Zakat Eligibility – Fund Code Clarification
Zakat eligibility cannot be determined on a lump-sum basis at the fund code level. While certain fund categories may generally include Zakat-eligible activities (for example, food assistance), eligibility ultimately depends on the specific project activities or components funded under that code.
Key Principle
Zakat eligibility must be assessed at the project or activity level, not at the high-level fund category.
Examples
Emergency Relief
Emergency assistance such as food distribution, essential medical care, or direct support to eligible beneficiaries would typically qualify as Zakat eligible.
However, capital-intensive components — such as housing construction, infrastructure rebuilding, or facility development — would not qualify.Education
Covering tuition fees, school supplies, or direct support for eligible students may qualify as Zakat eligible.
Conversely, constructing, renovating, or furnishing school buildings would not be considered Zakat eligible.
Conclusion
It would therefore be inaccurate to designate entire fund codes as fully Zakat eligible without reviewing the underlying activities.
To ensure compliance with:
Our internal Zakat policy
Donor intent and expectations
Shariah compliance standards
Zakat eligibility should be confirmed at the project or budget line-item level.
Good to consider:
Turn this into a formal policy memo
Draft a finance SOP for coding Zakat vs non-Zakat funds
Or create a donor-facing explanation version (simplified language)