish the policy and landing page and test the workflows, including Zakat al-Fitr.

The last ten nights: in our experience the strongest asks belong here, because they include Laylat al-Qadr, described as better than a thousand months (Surah Al-Qadr 97:3, Quran.com).

If you do not have a reviewed policy 60 days out, we recommend running this year's campaign as Sadaqah and preparing properly for next year. Claiming readiness you cannot show puts donor trust at risk.

Where this fits in your broader Islamic philanthropy strategy

Beyond Zakat, long-term growth often lies in Sadaqah Jariyah, ongoing charity, and Waqf, an endowment dedicated to a charitable purpose.

UNDP's work in Indonesia, Including The role of zakat in supporting the Sustainable Development Goals and Unlocking the Potential of Zakat and Other Forms of Islamic Finance to Achieve the SDGs in Indonesia, explores how these funds can support development.

We cover endowments in Islamic Finance and the Modern Waqf and donor upgrades in From ATM to Partner: The Mid-Level Donor Playbook.

Stewardship should also respect donors who prefer to give quietly. The hadith of the seven shaded by Allah includes a person who gives charity so secretly that the left hand does not know what the right hand has given (Sahih al-Bukhari 1423). Offer anonymous giving and report impact without naming donors, as outlined in our Storytelling That Inspires Action framework.

How to get the checklist

The Zakat Accreditation Documentation Checklist is available for free.

Request the checklist: Open the Islamic Philanthropy Audit page and use the request form. You will receive the PDF immediately.

For a comprehensive review, SA Philanthropy conducts Islamic philanthropy audits for charities entering Ramadan. Details are available on our audit page, resources hub, and contact page.

Frequently asked questions

Common Zakat-readiness questions are answered below. For specific inquiries, contact info@sarahaliphilanthropy.com.

Put this into practice

Choose these tasks as a starting assignment for your team. The roles and review timing below are suggested working arrangements, not benchmarks.

1. Assemble a review folder

Suggested owner: Finance lead. Gather the current policy, fund records, recipient documentation and distribution reports. Add the eligibility map and public explanations, marking missing or outdated records rather than treating this checklist as accreditation.

2. Assign qualified review

Suggested owner: Executive lead. Name the appropriate faith and professional reviewers and list the questions each must address. Record unresolved decisions and the operational owner who will maintain the approved process.

3. Compare public claims with approved practice

Suggested owner: Communications lead. Check the donation page and campaign materials against the reviewed policy and actual records. Prepare an assigned correction list and withhold unsupported eligibility or accreditation claims.

Check progress: Before each campaign, review outstanding documentation and approvals with finance and programme leads. Promote only claims the charity can support through its qualified review.

Your homework

Fundraising for Zakat depends on operational alignment across Shari'ah governance, restricted fund accounting, recipient verification and charity reporting. Scholar review takes time, so plan well ahead. If your organisation lacks a reviewed policy and working eligibility records well before the campaign, focus the public appeal on Sadaqah rather than risking donor trust with claims you cannot show.

Before you move on to anything else, complete these three tasks:

1. Compile an internal review folder by Friday containing your existing Shari'ah policy, restricted fund accounting ledgers, recipient verification records, and annual distribution reports.

2. Draft a cause-eligibility map this week that records which active programmes qualify under the eight asnaf and separates Zakat-eligible activities from Sadaqah-only projects.

3. Produce an assigned correction list by next Thursday comparing all public donation pages, campaign assets, and Zakat claims against your verified accounting and governance records.