Philanthropy and charity are concepts of central importance for Muslims. As the obligatory social tax, Zakat, is one of the pillars of Islam, and additional good deeds (Sadaka) are recommended for every bone of the body, it is no wonder that giving matters. The total figure of Zakat in the Muslim world in 2006 has been estimated at between $250 billion and $1 trillion.
Muslims maintain a high level of morality towards the poor, for which Zakat is predominantly to be used. Sadaka, the voluntary giving or good deed, is a wider term and can mean giving to the poor, simply offering a friendly word or giving happiness to people. While Zakat is pure charity, Sadaka is closer to the idea of philanthropy, which also covers a wide range of subjects and targets, including the support of art, culture or knowledge along with funding.
The two leading billionaires Bill Gates and Warren Buffet decided to fight for certain causes by funding a foundation with their wealth, which is now the largest private foundation in the world. The concept of foundations is well established in Shariah, and many believe that foundations more or less derived from the Islamic endowment concept of Waqf (plural Awqaf), which is a legal entity under Shariah that survives after a person's death.
High-Impact Giving
Every year, Islamic philanthropy is a topic at the Annual Islamic Wealth Management Event, held in Geneva in May. The discussion point this year concerned how to increase the impact of giving. This question is now a core issue onthe agenda of private philanthropists worldwide, those who have made fortunes as entrepreneurs and are looking to apply a similar goal oriented and effective approach towards their giving. In total, the funding by these private philanthropists is not as great as state-level social work or international aid, so their interest has turned towards venture philanthropy, which takes risks at an early stage to foster a good cause.
Dr Maximilian Martin was one of the panellists at the Islamic Wealth Management Event who explained how private philanthropy can play an agenda-shaping role. By joining together other expertise, philanthropists who drive innovation can maximise their intervention models at a later stage. Count Albrecht Matuschka recommended a variety of ways to create change in providing basic medical care, education and food. For example, a few standard medications could eliminate 80 percent of diseases in poor areas. Other basic supplies such as water and sanitation are excellent market opportunities, whereby good deeds and profits are not mutually exclusive.
Muslim philanthropists need to identify the most effective treatments to fight poverty and solve social issues in the Muslim world. To take it forward, they could seed finance activities not yet suitable or ready for public funding, proving concepts that could later be taken up by institutional donors. Islamic microfinance, for instance, is one area which needs innovators to show its viability. Other areas can benefit from a combined business and philanthropic approach, whereby products are designed to meet the needs of the poor and basic healthcare, schooling and sanitation get promoted as charitable causes where necessary, and as business approaches where already sustainable. An example would be the rejuvenation of slums by a real estate developer, giving the former inhabitants ownership in better housing than they had before, with proper sanitation and sponsored schooling for youth.
Everybody Wins
Every faith has its concepts of philanthropy and should make use of them to serve the cause.
The Quran requires mankind to compete with each other to the greater good. Instead of a clash of civilizations, we should use the human nature of competition to see who can do the most good. In giving, we all win.
© IslamicFinance.de 2007
