70% of charities said that they will ‘go bust’ by the end of the year, according to a survey by the Directory for Social Change. Despite this, many Muslim charities seem to be weathering the storm. Some are even reporting a significant growth in giving during Ramadan in 2020, which is typically the busiest time of the year for Muslim charities.
Up until now, there has been limited research into Muslim giving in the UK. A recent report authored by Professor Cathy Pharoah, of Cass Business School, has sought to change this. The report, ‘Building a picture of Muslim philanthropy in the UK context’ aims to provide the first comprehensive overview of the sector, looking at existing data and analysis of annual reports and accounts.
The report paints a picture of a strong and diverse sub-sector with a great focus on international humanitarian projects. At the same time, a growing number of organisations are emerging with a particularly UK-focus, NZF among them.
To accompany the release of this report, Rizwan Yusoof, NZF Director of Services reflected on the potential reasons in his accompanying article below:
Muslim charities and foundations derive much of their funding from voluntary donations. When a crisis hits the economy, the livelihoods of the general population are inevitably affected. House prices fall, while household borrowing and unemployment rise. The outbreak of Covid-19 has caused the deaths of over 40,000 people and the economy to plummet by over 20% in a single month. It is having the same tragic impact on people as previous crises, only more severely and on a larger scale than we have seen in our lifetimes. As many people throughout the UK have seen their income drop significantly, many others know they are going to experience this all too soon. So, as people are naturally tightening their belts, it is fair to speculate that spending less will mean giving less too.
This change in giving patterns is having a shock effect on charities. The NCVO recently estimated that the Third Sector stands to lose £4 billion in charitable giving income in the first of half of the year. 70% of charities said that they will ‘go bust’ by the end of the year, according to a survey by the Directory for Social Change. This year, the most auspicious month of the Muslim calendar coincided with the lockdown and so Muslims experienced what can be described as a “Remote Ramadan.” This is a month in which Muslim donors are at their most generous, with estimates suggesting that the UK’s Muslims give over £130m during Ramadan. Would Muslim giving hold up, given people’s loss of income, the absence of physical fundraising events and appeals in mosques and other reminders in different spaces?
The answer, it seems, is yes absolutely! In fact, it appears that some Muslim charities have seen a marked increase in their incomes during this difficult period. Islamic Relief, one of the UK’s longest-standing Muslim charities raised a record 30% more than in 2019. MyTenNights, an online facility which collects charitable donations for several Muslim charities reported that £6.8m had been donated on its platform in the Ramadan 2020 period, compared with £2.7m in the previous year. And, National Zakat Foundation, a platform which connects Zakat givers to recipients in the UK, saw a 43% increase in its online income year on year. So how has this been possible? What are the foundations of this apparent resilience to the crisis?
Muslims see charitable giving as an investment in their future
Muslims believe that the soul is an eternal being which is subject to accountability for its deeds. With the aim of achieving God’s grace and the belief in reward for good deeds in the next life, a Muslim may be motivated to give to those in need despite feeling financially vulnerable themselves. The coronavirus outbreak brought with it the additional, tragic feature of illness and death, providing. This would also have brought to the fore a heightened sense of one’s mortality, their legacy and future. This eternal dynamic is crucial in providing perspective to Muslims when faced with crises, with the belief that this life is temporal, and may go some way to explaining the positive responses some charities have seen from their Muslim supporters.
Zakat: a unique form of religious social welfare
There is another reason: Zakat. Zakat is the third of five pillars of the faith and the primary form of obligatory giving in Islam. Zakat, unlike other forms of voluntary giving, requires Muslims with a certain minimum level of disposable wealth (currently £262) to give away 2.5% of it each year. Unlike charitable giving, which is voluntary, Zakat is a specifically calculated obligation – effectively a religious wealth tax. The 2.5% a person must give is not considered their money once it becomes due for payment. It is the right of someone else and non-payment is a violation of that right. The fact that the amount that is given is a specific proportion, and not an emotional decision to be made by the donor, is a specific source of resilience.
The ‘Ramadan Effect’
Muslims typically give their Zakat, along with other voluntary income, during Ramadan, the most auspicious month in the Muslim calendar. This year, Ramadan, coincided with the relatively early period of the lockdown, during May. Zakat is paid annually on a snapshot calculation of a person’s wealth, not their income. At this point, job losses hadn’t been experienced on a wide scale, and people may not have yet experienced a significant reduction in their assets.
So in 2020 many Muslim charities were not only insulated from the reduction in charitable experienced by other charities, they were able to help the significantly increased number of people coming to them seeking help. The challenge for Muslim charities will be to make the case to donors that they remain the best place through which to give Zakat next year. It may be that UK Muslim charities continue to see strong support, as more people appreciate the need is so close to home.
Read Professor Cathy Pharoah’s Report
