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How Zakat collectors turned millionaires? – III

INNLIVE — Sat, 22 Jun 2013 06:23:03 +0000

Hyderabad, June 21: Have you ever observed the lifestyle of adminitrators or heads of firms involved in collection of Zakat and donations?

A few individuals, who were already billionaires, started collecting and distributing Zakat a few years ago, with the sole motto of giving service to the poor Muslims. But there are many who fit well in the rags to the riches story. However, it is not necessary that everyone who is born rich is honest.

With no known sources of income, they live in palatial houses, maintain multiple luxury cars and most of them have sent their children abroad for higher studies. Believe it or not, they earned this lifestyle primarily due to the Zakat and donations that they received from the pious and rich Muslims. Of course, a few religious leaders might have received gifts from their followers. But a majority of them, who never even delivered a religious speech in their lifetime, are maintaining a lifestyle which does not match their known sources of income.

Most of the people have taken advantage of Kaffaf, the percentage of Zakat that the collectors can keep for himself. In most of the institutions, the Kaffaf is about 40 per cent of the actual Zakat amount. They get a similar cut in all the donations that they collect for the Madarsas, other institutions or activities. While this 40 per cent cut could not be questioned if it is permitted by Islam, a few of them have even misappropriated or swindled a major share of remaining 60 per cent of Zakat and donations amounts.

The head of a highly reputed institution purchased several properties in his and his family members name from the Zakat and donations. When informally asked about these transanctions, he said his entire family was dedicated to the institution that they are running and they would sell the properties if the institution needed some finance at any stage.

One of the administrators of an institution had recently invested and lost a huge amount in stock market. Initially, it was believed that he lost his personal money. But further enquiries revealed that the money belonged to the institution and a major component was of Zakat.

Contrary to this misuse, there are several individuals who are honestly distributing the Zakat and donations among real beneficiaries. Infact, many of them have made several sacrifices for the cause of poor students. They sold their own properties and assets to run the institutions for poor students.

Will it not be fair if we ask those collecting and distributing Zakat to declare their personal assets? Of course, they should be adequately paid for the services that they are rendering for the community. By keeping a perfect check on the utilisation of Zakat and donation amounts, it can be ensured that the real beneficiaries get the real benefit.

(TO BE CONTINUED….INN Live has not named any organisation/individual in its story. We do not wish to harm the practice of mass collection of Zakat as it has been benefitting thousands of poor Muslims, specially the students. However, our intention is to weed out the fake organisations/individuals and bring awareness among Zakat payers that their money should reach the real beneficiaries)

Zakat Firms Waste Money Meant For Poor Muslims – II

editor1 — Wed, 19 Jun 2013 21:08:37 +0000

Hyderabad, June 19: The organisations/individuals involved in collection and distribution of Zakat or donations meant for poor Muslims apparently believes in show-off than extending real help to the beneficiaries. They take complete liberty in spending the Zakat and donation amounts as per their will.

For instance, in Ramzan of 2012, the rich and NRI Muslims contributed about Rs 1.27 crore to a prominent organisation towards Iftar food, Fidya and Fitra and Eid clothing for poor Muslims. Shockingly, the organisation has wasted a large amount in logistics and operations.

As per the organisation’s report sent in an e-mail to all donors and potential donors last year, an amount of Rs 1.18 crore was spent on Iftar food, Fidya and Fitra Packs. It is good that these packs were sent to the deserving poor Muslims. However, a huge amount was wasted in procurement, packing, transportation and distribution of the food packs. More than 130 staff members (must be salaried/on daily wages) were involved in the entire exercise.

The material was purchased from four different places and packed in specially designed cartons and transported to the district head-quarters and from there to the distributing points. It is noteworthy that the food material could have been easily purchased and packed in the district head-quarters itself to avoid transportation costs. Instead of saving money, 67 trucks were hired to transport the material. A huge amount was also spent to get branded cartons/packs to ensure visibility of the organisation’s name both among the donors and beneficiaries.

Further, each and every member who might have consumed Iftari was counted. Besides mentioning that Iftar food packs were distributed among 17,957 families; Fidya packs among 660 families and Fitra packs among 3001 families, the organisation promptly mentioned that the total number of “beneficiaries” were 64,850 people. It means every person who ate even a date or banana was counted among “beneficiaries”.

When asked by INN Live, the organisation did not answer whether it justifies the huge spending on logistics, operations and transportation of these materials.

If we divide Rs 1.18 crore spent on food grains, then each of 64,850 “beneficiaries” got an average of Rs 183. In comparison, the staff members of the organisation, the suppliers, the transport guys and others involved in the operation got more money than the deserving beneficiaries.

Instead of wasting money on manpower, logistics, transportation and the administrative expenses, the organisation could have helped more number of beneficiaries by making direct cash payments asking the beneficiaries to buy food items locally. Direct payment of Rs 1,000 each would have helped 1,118 poor families to buy food for at least 10 days of Ramazan. Since 1,118 is a small number compared to 64,850, the organisation preferred the latter as it sounds impressive.

Contrary to this huge expenditure, a mere Rs 9.35 lakh was spent on Eid clothes distribution. As many as 27 cars were hired to distribute 3,200 sarees with blouse and Eid clothes among 529 girls and 262 boys. Why this distribution was not merged with food distribution? It could have saved a few thousand rupees which belonged to the poor Muslims.

The organisation should be appreciated for maintaining the perfect record of its activities. However, its focus was primarily on highlighting the number of beneficiaries. Since numbers speak louder than words, the organisation used numbers appropriately to receive pat from the donors and well-wishers. These numbers would certainly help the organisation get more contributions this year and therefore, it can hire more number of staff, more number of cars, more number of trucks, more number of branded cartons to distribute food items in more number of villages among more number of “beneficiaries”.

Organisations Turn Zakat Into Multi-Crore Industry – I

editor1 — Tue, 18 Jun 2013 18:40:44 +0000

Hyderabad, June 18: A 14-year-old poor Muslim boy sells head-bands on the busy Charminar road throughout the day. He breaks his fast on road and forced to skip his Taraveeh prayers as he had to earn money to buy Sehri for his poor family members waiting at home.

The boy is among hundreds of other poor Muslims who sweat it out the whole day, even during Ramazan, to earn a day’s meal for their families. However, such eligible boys and men never get the benefit of crores of rupees being collected towards Zakat by various organisations.

While the entire Muslim world is preparing to welcome the holy month of Ramzan, several fake and real organisations are gearing up to collect crores of rupees from the rich Muslims towards Zakat.

A few institutions are certainly doing a great service by delivering the Zakat amount to the real beneficiaries. But a majority of institutions are indulging in large scale fraud. Most of them are backed with Fatwas to keep about 40 per cent of total collection as Kaffaf for themselves. However, many organisations have devised innovative means to swindle a major part of the remaining 60 per cent Zakat amount meant for beneficiaries.

According to rough estimates, the rich Hyderabadi Muslims, especially the NRIs, have been paying over Rs 500 crore Zakat every year for the last eight years. Although the Zakat amount till 2005 was confined to about Rs 100 crore per year, it increased manifold in the later years due to the increase in the number of rich Muslims and their assets in the last eight years. This was primarily attributed to real estate boom and strengthening of economy. This year, the Zakat amount is likely to touch Rs 1,000 crore.

Although the rich Muslims strictly followed the religious obligation and promptly paid Zakat every year, some organisations and individuals converted this religious practice into a full fledged business and multi-crore industry. Some of the Zakat organisations have corporate structure, impressive offices and huge staff – all aimed at attracting the rich Muslim NRIs. Some of them have spent lakhs of rupees on their websites, brochures, corporate films and other literature.

Many institutions are armed with a long list of achievements. Their claims suggest that the Muslim community would have been completely illiterate and destitute without them. However, a simple analysis of their claims clearly shows they are just playing with the numbers to impress the innocent rich and NRI Muslims.

For instance, a prominent institution has claimed in its corporate brochure that they have spent a few crores on over 40 lakh beneficiaries. A simple division of amount mentioned against the number of beneficiaries reveals that each beneficiary got mere Rs 1100 – 1400 in the last one-and-a-half decade. What good this amount would have done in the lives of beneficiaries may be easily judged.

The organisations doing real service are not afraid of sharing their details in public domain. However, several reputed organisations not only avoided tough questions, but requested that they would answer them after the month of Holy Ramzan. The questions asked by INN Live to such organisations were quite generic. For instance, a prominent organisation collecting Zakat for over a decade was asked to give details of how much it spends on publicity, newspaper advertisements, printing of brochures, production of corporate films, etc., Further, they were asked whether they got any clearance from the religious heads on whether Zakat amount could be spent on publicity?

At least three leading institutions in Hyderabad simply skipped the question and they said they publish advertisements in newspapers at discounted rates. But the question whether they were entitled to spend Zakat amount on newspaper advertisements remained unanswered.

In another shocking instance, one organisation has spent Rs 25 lakh for giving publicity to a government-run scheme and took entire credit for its success. Imagine how many families would have got directly benefitted from Rs 25 lakh that was spent on publicity.

While the intentions of some of the organisation may be right, but the way they are spending the Zakat amount is highly questionable. Such institutions are primarily being run by a few respectable families whose credibility and dedication towards the cause was never doubted or questioned. But unfortunately, they have built an impression that they are not prone to mistakes and scrutiny.