The purpose of Zakat is ultimately to increase faith and devotion to Allah (God). It also acts as a social safety net for those in need and a means to uplift the entire community and help Muslims and Islam thrive. Zakat is a pillar of Islam and as such it works together with the other four pillars as a way of upholding and strengthening the religion.
By giving Zakat Muslims cleanse their own wealth. Zakat helps to keep the economy flowing by freeing people from burden and giving them the chance to reach their potential. Zakat, when it works properly, should have a long-term impact for the state of the whole Muslim community.