Where are We Heading?: Case Study of Zakat Institution in Brunei

Zaki Zaini and Khairul Hidayatullah Basir

Sultan Sharif Ali Islamic University (UNISSA), Brunei Darussalam

zaki.zaini@unissa.edu.bn

Keywords: Zakat management; Objective of Zakat; Role of Zakat; Performance Management.

Abstract: This study will look into how clear does the zakat institution in Brunei is aware of its intended objectives as

well the issues and challenges in achieving those intended objectives. This research uses quantitative

descriptive analysis method to measure the progress of zakat council in attaining the objectives of zakat.

Similarly in the sphere of zakat, zakat officers are the backbone of zakat management, they must have the

right attitude towards Zakat, they must strongly believe on the capability of Zakat especially in contributing

towards socio-economic justice as well as its role in achieving national vision 2035 and the global agenda

2030.

1 INTRODUCTION

Paying zakat is one of the five main pillars of Islam

and in fact paying zakat is the second most important

act of worship after daily prayers. Zakat literally

means pure, growth, and technically zakat means to

purify, to clean and to grow while legally Zakat

means paying out the proportion of your excess

wealth and distributed to those who are specifically

prescribed in the Quran:

“Zakah expenditures are only for the poor and for

the needy and for those employed to collect

[zakah] and for bringing hearts together [for

Islam] and for freeing captives [or slaves] and for

those in debt and for the cause of Allah and for the

[stranded] traveler - an obligation [imposed] by

Allah. And Allah is Knowing and Wise” –

(Tawbah: 60) (Sahih International).

The collected Zakat fund should only be

distributed to the eight recipients: the poor, the needy,

the Zakat administrator (amil), the converts

(mu’allaf), those who are in bondage, the debt-ridden

(al-Gharimin), the way of God (fisabilillah), the

wayfarer (ibnu-sabil). Despite all the eight recipients

have been clearly mentioned in the noble Qur’an, yet

the criteria to specifically define each group might

vary from place to place.

The role of Zakat institution is very crucial in

shaping the impact of zakat in the society, the more

effective and efficient the institution is the higher the

impact of Zakat could have on the society and the

economy as a whole. Zakat should not be seen as

simply an act of worship but rather to observe zakat

as an important socio-economic tool. The most

literature discusses the extent of what zakat can

contribute to the society and the economy but yet such

positive impacts are yet to be realized especially its

role as to eradicate poverty. In order for zakat to be

treated an important tool in the economy especially

by the Government- zakat institution must play its

role accordingly. It can be learned that the

responsibilities borne by the zakat institution are

exceptionally comprehensive ranging from creating

awareness of paying zakat to contribute to achieving

global socio-economic agenda such as Sustainable

Development Goal. However, the role of zakat in an

economy must be clear, how it integrates with other

system and most important how do zakat and other

mechanisms would work together to achieve the

ultimate goal which is to achieve socio-economic

justice.

Objectives provide specific milestones with a

specific timeline for achieving a goal while Key

Performance Indicators (KPI) are measurable values

and can be compared that demonstrate and provide

evidence how effectively an organization is achieving

its key objectives (Intrafocus, 2014). All sets of

planned outputs must be aligned with the overall

mission and vision of the organization (Aminuddin,

2014). Hofstrand (2016) explains that, vision

provides a destination for the organization while

Zaini, Z. and Basir, K.

Where are We Heading?: Case Study of Zakat Institution in Brunei.

In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 54-59

ISBN: 978-989-758-315-5

mission is a guiding light of how to get to the

destination

The success of zakat in an economy can be traced

back to the era of caliph Umar when Zakat was

claimed able to eradicate poverty. During that era,

when zakat worker was discharged to distribute the

zakat fund, no one was willing to accept the zakat

proceed – such act was believed to imply no one was

living in poverty since Zakat is only for those who are

in dire need. It can be learned that Zakat can play a

very significant role in fighting poverty and create

socio-economic justice. Zakat system has three main

components – the payer, the administrator and the

recipients.

The role of zakat institution is not only limited to

collect, deposit and distribute the zakat proceed, its

role is much more extensive and comprehensive. In

collection itself, Zakat institution plays a significant

role in determining the amount of collected zakat

fund, with more rigorous efforts in place the potential

of zakat fund can be easily achieved. The new

emergence of the source of income could create a

significant increase in zakat collection especially

dealing with those online money-making platform

which usually generates higher revenue compared to

the traditional source of income. However, such

initiatives can only be achieved if zakat institution is

clear with its objectives – if zakat institution’s

performance indicator relies heavily on the increase

of collected zakat then more effort would be placed in

looking for other potential zakatable wealth else the

institution would adopt “ business as usual” in their

everyday zakat collection initiatives.

In dealing with depositing and distribution of the

collected zakat fund, zakat institution is subjected to

extreme pressure in making sure the distributed fund

able to achieve the objective of zakat. It is important

to note that the impact of zakat distribution is

overwhelming especially when the consideration of

the impact takes into account beyond the zakat

recipients. The effectiveness of zakat fund can result

to increase in confidence among zakat payer and to

some extent would contribute to the economic growth

of the country. Therefore zakat could play such an

important role if it is not treated as peripheral

economic tool but rather should be treated beyond

just a mechanism to redistribute wealth. Clearly, the

potential of zakat system heavily relies on the

ecosystem especially the zakat institution itself.

Hence, zakat institution needs to have a clear path of

where it will bring zakat system in the economy, if

the institution intents to steer zakat system into a more

prominent position in the economy, then the system

will be treated accordingly.

2 METHODOLOGY

This study used to survey in order to gather data from

zakat officers pertaining to this subject. 21 responses

were obtained and this number is considered

sufficient considering the number of zakat officers in

the zakat council.

Majority of the questions of the survey consist of

agree and disagree questions, where the main

objectives of this survey are to get the perception of

the zakat officers and hence getting their view on

certain matters based on agree and disagree, is

considered appropriate.

This research uses quantitative descriptive

analysis method to measure the progress of zakat

council in attaining the objectives of zakat.

3 ANALYSIS AND FINDINGS

With various possible potential of zakat being

discussed, this can only be achieved with how well

the zakat managers willing to push their efforts as

well as having faith in the system of zakat. For every

initiatives being carried out by zakat council, zakat

council must be clear with the objectives and the role

of each assistance being provided to the recipients.

In order to see the effectiveness of every assistance

procided by the zakat council, members of the zakat

council must strongly understand the role of the

assistance in helping the zakat recipients as well as

the expected outcome of each assistance being

provided by the council.

It is imperative for the zakat council to ensure that

every member of their workforce has similar

perception on the role of zakat as it will help to drive

their energy in the same direction. Having everyone

on the same page can steer all their efforts more

efficiently especially during hard times, not all

assistance being tailored by the council will turn out

to be successful, but if everyone has a strong belief

that the zakat assistance programme will achieve its

intended objective.

Where are We Heading?: Case Study of Zakat Institution in Brunei

Figure 1. Perception of the role of Zakat.

However, based on the analysis on the perception

of the role of zakat among zakat officers has shown a

very concerning trend among the zakat officers in

Brunei. Of all the 12 items listed not even the most

basic objectives of zakat gets full one-hundred

percent of agreement, for instance only 81% of zakat

officers believe that zakat can reduce poverty,

reducing poverty can be considered as a basic role of

zakat where most literature discussed that zakat may

not be able to eradicate poverty but can help to reduce

poverty. Although perception of zakat in reducing

poverty gets the highest rate from zakat officers in

Brunei but this figure (81%) is still considered quite

minimal since the basic role of zakat is to help in

reducing poverty. Other items also suffer low rating

from zakat officers indicating that zakat may not be

perceived as an important economic tool.

Zakat can actually contribute to economic growth.

For this reason, zakat council in particular zakat

officers must be aware on how zakat can actually

contributes to economic growth, it is important for the

zakat officers to realise that they are part of the whole

nation economic system, and such would also boost

confidence and commitment among zakat officers if

they learn that their role is very important in the

nation economic system. However, only 62% of the

zakat officers believe that zakat can contributes

towards economic growth and another that shares the

same rating of 62% from zakat officer is the role of

zakat to increase the quality of life.

At least 57% of the zakat officers believe that

Zakat can eradicate poverty although perception on

eradication poverty is quite utopian but there exist

some optimism among zakat officers on the role of

zakat in eradicating poverty, 52% of the zakat officers

believe that zakat can increase recipients’

productivity, this rate can be considered as quite low

especially considering that zakat assistance

programme should be tailored to improve the

productivity of the recipients. Most of the

contemporary assistance programmes offered by

welfare institution such as zakat institution are

dedicated to increase the productivity of the recipients

rather than solely acting as a relief. Cash asssistance

programme is no longer a popular option among zakat

council as it may encourage idleness, therefore most

academic scholars are in the opinion that zakat

assistance programme must be shaped to inculcate

independence and boost recipients productivity.

However assistance programme that aims to boost

recipients productivity usually encouter various

challenges especially with regards to the

sustainability and the success of the programme.

However, the success of such programme can only be

realised if zakat managers are committed and

preserve in pushing all the challenges aside and

remain positive. However, with only 52% of the zakat

officers believe that zakat can increase the

productivity of the recipients might indicate some

concern especially the success of the programme is

leveraged on the commitment and preseverance of the

zakat managers. A proper awareness programme for

zakat managers should be conducted to align the

objectives of programme with the perception of zakat

officers on the role of zakat as a medium to boost

productivity of recipients.

Figure 2: Perception of Zakat administration.

According to the studies done by Yusoff (2011)

Zakat spending and scholl enrolment are important

determinants of economic growth in Malaysia,

implying such results into Brunei’s context, and it is

62%

38%38%

57%

81%

52%

62%

71%

43%

48%

33%

29%

10%

20%

30%

40%

50%

60%

70%

80%

90%

14%

90%

95%

90%

20%

40%

60%

80%

100%

Zakat council

has fully

achieve its

potential

Still have gaps

for

improvement

Need strong

collaboration

with other

organisation

Need more

workfforce

and experise

ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

the country’s vision to see nation of Brunei to be

highly educated and skilled individuals and Zakat

should play its role as well to achieve this vision,

however less than half (43%) of the zakat officers are

in the opinion that zakat can increase knowledge and

skills of zakat recipients. Zakat also have high

potential to be source of social finance such as Qard

al-Hassan, such assistance can help zakat recipients

to start-up their own business where majority of the

recipients would have difficult access to conventional

financing which usually place more restriction as

compared to social finance. It cannot be denied

capital is important factor in contributing to the

success of a business, however with limited

restriction to financing through banks would usually

hamper the intention of zakat recipients to start their

own business. However, if Zakat fund can be used as

alternative to conventional financing, this would

clearly be a good initiatives to promote productivity

and independence, but surprisingly less than half of

the zakat officers believe that zakat can be utilised as

a source of social finance.

Only 38% of the zakat officers believe that zakat

can increase consumption as well as reduce

unemployment. It is very surprising to learn only

38% of zakat officers believe zakat can increase

consumption even though zakat can clearly help to

increase zakat recipients’ consumption, when zakat

recipients received cash assistance it would increase

their income and hence would increase their

purchasing power. Another item that receive similar

rating is the role of zakat in reducing unemployment,

only 38% of zakat officers believe that zakat can help

to reduce unemployment, this proportion is very

worrying to learn when small proportion of zakat

officers are in the opinion that zakat can help to

reduce unemployment. However, zakat assistance

programme should be shaped to inculcate

independence and employment is one of them, so

thererfore any aisstance programme should be shaped

to encourage employment among zakat recipients.

Finally, the last two items received the least rating

from zakat officers, only 33% of zakat officers

believe that zakat can help to achieve Brunei Vision

2035 and only 29% of zakat officers believe zakat

can help to achieve SDG 2030. Clearly, zakat officers

are less optimistic with regards to the role of zakat in

achieveing the national vision 2035 let alone the

global vision – SDG 2030. Therefore a proper

initiatives must be in place to help zakat officers to

have clearer view on how zakat can be steered to

achieve national vision 2035 as well as SDG 2030.

With regards to the zakat administration in

Brunei, this study has found very interesting findings

among zakat officers where only 14% of zakat

officers believe that zakat administration in Brunei

has achieved its full potential, so clearly majority of

the zakat officers are not in the opinion that zakat has

achieved its full potential and this indicates zakat

officers believe that there is so much more to achieve

in zakat administration in Brunei and this can be

reflected with another finding where 90% of zakat

officers believe that there are still gaps for

improvement. It is very pleasing to learn that zakat

officers are not in the state of denial but are more open

with their view on the zakat administration in Brunei.

This also indicate there is an opportunity for other

agencies to work with Zakat council in Brunei such

as training programme for zakat officers as well

collaborating in designing the assistance programme

for zakat recipients. If zakat council is in the opinion

that there is so much more to improve then this also

means that they are willing to learn from other

agencies as well to work together and this can be

proven from the findings out of the survey where 95%

of zakat officers believe zakat council in Brunei needs

strong collaboration with other organization, this also

can help zakat council in Brunei to deal with the issue

of lacking in expertise as well as shortage of

workforce since 90% of the zakat officers believe

they need more workforce and expertise, however

with the current economic situation in Brunei hiring

more workers are not usually welcomed by top

management so therefore a more intensified

collaboration with other agencies sharing pool of

resources including expertise is strongly required.

Having clear vision, mission and objectives for

any organization is extremely crucial as discussed

earlier. For this reason, every organization must

establish its vision, mission and objectives as these

would help the organization to steer itself steadily

with more focus. Establishing vision, mission and

objectives should be coordinated accordingly

including making sure every personnel in the

organization learn and observe the organization’s

vision, mission and objectives without any hesitation.

There is no point having vision, mission and

objectives if they are not fully observed and abided

by each personnel as it would beat the purpose;

therefore Zakat council must understand that it must

have vision, mission and objectives to drive the

council in the right direction and most importantly to

drive every single personnel in the council in the same

and planned direction.

Based on the figure above, there exists some

concern as almost one-quarter of the zakat officers are

not aware of the council vision, mission and

objectives. Such observation is very worrying

Where are We Heading?: Case Study of Zakat Institution in Brunei

especially close to one-quarter of the zakat officers

are not aware whether the council have its vision,

mission and objectives. Therefore top management in

the council must take a proper action to help these

officers to learn the vision, mission and objectives of

the council, some action plan can be put in place

including a workshop or training for dedicated

officers and well-sighted signage of the council

vision, mission and objective in the office. Signange

must be place that can be clearly seen from every

officers office-desk so it helps to remind the officers

of what is the vision, mission and objectives the

council envisage to achieve in years to come.

Similarly all efforts must be measured

accordingly to ensure the council is aware with its

progress in reference to the objectives to be achieved.

Without proper Key Performance Indicator (KPIs) in

place, members of the council will not aware their

position in reference to the objectives to be achieved.

However, there seems to exist some misalignment

among zakat officers where only 57% of zakat

officers opine that Key Performance Indicators

(KPIs) are in place but the remaining do not seem to

aware whether KPIs are in place, however based on

further analysis none of the officers who opined to

perceive KPIs are in place actually understand what

their KPIs are since no single consistent response

when the respondents were inquired to detail out the

KPIs. Therefore, this finding signals a very worrying

scenario where there exist severe misalignments

among zakat officers, every officer must be on the

same page especially with regards to what they

supposed to achieve out of their everyday task, hence

more efforts need to be done especially in driving all

the energy in the same direction to ensure every zakat

officers are working together to achieve the common

objectives.

Surprisingly only 14% opine that Zakat council

involve in Brunei Vision 2035, this proportion is

considered to be very low especially knowing that

Zakat is an important economic tool, if Zakat is

important economic tool it should not be treated as

peripheral especially taking into account its potential

contribution to Brunei Vision 2035. It is unacceptable

to learn that a very small proportion of zakat officers

agree that zakat contributes to Brunei Vision 2035

when in fact Zakat council is part of the government

institution, therefore a proper initiatives must be in

place to make sure the role of zakat council in

achieving Brunei Vision 2035. Without clear view of

where Zakat council is in the system that involves in

driving the country would hamper the potential of

zakat council in contributing towards Brunei Vision

2035. 67% of the zakat officers are in the opinion that

zakat council do not regularly participate in activities

relating to Brunei Vision 2035, despite one of the goal

in Brunei vision 2035 is to achieve sustainable and

dynamic economy where Zakat supposed to play a

very important role especially if zakat reach its fullest

potential.

It is very surprising to learn that only 19% of the

zakat officers are aware of Sustainable Development

Goals 2030 despite zakat council is an important

socio-economic institution of which objectives of

such institution usually reinforces and coincides with

the vision, mission and objectives of Sustainable

development goals, it is considered worrying to learn

such a minimal proportion of zakat officers are aware

of sustainable development goals, proper action must

be taken such as training or awareness programme to

enhance officers’ understanding and awareness of

sustainable development goals as well as to identify

its role in achieving this global agenda. This can be

reflected with only 24% of zakat officers believe

zakat can help to achieve SDG 2030, without doubts

zakat can help in achieving sustainable development

goals given that zakat is managed in the most efficient

and effective way without compromising its main

objectives to serve the first eight recipients of zakat

as prescribed in the Qur’an.

4 CONCLUSION

Clearly, this study has indicated very interesting

findings with regards to the perception of zakat

officers on the role of zakat. Perception of zakat

officers on zakat will shape and contribute towards

the success of achieving zakat objectives, how does

one able to see his project to reach the intended

outcome if he never believes the project will be

successful? One must strongly believe in the

capability of his project to ensure he will do whatever

it takes to see the success of his project as one’s belief

will shape his commitment, perseverance and

positivity. Similarly in the sphere of zakat, zakat

officers are the backbone of zakat management, they

must have the right attitude towards Zakat, they must

strongly believe on the capability of Zakat especially

in contributing towards socio-economic justice as

well as its role in achieving national vision 2035 and

the global agenda 2030. However, based on the

findings of this study, there seems to exists pessimism

among zakat officers on the role of zakat especially in

achieving national vision 2035 and global agenda

2030. If academics and scholars are in the opinion

that zakat has so much potential in achieving socio-

economic justice while the other main stakeholder

ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

that drives this hopes and dreams are not on the same

page then something must be quickly done to ensure

every stakeholders are on the same page. Everyone

can move in the right direction but not necessarily in

the same direction, hence everyone in the system

must understand that they are interrelated, one’s

action will affect others and to see the synergy to be

fully realized all stakeholders must realign their

attitude towards zakat in order to see the success of

zakat.

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Chloe Stirk, 2015, An Act of Faith – Humanitarian

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Hofstrand, D. 2016. Vision and Mission Statements – a

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https://www.extension.iastate.edu/agdm/wholefarm/ht

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Where are We Heading?: Case Study of Zakat Institution in Brunei