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Response to WhatsApp message about charity costs and donation policies

Response to WhatsApp message about charity costs and donation policies – Iqbal Nasim, Chief Executive, National Zakat Foundation – 21st May 2019

I have seen the message that has been doing the rounds on WhatsApp identifying National Zakat Foundation as one of several “charities with high costs” that “can’t be 100%”. The figures quoted were from our 2017 accounts. Unfortunately, the message used information selectively and presented it in a way that has been very confusing and misleading for many people.

Thank you to everybody who has reached out to understand the facts behind the message. Below we identify the myths underlying it and provide relevant facts for your consideration:

Myth 1: Gift Aid funds wages

Fact: It is not helpful or relevant to compare wages with Gift Aid. NZF has never claimed that Gift Aid would be used for the purposes of wages only, nor that wages would only be covered by Gift Aid.

Fact: Even if you wanted to compare wages with Gift Aid, the difference in 2017 was more than covered by voluntary donations specifically given for administrative costs. By that measure, even though we do not support the idea of a 100% donation policy, NZF was more than a 100% charity!

Fact: We have always been clear that a small amount of the Zakat we collect goes into covering the direct costs of supporting the Muslims we help. For every £12 of Zakat we collect, £11 goes directly to people we support and around £1 covers the direct costs of providing support, including wages. The £1 that is spent in this way ensures that the £11 is as impactful as possible.

Fact: All other administrative costs and the cost of raising funds are covered by voluntary donations (Sadaqah) as well as Gift Aid. Our donors who give Sadaqah actively want to support the core costs of NZF. If they are investing in costs like salaries or our phone bills, that’s a good thing – it helps us to help more people.

Myth 2: A wage increase is a bad thing for a charity

Fact: At NZF, the total amount spent on wages did increase by 31.5% from 2016 to 2017, but we also went from 19 to 25 staff. In 2017, we almost doubled our charitable expenditure from £2.6m to £4.6m as our income grew, so we needed to bring on more people to help us support those in need as well as provide critical education and calculation related support. The average salary of our staff members remained at £27,000.

Myth 3: The best charities are those that are “100% donation”

Fact: Different charities mean different things by “100% donation”. You would need to analyse accounts in detail to see what charities mean when they claim this.

Fact: Supporting NZF’s core costs means you are paying skilled people to carry out the work of the charity – to benefit Muslims, to benefit Islam, to benefit society.

Fact: In the Qur’an (9:60), Allah specifies that the third category of the eight categories of Zakat are the ‘amileen – those who collect and distribute Zakat. The point here is that Allah Himself stipulates ‘admin’ costs as a core part of the third pillar of His deen.

Myth 4: The best charities are the ones with the lowest salaries

Fact: The amount spent on salaries by any charity does not give any indication as to the quality of its work or its impact.

We do not assess the quality of a school by looking at the salaries of its teachers.

We do not choose which football team to support by looking at the salaries of its players.

Instead, we focus on the impact: what results have they achieved?

The same principle applies when it comes to charities.

Fact: Different kinds of support cost different amounts of money. For example, it is cheaper to support people in emergencies rather than longer term development. Comparing costs of different kinds of support is like comparing apples with pears.

Your Zakat is making a huge difference to people here in the UK. See our 2018 Impact Report for our latest achievements:

Everything we do to support people in need relies on you joining other Muslims to give Zakat through National Zakat Foundation (NZF).

If this message has helped you, please share it with others. Feel free to get in touch with me directly if you have any questions.

Iqbal Nasim

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