بِسْمِ ٱللّٰهِ ٱلرَّحْمٰنِ ٱلرَّحِيمِ
Zakat and Charity Policy
Purpose: The purpose of this document is to define the parameters under which AICC collects and distributes charity – be it Zakat, Sadaqat, Funeral Expense, or any other charitable giving – be it cash, property, or service time.
Collection: There are no restrictions from whom we accept donations for this fund. Although specifically ear-marked for Zakat or Charity, the donor will still receive a receipt for tax deduction purposes. In most cases, only cash donations will be accepted. On a case-by-case basis, AICC may accept goods/services as eligible zakat/sadaqat donation(s). Except in community-driven circumstances (e.g. community drive for an eligible person), the donor may not specify the zakat/sadaqat towards a specific person; even in cases of community-driven effort, if the need is no longer there the funds will go into the general respective charity pool.
Account Maintenance: The funds shall be kept in a checking account that is unique and separate from the core operating accounts of AICC. A balanced ledger must be maintained of all monies in and out. An annual financial report shall be provided to the AICC Board of Directors (BOD) and Executive Committee.
Administration: The Board shall appoint a trusted member of the community to administer the charity funds. The person shall have good moral standing in the community. In cases of increased workload, the charge may grow to more person(s), with the approval of the Executive Committee, in consultation with the BOD.
Remuneration: Those charged with the administration of the charity funds will generally not be monetarily reimbursed. However, as zakat funds can be put towards one Zakat Administrators, if the work becomes one that cannot be adequately done on a voluntary basis (due to the time commitment and professional needs, or for any other legitimate reasons), then a portion of the Zakat funds may, with the approval of the Executive and Religious Committees, be used as salary for the appointed Administrator(s).
Who: The distribution of funds shall be limited to the immediate community, defined as 50 miles of the AICC. If there are remaining funds and none in the locality are in need, then with the permission of the Executive Committee, funds may be distributed to those in the United States who are eligible. No funds should be directly sent overseas; however overseas distributions may, in circumstances where there is not a local need or in case of deemed dire need beyond the United States, be distributed to a verified 501(c)(3) organization who themselves are able to render these services.
Zakat Distribution: Those receiving zakat funds must be from one of the zakat eligible categories and meet the financial requirements of being zakat eligible. They must attest to this fact by filling out the Social Services Application Form. The circumstances of those applying to receive Zakat must be vetted by the fund Administrator, in an expeditious and merciful manner. Once clear that the person is indeed eligible, they may receive funds in one of two ways: as a direct payment via check (never cash) or with payment directly to their debtee(s) (for example direct rent or medical bill payment). In general, it is preferred that the debtee be paid directly.
Sadaqat Distribution: As the religious criteria for sadaqat are less stringent than zakat, those who have applied for Social Services and are deemed in need but not zakat eligible, may be provided for via the general charity (i.e. Sadaqat) funds. Disbursement should occur as already outlined above.
Funeral Expense Fund: Those families needing financial assistance for funeral/burial expenses may have these expenses covered by the respective funds. With rare exceptions, granted by the Executive Committee, these payments should be made directly to the contractor(s) rendering funeral/burial services. As AICC also operates a cemetery and burial services, when this service is rendered by AICC the appropriate funds may be transferred to the core operating account(s).
How Much: In general, there is not a limit on the number of funds one may qualify for. However, any distribution of $2,500.00 or more will require approval from two members of the Executive Committee. A distribution of $5,000.00 or more should be reviewed by the entire Executive Committee or designated committee. If a person requires ongoing support, the case should be handled in a manner that alleviates the financial distress on a more permanent basis; aggregate annual disbursement of more than $5,000.00 should prompt such a review. So as to allow enough funds to benefit the maximum number of people, the broader community need should be taken into consideration when allocating individual grants.
Why: None of the funds can be used for non-Islamic purposes. Outside of that, there is not necessarily a limitation on what an applicant may use funds on. If the applicant is found to use funds in a wasteful manner, as judged by the Executive Committee, they may face limitation or exclusion from future distributions.
Duration: There is not a set duration or time limit on how long someone may qualify for or apply for assistance. However, if a person’s situation is such that the need will be prolonged, the funds should ideally be used in a manner that establishes them on a firmer and more independent financial footing. Further, if the need is prolonged, e.g. someone will need months of rental assistance, funds should be portioned out monthly so as to prevent abuse and misuse.
Conflict of Interest: If the person applying for funds is connected by financial or familial ties to any BOD member, Executive Committee member, or Administrator(s), then these people must recuse themselves from the decision-making process and distribution, with another member (s) adjudicating.
Reporting: In general, no tax reporting is required of these distributions. If payment in excess of $600 is made directly to a for-profit debtee (e.g. Landlord or another vendor who is not a 501(c) (3) non-profit), then a form 1099-MISC should be completed and provided to the vendor. Record Keeping: Aside from the accounting, the Social Services Application Forms should be scanned into a PDF. This may be done in bulk by the quarter or year. The paper copies should be kept in a binder and the paper records maintained for seven years.
Approved on 5/31/2021
Revised on 09/08/2021