Spotlight on the infaq sector

Citation

Haniffa, R. and Hudaib, M. (2012), "Spotlight on the infaq sector", Journal of Islamic Accounting and Business Research, Vol. 3 No. 1. https://doi.org/10.1108/jiabr.2012.43103aaa.001

Spotlight on the infaq sector

Article Type: Editorial From: Journal of Islamic Accounting and Business Research, Volume 3, Issue 1

Introduction

The year 2011 ended with a gloom in most developed economies in the West. Those in the lower social stratum have started to feel the pinch from the cut in public spending. Similarly, the financial crisis and uncertainties with the value of currency is slowly having a trickledown effect on other developing countries. And for countries largely dependent on western foreign aid, the flow of funds may not be as plentiful as before. In the Middle East, the continuing revolution against dictatorship regimes will continue to have economic implications on those societies. In short, there will be a substantial increase in people needing financial and welfare support and the role of the infaq sector (third sector) will become very important in these trying times and hence, the reason for focusing on this sector in this editorial.

The nature and importance of infaq

Infaq comes from the Arabic root word “nafaqah” which means to spend money for maintenance. It appears 60 times in the Quran while zakah[1] (religious tax) and sadaqah, two other words closely related to it, are mentioned 30 and 15 times in the Quran, respectively. Zakat al-maal is an obligatory form of spending based on a fixed proportion of wealth (2.5 percent on productive assets and 5 percent on agricultural produce) to eight groups as mentioned in the Quran: the poor, the needy, debtors, to free slaves, the wayfarers, the zakah collector, to reconcile the heart and in the cause of Allah (see 9:60). The expenditure by the infaq institution on these eight groups can thus be classified as follows: for socio-economic and income redistributive purposes (benefits distributed to the poor, the needy and debtors), for administrative purposes (cover costs of running the zakah institution), for political purposes (expenses related to freeing political prisoners and resolving disputes in society through compensation) and for general welfare (expenses for the travellers and activities in the cause of Allah).

While zakah spending is restricted to the eight groups, awqaf (endowments/trusts), sadaqat (charities/donations), qurudh hassanah (benevolence loans), u’tiyat (handouts) and it’aam (food provisions)[2] can cover beneficiaries beyond the eight groups and are all voluntary in nature with no proportionate fixed amount being stipulated. However, the Quran provided a guideline on this:

And they ask you what they ought to spend. Say: “That which is beyond your needs.” Thus, Allah makes clear to you His Laws in order that you may give thought (2: 219).

Hence, any assets held beyond one’s needs belong to Allah and must be spent in His course. Since the amount for voluntary infaq is not established, the act should continue in time of prosperity and adversity according to one’s capability as stated in the Quran:

Let the rich man spend according to his means, and the man whose resources are restricted, let him spend according to what Allah has given him. Allah puts no burden on any person beyond what He has given him. Allah will grant after hardship, ease (65:7).

Infaq does not establish any quid pro quo relation between the mu’ti (donor) and the mustahiq (recipient)[3]. Any implicit or explicit expectations and/or reminders of the charitable act will nullify the religious merit in its totality. The Quran states:

O you who believe! Do not render in vain your Sadaqah (charity) by reminders of your generosity or by injury, like him who spends his wealth to be seen of men, and he does not believe in Allah, nor in the Last Day. His likeness is the likeness of a smooth rock on which is a little dust; on it falls heavy rain which leaves it bare. They are not able to do anything with what they have earned. And Allah does not guide the disbelieving people (2:264).

The rewards from infaq are not just in the hereafter but also in this world and the quantity[4] and the nature of the returns are stated clearly in the Quran. Various verses stated the different quantities of rewards that can be expected: “And whatever you spend in good, it will be repaid to you in full, and you shall not be wronged” (2:272); “this return is increased to twice the amount spent to his credit (in repaying)” (57:11); “He may multiply it to him many times” (2:245) and “is as the likeness of a grain (of corn); it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He pleases” (2:261). In terms of the nature of the returns, the Quran stated among others: will get generous rizk (provision) (8:4), best place in paradise (13:22-23), saves from painful torment (61:10-11), protect from fear and grieve (2:262) and succeed in protecting self from own covetousness (Nafs) (64:16).

Status quo of the infaq sector

As mentioned in the previous section, the practice of infaq is not only rewarding for individuals but more importantly, will have significant economic implications for the vulnerable and deprived sections of the society. Unfortunately, despite infaq being a command from Allah, the amount of collection in most Muslim countries is below expectations. This may be attributed to a number of reasons. First, there is a lax attitude among individual Muslims and groups in the society in fulfilling their religious and prosocial responsibilities either due to ignorance or defiance. This needs to be addressed via spiritual awareness on the importance of the role of infaq in contributing to the socioeconomic justice. Second, there is a lack of reinforcement by the infaq institutions in reminding the muzakun (zakah payers) and mu’tin (donors) of their obligations and this requires the institution to play a more pro-active role. Third, there is a failure on the part of the political parties in embracing the infaq institutions in their manifestos. Fourth, there is an inefficient and ineffective management and governance of the existing institutions and this can be addressed by better operational cost control and integrations of activities. We recognise that these factors cannot be generalised and hence, more research of the infaq sector need to be conducted in different countries to understand factors that contribute to and/or impede its success. Once we understand this, it will help in drawing a master plan and channelling a concerted effort towards building an infaq sector as envisioned in the Quran for a just society.

Notes

1. There are two types of zakah; zakah of wealth (zakat al-maal) and zakah of body (zakat al-fitir). Both are classified as religious absolute personal obligation of infaq.2. Waqf is a continuous form of infaq as the revenues from the activities will be spent to benefit the target recipients while other forms may be a one-off nafaqah, i.e. non-continuous spending.3. In the case of zakah, between the muzaki (zakah payer) and mustahiq (rightful recipient as zakah are meant for eight groups of recipients as stated in the Quran).4. Muslims believe that according to the Quran, whatever amount of nafaqh paid out will be returned in similar amount or in multiples.

Roszaini Haniffa, Mohammad Hudaib