If you are a Muslim living in Australia, it can feel difficult to know how to properly follow your faith in a country in which only 2.2% of people follow the Islamic faith. If it is time for you to give Zakat you may not know where to whom to give it.

Luckily, there are several organizations within Australia to help you out. But it is a good idea to understand everything that goes into Zakat before deciding. Let’s take a look at the definition of zakat and where you should think of contributing before you make a decision!

What is Zakat?

Zakat is a form of charity within Islam. Zakat in Islam is a religious obligation for almsgiving. The amount that you should give to charity is not just based on your wages or how much you have in savings. Zakat is based on how much your total wealth equates, so if you own multiple cars or extra luxury items, then those should be factors.

There are certain things that are exempt from the wealth tally depending on the viewpoint your faith takes. Some scholars do not consider women’s jewelry to be a part of zakat calculations unless it is excessive, not used, or if it reaches a certain weight of gold.

But how do you know how much to give? The amount you give is based on whether you reach a certain threshold, known as the Nisab.

What is Nisab?

Nisab is a threshold that is determined typically by value as it relates to gold. The Nisab threshold is at three ounces of gold. As the value of gold can fluctuate regularly, it can be a good idea to look up the current exchange rate before you are ready to pay.

If you find the value of your earnings and compare it to the value of three ounces of gold you will know if you have exceeded the threshold. If you have exceeded the Nisab threshold you will have to pay a certain percentage of the amount of wealth you have that exceeds the Nisab. This percentage is typically 2.5%.

Still, it can be confusing to know exactly how much you should be contributing. Because of this, many people use a zakat calculator to figure everything out for them. This will look at the value of gold as it relates to the Australian dollar and factor in your various forms of wealth to create a number for you.

Additionally, this shouldn’t stop you from contributing above your zakat if you would like to. This can be known as sadaqa, let’s take a look at what that is.

What is Sadaqa?

Like zakat, sadaqa is an important part of Islam and if you are Muslim, you should take part. Both zakat and sadaqa involve charity, with sadaqa being a sort of umbrella term for giving to charity. However, where zakat is a compulsory form of charity, sadaqa is not necessarily compulsory and most is voluntary.

If you are concerned about charity, you may also be concerned about your loved ones having enough money. If you have money invested in a superfund, it’s a good idea to make sure that that money is properly directed to a loved one in the event of a tragic situation. Check out how to nominate a beneficiary today.

Who Can Receive Zakat?

We discussed that those who give zakat calculate the amount based on their total wealth, not merely their monetary wealth. For the people who can receive zakat, the principle is the same. To determine if someone is eligible they don’t just look at the money you have on hand, but rather if you have excesses such as two cars or a larger than average home.

In totality, they should not have more wealth than the Nisab threshold. This is excluding, of course, basic necessities for living – if the person lives in an area where a car is necessary to get them to and from work, then that is not counted.

There are also other rules, such as the recipient of zakat not being closely related to you. This means your children or grandparents cannot receive zakat from you.

Best Zakat Accepting Organizations in Australia

Just like when it comes to investing in a superfund, you want to make sure your money is going to the right places. Luckily, we have compiled a list of some of the best options for you to consider when it comes to donating your zakat. Let’s take a look at some of your best options in no particular order.

1. Ahlus Sunnah Wal Jam’ah Association of Australia (ASWJ)

As with every organization on this list, this association is a non-profit that is focused on the needs of Muslims in Australia. They are committed to spreading their branches across Australia with three separate locations. One each in New South Wales, Victoria, and Western Australia.

This means that your funds will go to an organization that isn’t limited to just one area of Australia while still staying focused on the local community. Of course, none of the associations on this list are limited to zakat donations. You can support them at any time for a variety of programs and projects.

ASWJ has been around for over 30 years and provides several different programs for serving the community. They offer youth services, family counselling, Quran programs, and more. Their zakat collection services work with internationally recognized affiliates to send your donations around the world to the people who need it the most.

2. United Muslims of Australia

If you are looking for a non-profit that specializes in several different uses for your zakat, then this is the one. They’ve been around for over 15 years and run the largest Islamic Youth Centre in Australia.

Their Zakat Fund is used in several different ways. It provides funds to those who wish to train as Imams so that they may someday teach Islam in Australia. This can be important as many cannot afford to study so that they may teach – this fund can help them fulfil their dreams.

This fund is also used to help new Muslims who have just accepted the faith. This helps people in need who may be facing bad situations because of their new acceptance or re-acceptance. This lets people know the community they have joined is committed to helping them survive and thrive with everyone else.

Finally, this fund is used to help the poor. In particular, they focus on widows and orphans who may be struggling the most. This helps local Australian Muslims to survive and live good lives.

3. Islamic Relief Australia

This non-profit has over 36 years of experience in providing Islamic relief around the globe. They provide many opportunities for volunteering and providing relief in countries that are experiencing much upheaval, such as Yemen and Palestine.

They have several different areas of focus. When you donate your zakat to Islamic Relief Australia they use the funds in accordance with the Quran. Funds are given to the poor and needy as well as those who have recently been brought back into the faith.

One of the unique ways in which this organization operates is through the use of funds to create sustainable futures. For instance, teaching adaptive farming techniques that can be used in places such as Indonesia. But they also provide immediate disaster relief and refugee support should it be required.

4. National Zakat Foundation

The NZF has distributed over eleven million dollars worth of zakat funds in the past 8 years. They have used this money to provide relief for a vast array of situations. These include things such as homelessness, refugees, single parents, orphans, medical assistance, and domestic violence.

They commit to uplifting their community in all aspects of life. They can help in these various situations by providing things such as crisis accommodation, vouchers for essentials, community stores, legal services, tutoring, and counselling.

They specialize in helping out Australian Muslims from children to elders to help everyone grow and succeed while maintaining their faith. This is an organization that is primarily focused on the distribution of zakat funds above all else, so it is more specialized.

What Else Should You Know?

If you have concern about where your zakat is going, you might also have concerns about where your wealth is going. Are you sure that your wealth is invested in areas that you are comfortable with, and that are in line with your Islamic beliefs? If this is important to you, it is a good idea to look into investing funds that care about you and your beliefs.

This is where an Islamic super fund comes in. You can join over 10,000 similar people whose funds are being invested in areas such as health care and natural resources, rather than things such as weapon manufacturing or gambling services. Check out Crescent Wealth today and see how you can build a more ethical future for yourself and your loved ones!

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Islamic Money Expert

Fatma currently leads Crescent Wealth’s Operations, including strategic business planning, project management of major projects and management of key stakeholders.

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