Tuesday, September 9, 2014

Centralized Distribution System Experiment

With the zakat policy and procedure tentatively defined, we moved to examining different types of distribution structures.

Typically zakat model structures can be defined as centralized or decentralized.  Centralized models can be defined as a ‘one stop shop’ leveraging economies of scale in such issues as, protocol, operating procedure, credentials of administrators, accounting systems, resolution of jurisprudence issues, etc.

There are several centralized organizations operating nationally [Islamic Relief, Zakat Foundation of America] with local collection presence.  However the modus operandi observed was to assist those in need primarily overseas.  

Decentralized models are simply each mosque or organization operating independently of each other in terms of protocol, procedure, jurisprudence, etc.

At the inception of the cooperative, all mosques and organization models were decentralized.  The result of the decentralized structure could be understood by referring to the post Identification of the problem;’ a vicious cycle of not having the resources [financial, knowledge, volunteers, etc] to correct any deficiency, let alone stabilize and/or excel.

This quandary leaves the zakat payer to give zakat to an inefficient local mosque, an organization that primarily distributes internationally or embarking on their own independent distribution.

Similarly the zakat recipient is burdened with considerable challenges in obtaining zakat.

The initial inclination was to create a centralized system that would envelop the goals of the cooperative [detailed in the Goals of the Zakat Cooperative]

The apparent advantages a of centralized system were
  • Complete control of the review process; to ensure uniformity and consistency
  • Creation and use of a central database to facilitate efficiency and diligence
  • a central location [and/or virtual review process] where applications could be reviewed quickly
  • Cooperating zakat administrators could participate in the review process if so desired
  • Ease of integration at mosques; administrators would simply forward the application
  • Minimal involvement and commitment by administrators; not much time requirement

The centralized model concept was hinged upon the use of technology to expedite the process.  This primarily would be accomplished via the creation of a database where applications would be uploaded and reviewed - the details of the database will be discussed in a separate post.

We considered providing equipment to several of the mosques, i.e., computer and scanner, however the infrastructure was still not present; most mosques did not have an office, let alone a computer, scanner and internet connect.

This deficiency was corrected by setting up a courier to pick up applications and drop off checks for approved applicants.  Applicants that were either incomplete for required more information, the majority of them, were similarly shuttled.

This system worked well initially, however as more applications started to come in from surrounding areas, we discovered several issues that made the review process difficult;

  • Reviewing and deciding applications on paper, in lieu of an interview, was rather difficult.  Often times there was a communication barrier preventing applicants from completing the application and/or there existed nuances which could not be specified.
  • In the event of an inconsistency or when clarification was required, the application would be sent back to the mosque, which further delayed the process as they would need to contact the applicant for an explanation or clarification.
  • The meetings to review applications, of the initial zakat review panel, were taking quite a bit of time.  In the event a weekly meeting was canceled, the resulting meeting would take an exponential amount of time - ultimately rushing the review the process.
  • The virtual review method could not be instituted because of the lack of infrastructure, overburdening a small group of zakat administrators meeting in person.
  • Due to limitations with issuing checks, in the event a check could not be immediately, or was issued incorrectly, deadlines and due dates were often missed.  This was further compounded with the delivery mechanism.

In an attempt to circumvent longer wait times, applicants would avoid applying at their local mosque and make the journey to apply at the mosque where the processing was being completed.  This burdensome step was often difficult for applicants, many of whom lacked transportation methods to go out of their community.

Consequently the handicapped centralized model greatly lengthened review times and often forced applicants to seek assistance at mosques outside their immediate area.  The result was a regression of the zakat distribution process in the region.

We further attempted to rectify the performance gap witnessed and the optimal model that we had envisioned by making several adjustments to the policies, e.g., submission of only complete applications and attachments; however the results continued to be sub par.  

It was appearing, rather obviously, that the centralized model would be difficult to operate when not utilizing technology to full extent.  It has also been demonstrated, for years, that a decentralized system was quite ineffective.  This interesting predicament forced us to examine and consider other distribution systems that could help accomplish the stated goals.

We still have faith in this centralized model and believe that it could possibly work better if mosque infrastructure is improved.  However moving forward we attempted a hybrid structure which yielded some promising results.


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