Friday, August 29, 2014

Policy and Procedure defined

Following the delineation of the goals of the project, the ensuing steps revolved around identifying a viable structure and creating a procedure compatible with said goals.  The formation of both could not be complete independent of each other - they had to be worked on simultaneously.  This article will only touch upon the zakat policy and procedure.  The subsequent article(s) will discuss the different structure as well as outline the pros and cons - ultimately defining the current structure realized.  


Therefore outlined below is the most current zakat policy and procedure.  There were several policy revisions and alterations that corresponded with structural changes, hence a more complete understanding of the process will become evident following the discussion of the structure.


The process implemented currently involves the completion of an application.  The application makes it easier to document and track applicants.  However there was the concern that overly burdening zakat requestors may in fact turn them away.  In the Quran the reference is made to those who do not ask for assistance;  


[Charity is] for the poor who have been restricted for the cause of Allah , unable to move about in the land. An ignorant [person] would think them self-sufficient because of their restraint, but you will know them by their [characteristic] sign. They do not ask people persistently [or at all]. And whatever you spend of good - indeed, Allah is Knowing of it. [2:273]


We were unable to form a non application based system.  In smaller mosques, where the Imam and administrators intimately know the constituents, they were able to clearly identify those in need and provide.  However on a larger scale, we could not formulate a method.  This will continue to be one area that we plan on revisiting.  


The application used was a compilation of applications used at different mosques.  We took the most relevant items with the intent of keeping the application short and easy to complete.  Currently it stands at one page, with the back (second) page meant for the administration.  Also taken into consideration with the application was the ease of scanning and or inputting information to a database, as well as the environmental impact; several applications observed were greater than four pages.


The application can be viewed here.  It is currently being used in four locations, with the intent to be used in more locations rendering a uniform process throughout the region.


The zakat review process can be viewed here.  


The steps of the review process were grouped and summarized below.  Notes particular to the process are noted below;


Introduction
The process opens with a quick explanation on the pillar of zakat, as well as the responsibility required by the administrator.  


Application
We recommend that a Zakat Policy be posted, in a conspicuous location, to direct constituents pertaining to the receipt of zakat.  The recommended Zakat Policy and Procedure for posting can be viewed here.  This posted form plays a greater significance is mosques without offices, as constituents often are left baffled as how to receive zakat.    


One particular mosque without an office resolved this issue with a zakat application drop box viewed here.  Subsequently applicants would be contacted and an appointment would scheduled at an unassuming time.


Note that the requirement to apply at the most local mosque was added significantly later in the process.  This outcome will be discussed with the structure of the cooperative.


There is also a requirement for an interview; email or form submissions are not allowed.


Lastly, it was highly recommended that the individual conducting the interview jot down notes, thoughts and recommendations pertaining to the applicant and situation.  This helps overcome any language barriers and nuances otherwise difficult to determine when review paper applications.


Determination of eligibility to receive zakat
Upon successful application submission, the determination of eligibility would have to established.  A large number of applicants in our initial trial were requesting amounts under a certain threshold [$350].  In an attempt to expedite applications under this threshold, applications below it could be processed without committee review.  Periodic reviews of completed applications would happen to ensure compliance.   


Establishment of need
The heart of this process lays in this nuance area.  On one side, the goal is to fulfill the request of those eligible without overburdening the applicant.  However, on the opposite side, we strive to protect the funds of the zakat giver by sifting through the information to ensure that everything is legitimate as we have experienced forged documents.  What is most often experienced is the negligent spending and saving habits of individuals ultimately leading the working poor to a deficiency.  
Most people applying are not interested in financial counseling or recommendations pertaining to their financial well being.  They simply need a bill paid.  More often than not, the bill is paid.  In the event a trend is established, by repeated requests for similar items, an intervention pertaining to their habits is more warranted.


Most important was simply setting up a protocol which would guarantee a consistent process for applicants as well as administrators.


Type and amount of need
We are fortunate to live in a country and society that offer plenty of social services and assistance methods to those eligible.  However the majority of these programs take quite a bit of time to complete - from applying to approval.  Unfortunately time is not on the side of most applicants.  In the event time may not be of the essence, or a pattern was identified, or the request lay outside the realm of our assistance, applicants are requested to apply at outside agencies.  Currently we do not have a protocol to follow up with applicants to ensure successful agency assistance.  This also warrants revisiting in the near future.


Record keeping and review
As previously mentioned, the majority of applications requested less than $350.  To ensure prompt handling, the review process could be completed by one person - the interviewer.  The cornerstone of this method is the periodic review, conducted by the larger zakat committee, to ensure compliance.  Hence there must be a safe method of storage for applications.


Defining of Asnaf
The review process is concluded with a quick explanation on the different categories of recipients as well as distribution allocation.  With the prevalence of poor and needy in the immediate vicinity, the priority defines was with the poor and needy.


With the process clearly defined, subsequent articles will outline the structure implemented.  If you have any questions or recommendations pertaining to the process, please feel free to comment or contact us.

Friday, August 22, 2014

The objectives of the Inland Empire Zakat Cooperative

With the strengths and weaknesses of the local zakat sector clearly identified, it was now time to put together objectives that would not only resolve the impasse existent in the local zakat sector, but ensure that the outcome can expand and is easily replicable.  Hence, we had to move beyond SMART goals to SMARTER goals.  The additional E corresponds (easily) Expandable - the addition of local mosques is simple and encouraged.  The R would correspond with Replicable - as the intent is not only to expand our local area of cooperation, but to create a system that could be duplicated elsewhere.


The objectives could be broken down into several areas.  The general objective, or mission, would correspond to the long term goal to be accomplished.  The remaining three goals, Management, Platform and Legal correspond to the targeted statements outlining the direction and focus.  Lastly, the strategy would correspond to the method of implementation.


General
  • To advance the field of study and research in the area of American Islamic Finance; specifically zakat management [collection, handling and distribution].
  • To create and achieve an effective, efficient and expandable working model for zakat management in the geographic area.


Management
  • to foster a working relationship between Mosque and Islamic organizations in the IE specifically on the zakat (and possibly social service) sector
  • Implementation a transparent system for the a) collections b) handling c) distribution of zakat.
  • Educate [zakat professionals and constituents] of rulings and rights.


Platform
  • Design a platform that would influence and address large scale behavior.  
  • Create a welcoming and encouraged feedback system where the findings and suggestions can immediately implement change.
  • Devising and implementing regulation mechanisms.
  • Standardized and transparent accounting and operating procedures.
  • To create a distribution model that ensures the most efficient and robust distribution method which balances invasiveness and ease [for the applicant] but yet ensures diligence in the review process.
Legal
  • To ensure that specific rights of the zakat are handled correctly.
  • To ensure proper handling of the zakat funds.
  • To offer the resolution of jurisprudence issues by implementing views and rulings that fit our community best while attempting to retaining and respecting the divergence of views among different schools of thought.
  • To focus on the poor and needy in the vicinity; as the Inland Empire, according to a 2013 US Census Bureau report, ranked the highest, among the nations largest 25 metropolitan areas, for residents living below the poverty line.


Strategy
  • Capitalize on the wealth of cumulative knowledge and experience in the region.
  • Capitalize on volunteers in existing mosques and organizations.
  • Create a cooperative of mosques and organizations working together vs a new organization.

Thursday, August 21, 2014

Identification of the problem

The very essence of Islam is an all inclusive system of life with guidelines set by the creator.  The system includes all aspects life from business dealings to relationships with our neighbors.  Also included are the dealings of charity and rights of the destitute in society.    


Zakat, being part of the larger socio-economic system in Islam, is the safety net decreed by the creator for providing for the poor and needy.  Having interaction with the poor and needy, as well as individuals requesting and applying for zakat at local mosques, it was fairly obvious that the rights of the poor and needy in the community were not being met.


Spurred with a few others who work in the local zakat sector, or who have interest, we decided to assess the current state of zakat in our respective community.  We formulated a questionnaire to be addressed to zakat workers or mosque administrators within our geographic area.  The Inland Empire boasts over a dozen mosques and organizations within a fairly small area.  The sample size and close proximity would only help clearly identify any problems that did exist.   


Subsequently we met with eight mosques and inquired about their zakat dealings.  The questionnaire can be viewed here.


An amazing happened when talking to the respective zakat worker.  Literally every one indicated that they were well aware of deficiencies within the system.  However due to the reality of volunteer driven mosque management, the correct and implementation of issues were always low level priority items.


The results of deficiencies in the local zakat sector could be grouped into three main area; zakat collection, handling and distribution


Zakat collection
Every mosque surveyed did disburse zakat to individuals they deemed as qualified to receive.  However not every mosque collected zakat funds - or collections boxes were not specifically earmarked for zakat; sadaqa, Mosque donations, operations...


Zakat handling
Proper handling, as well as transparency, of funds has been shown to increase receipts, and quell mistrust, by building confidence.  A methods of mishandling observed was the commingling of zakat funds with other funds as well as a lack of transparency with the funds.  


Zakat distribution
This area comprised of the majority of deficiencies.  In an attempt to formulate a group, they’ll be broken into two subsets - managerial as well as legal issues.


Managerial
Having previously served on a mosque board, as well on the boards of several other organizations, I understand that most of the individuals dealt with are volunteers; however all of them are overworked.  The addition of policies and procedures may not be warmly welcomed, as time is of limited quantity.  To further compound the issue, there existed a culture of frequent turn around is mosques with elected (or removed) managers/board members.  The turnaround typically replaces individuals (with more experience) with individuals who have no experience.  This would not only affect management effectiveness and synergy, but also impact the rules and requirements pertaining to zakat.  Hence an unsustainable model is created.


Only a handful of mosques had a procedure in place to assess applicants.  The end result was long turnaround times (also impacted by the overworked volunteers) and an inconsistencies with distribution policies.  In fact one applicant interviewed commented that his experience has shown that only a certain group/race would be given zakat from his local mosque.


Several mosques could not distribute, or severely limited distribution, due to limited zakat collections; primarily mosques in destitute areas.  This highlighted a more severe issue; a vicious cycle that was created where mosque that were unable  to collect could not meet demands for distribution.  Ironically the opposite scenario also existed.  


We were not made aware of any internal or external auditing of any funds or procedure, which could lead to mishandling or mistrust of the procedure as noted previously.  Several mosques did have financial figures posted, however were typically outdated.


The majority of mosques did not have a physical office, or one that is not commonly open, making the application process slightly more difficult.


Legal
There exists a large deficiency regarding the edifice of zakat law.  Workers, with good intention, are just simply never made aware.  The result is a system which contradicted several clear sharia principles, e.g., incorrect distribution of zakat al fitrah or lack of distribution because of an underlying sense of creating dependency (or transformation from a zakat recipient to payer would not materialize).  


There does exist a level of hesitation among zakat applicant because of an underlying sense of shame due to applying.  I believe that the real issue is lack of understanding of the specific rights of zakat; most, if not all, zakat khutbahs, seminars and talks revolve around the benefits of giving zakat as well as the jurisprudent requirements and amounts of zakat payments.  The constituents are never made aware of the right of zakat upon the recipient.  The Prophet(S), as well as subsequent leaders, would teach congregants about their respective rights quelling any shame associated with zakat receipt.  Zakat continues to be viewed a mere charity given to the poor at the discretion of an administrator.


Unfortunately there are fraudulent applicants; forged documents as well as applicants who may be recipients elsewhere without disclosure.  The reality creates a sense of hesitation to provide zakat to individuals who may be receiving zakat elsewhere.  There currently existed no method in place to verify or cross reference applicants at neighboring mosques.  There exists a coalition of mosques (Shura Council of Los Angeles), however zakat is not yet included in their activities.  Chicago boasts a council of Islamic Organization with an offshoot dealing specifically with zakat.


The current structure of mosques set in our country implies, to us, that the deficiencies noted in our geographic area, can be extrapolated to the larger area.  Hence the addressing of these particular issues will be of a greater benefit for more than our locale.


With the deficiencies being stated, it would be doing the local mosque community a huge disservice by not acknowledging the strengths.


Every mosque we spoke to has a very sincere group of volunteers that sincerely cared about the best interest of their community.  They worked tirelessly and had a commitment hardly rivaled.  The cumulative knowledge and experience is truly a benefit to our area.


The mosques with more stable management (less turn around), and the smaller mosques, knew their respective constituents very well.  They had intimate knowledge of the challenges, needs and threats of the community.


Lastly, we must emphasize the gratitude that must be conveyed to the local mosque leadership as well as the zakat workers who gave me the opportunity to discuss and reflect upon the pillar of zakat.


Consequently, the challenge now lay before us:
Given the strengths of the mosque community and administrators, could the identified zakat weaknesses be reduced or eliminated?