ZAKAT POLICY

Purpose

This policy sets out how ACF Canada receives, treats, allocates and reports Zakat-eligible contributions so that Muslim donors can confidently fulfil their Zakat obligations through ACF Canada, and so the funds are managed responsibly, transparently and in line with Islamic principles and Canadian charitable law.

Scope

• “Zakat funds” refer to financial contributions made by donors who identify them as Zakat (or intend them to be treated as Zakat) and wish ACF Canada to allocate/disburse them in a manner consistent with Zakat distribution criteria.
• This policy is distinct from general donations (Sadaqah or unrestricted giving) which may be used for ACF Canada’s operating costs, program expansion or general humanitarian relief.
• The policy applies when donors clearly designate their gift as Zakat-eligible (e.g., via checkbox on the donation form, written communication, or confirmed verbally).

Key Definitions

• Zakat: An obligatory act of worship in Islam, requiring eligible Muslims to give a portion of their wealth under certain conditions to defined categories of recipients (e.g., the poor, needy).
• Sadaqah: Voluntary charity. ACF Canada treats general donations not explicitly designated as Zakat under this broader category.
• Zakat-Eligible Recipient: Individuals or families whom ACF Canada determines meet the criteria of need and eligibility consistent with Zakat categories (see “Eligibility” below).

Principles of Use

1. Sacred Trust – Zakat funds are treated as a sacred trust; ACF Canada will allocate them with the intention of fulfilling the donor’s religious obligation and serving the intended categories of need.
2. Recipient Dignity & Autonomy – Wherever feasible, recipients will be offered choice and dignity in how support is provided, rather than top-down handouts.
3. Transparency & Accountability – ACF Canada will track Zakat funds separately, maintain and provide financial reporting for all Zakat funds separate from other ACF Canada activities, and ensure timely deployment of funds.
4. Prioritizing Purpose – Humanitarian Need First – While the donor may originate the funds, the allocation will be based on greatest need as determined by ACF Canada’s humanitarian expertise, rather than donor-specified individual recipients.
5. Compliance with Canadian Law – ACF Canada will ensure disbursement mechanisms comply with Canada Revenue Agency (CRA) rules for charities, maintaining proper documentation, oversight and auditability.

Eligibility & Disbursement

Zakat-Eligible Recipients

Action Against Hunger Canada (ACF Canada) recognizes that Zakat, as defined in the Qur’an (9:60), must be distributed to specific categories of eligible recipients. In alignment with these principles, ACF Canada ensures that Zakat funds are directed exclusively to Muslim individuals and families who meet the established criteria of need and vulnerability.

Eligible Categories

Zakat collected by ACF Canada may be distributed to beneficiaries who fall under the following of the eight recognized categories.

1. The Poor (al-Fuqarā’) – Muslims with no sufficient means to meet basic living needs.
2. The Needy (al-Masākīn) – Muslims whose income does not cover essential expenses.
3. Administrators of Zakat (al-ʿĀmilīn ʿAlayhā) – In limited circumstances, Zakat funds may be allocated to al-ʿāmilīn ʿalayhā (Qur’an 9:60) for costs directly related to the administration of Zakat, such as eligibility assessment, verification, disbursement, monitoring, and Zakat-specific compliance. Zakat funds may not be used for general organizational overhead, fundraising, marketing, or non-Zakat program costs.

Other categories listed in 9:60 are not applicable to ACF Canada unless specifically reviewed and approved by an Islamic advisory partner.

Distribution Modality

• Zakat funds are distributed through ACF Canada’s implementing partners who maintain local networks capable of verifying faith, need, and eligibility.
• Beneficiaries are verified through documentation or partner attestations confirming both Muslim identity and economic hardship.
• Zakat funds are never mixed with general humanitarian funds and are tracked separately in ACF Canada financial system.

Allocation of Funds

Zakat funds may be used for:

• Emergency relief (food, water, shelter, hygiene kits)
• Short-term cash or voucher assistance (where permitted and feasible) to address urgent needs
• Livelihood support or skills/training that help address conditions of need or poverty trap

Zakat funds will not be used for:

• General operational costs of ACF Canada (unless explicitly allowed under the terms of the gift)
• Grants to individuals specified by the donor (i.e., donor cannot earmark a gift to a named individual)
• Activities inconsistent with Islamic principles for Zakat distribution (for example, luxury support, non-eligible recipients)

ACF Canada aims to spend Zakat funds within one year of receipt; if funds remain unallocated due to timing or other constraints, they will be held in a designated Zakat fund account until deployment.

Donor Direction & Intent

On ACF Canada’s donation platform or form, donors will be offered a checkbox or option: “This gift is intended as Zakat.”

• If the donor designates the gift as Zakat, ACF Canada will treat it under this policy and record donor intent. If no designation is made, the gift will be treated as a general donation (Sadaqah/unrestricted).
• Donors should be advised that once funds are designated and deployed under Zakat policy, ACF Canada cannot redirect them to an individually specified recipient nor guarantee personal recognition of usage.
• ACF Canada will issue a donation receipt consistent with CRA requirements. The donor may use the receipt for tax purposes; the designation as Zakat will be noted.

Reporting & Auditing

• ACF Canada will maintain a separate ledger of Zakat-designated funds, track disbursements, and include an annual summary (or additional Zakat addendum) in its financial reporting or annual donor report.
• The summary will include: total Zakat-funds received; number and geography of recipients supported; types of support delivered; amount spent; and remaining balance.
• ACF Canada’s external auditor will review compliance, and any unspent Zakat funds at year’s end will be rolled forward and clearly reported as such.

Governance & Review

• The Senior Leadership team of ACF Canada will review this Zakat Policy at least every two years (or whenever major regulatory/fundraising changes occur).
• ACF Canada may form an advisory panel (including a qualified Islamic scholar or advisory body) to provide input on Zakat-eligibility criteria, especially where new programme types arise (e.g., livelihoods, cash assistance).
• ACF Canada reserves the right to revise the policy with appropriate notice to donors.

Frequently Asked Questions (FAQ)

• Can I specify which country or individual receives my Zakat?
  No. To preserve the integrity of the programme and comply with CRA rules, ACF Canada cannot guarantee that your Zakat will go to a named individual or pre-selected location. Instead, funds will be allocated to the most urgent needs in its global portfolio.
• What if I’m not Muslim, can I still donate under this policy?
  This policy is designed primarily for donors fulfilling their Zakat obligation. Non-Muslim donors may choose to give unrestricted or general humanitarian support, or to any of ACF Canada’s other funds which are covered under AAHC’s general giving policies.
• How quickly will my Zakat donation be spent?
  ACF Canada strives to allocate Zakat funds within 12 months. Some funds may be held for programme start-up or seasonal timing. Carry-forward balances will be clearly reported.
• How do you ensure funds go to eligible recipients?
  ACF Canada uses rigorous partner selection, field assessments, intake forms, documentation and post-distribution monitoring to ensure that recipients meet the criteria of need and that funds are used for humanitarian purposes.
• What if I have more questions about Zakat specifics (nisaab, lunar year, gold/silver holdings)?
  This policy does not replace individual scholarly advice. Donors should consult their own trusted Islamic scholar or Zakat-calculator for personal obligation matters. This policy focuses only on the receipt and deployment of Zakat funds given to ACF Canada.
• Is this considered Sadaqah or Zakat?
  If you explicitly indicate that your gift is Zakat, then we treat it under this policy. If no designation is made, your gift will be considered general charitable donation (Sadaqah/unrestricted) in our system.