Islamic Social Entrepreneur Organization of Zakat Management in

Empowerment of Socio-Economic Mustahiq in Indonesia

Tika Widiastuti

, M. Nafik Hadi Ryandhono

, Irham Zaki

, Imron Mawardi

, Wisudanto

and

Taqiyah Dinda Insani

Faculty of Economics and Business, Universitas Airlangga, Airlangga 4-6, Surabaya, Indonesia

Post Graduate School, Airlangga 4-6, Surabaya, Indonesia

Keywords: Social Entrepreneurship, Organization of Zakat Management (OPZ), Empowerment, Zakat.

Abstract: This study aims to develop a model of social entrepreneurship in a national Zakat Management

Organization (OPZ) in zakat management and socio-economic empowerment. By using a descriptive

qualitative approach - case study strategy, it successfully found the right model, in order to maximize the

social economic development by identifying the state so that it can be given proper handling. Zakat, infaq,

and alms funds for productive purposes need to be holistically designed from distribution, coaching and

supervision, to establishing success indicators so as to have a sustainable impact on the socio-economic life

of the mustahiq. Finally, this research will be beneficial for improving the nation's competitiveness through

optimal utilization of zakat.

1 INTRODUCTION

Social entrepreneurship is generally defined as a

business activity with a social purpose (Palesangi,

2012). This does not mean social entrepreneurship

does not require a profit optimization. Profit

(operating profit) obtained will be channeled for the

development of community welfare (Ayob et al,

2013).

Social entrepreneurship in Islam has grown since

the beginning of Islam. In Islam, it is taught that

people are forbidden to accumulate wealth without

thinking of others (read: zakat, infaq, alms, or waqf)

as it is written in Al-Qur’an surah At-Taubah: 103

and 60. Zakat is a very important instrument of

social entrepreneurship in Islam because it is one of

the pillars of Islam.

The management of zakat today is also not

limited to meeting the needs of the mustahiq. But

also with the spirit of empowerment and welfare

goals, many Zakat Management Organizations

(OPZ) are starting to mobilize productive zakat

programs. Productive zakat is defined as zakat in the

form of treasures or zakat funds given to mustahiq

not spent directly for consumption of certain

purposes, but developed and used to assist their

business, so that with effort they can meet the needs

of life continuously (Asnaini, 2008). Thus, the

purpose of productive zakat is the giving of zakat

which can make the recipients produce something

continuously with the treasure of zakat it receives.

The potential of large zakat funds can be used for

productive activities. This will be more optimal if

implemented by the Zakat Management

Organization (OPZ) that has been inaugurated by the

government, because the OPZ both BAZ and LAZ

as a trusted organization for the allocation,

utilization, and distribution of zakat funds, do not

give zakat, provide guidance and training so that the

zakat funds are actually used as working capital so

that the recipient of zakat is earning a decent and

independent income (Saifulloh, 2012).

1.1 Amil Zakat

Qurtubi in Hafidhuddin (2002) states that Al-Amil is

the people assigned (by the priest/government) to

take, write, count, and record the zakat he took from

the muzakki to be given to those who were entitled

to receive it. According to Dimasyqi (2005), the

definition of amil zakat according to the terminology

of fiqh is the people appointed by the imam

(government) to manage the zakat business, which

covers the process of collecting, recording,

distributing, and so forth. The management of zakat

Widiastuti, T., Ryandhono, M., Zaki, I., Mawardi, I., Wisudanto, . and Insani, T.

Islamic Social Entrepreneur Organization of Zakat Management in Empowerment of Socio-Economic Mustahiq in Indonesia.

DOI: 10.5220/0007537600700075

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 70-75

ISBN: 978-989-758-348-3

by zakat management institutions, especially those

having formal legal power, will have several

benefits (Hafidhuddin, 2002), namely:

a) Ensure the certainty and discipline of zakat

payment.

b) Maintain low self-esteem of mustahiq zakat

when faced directly with receiving zakat

from muzakki.

c) Achieve efficiency and effectiveness, as well

as appropriate targets in the use of zakat

property according to the priority scale that

exists in a place.

d) Shows the syiar of Islam in the spirit of

Islamic governance.

1.2 Zakat Institution Performance in

Empowerment of Zakat

Gibson in IZDR (2011) defines performance as “the

declared success rate of the motivation and ability

function”. While Mulyasa in IZDR (2011) defines

performance as “implementation of work,

achievement of work, results of work and

performance”. The performance of zakat institutions

will be seen in the zakat institution’s strategies in

optimizing collection, distribution, and utilization.

Amanah on Law (Act) no. 23 of 2011 on the

Management of Zakat described how in order to

improve the usability and useful results zakat must

be managed in an institutional manner in accordance

with Islamic Shari’a.

IZDR (2011) measures the economic

performance of zakat institutions or the Zakat

Management Organization (OPZ) in several

indicators, namely: first, the existence of criteria and

identification mechanism mustahik. Secondly, the

growth of the mustahik amount empowered by

zakat. Third, the growth of the number of muzakki.

Fourth, innovation of a zakat empowerment

program. Fifth, distribution of zakat distribution

area. Sixth, responsiveness to humanitarian

emergency. Seventh, utilization of zakat for

productive economic activity. And the eighth is the

intensity of utilization of zakat for community

development and empowerment activities.

1.3 Empowerment mustahiq

Empowerment is closely associated with the

function of amil zakat institutions in utilizing zakat.

In the utilization of zakat, it is necessary first to

identify and extract information on the mustahiq so

that the proportion of funds given is in accordance

with the intact. Zakat institutions must provide

transparency reports so that all can be known by the

muzakki and society as a whole.

Empowerment is expected to optimize the

benefits of zakat management. It is as stated by

Qardhawi (2010) that the benefits of zakat for

(beneficiaries of zakat), among others, are to help

meet the necessities of life and it can eliminate the

nature of hate and envy of the rich grubs, and in

aggregate zakat it will have a positive impact on

society because if the zakat can be managed to

economic value, then it will realize the function of

treasure as a means of struggle to uphold the religion

of Allah (jihad fii sabilillah ), and realize the social

economic justice of society in general.

1.4 Social Entrepreneurship

Social entrepreneurship is generally defined as a

business activity with a social purpose (Palesangi,

2012). The definition of a social entrepreneur by

Moore et al. (2010) is someone who provides an

innovative solution to the urgent needs, problems,

and opportunities in society. While Scarborough

(2014) defines a social entrepreneur as one who

mobilizes skills not only for profitable business

activities but also for achieving economic, social and

environmental objectives in order to realize the

welfare of society.

In the development of social entrepreneurship

collaboration is required. Collaboration can be built

through an interaction that rests on the principle of

rearing, the principle of sustainability, and openness.

The collaboration is built into a collaborative

strategy. Collaborative strategies include its

stakeholders, collaborative prerequisites, and steps.

(Nulhaqim, 2011).

1.5 Social Entrepreneurship of Zakat

Institution

Zakat institution as a social institution that has the

main activity of receiving and distributing zakat.

Zakat institutions that have a value of social

entrepreneurship should be able to run business

activities to generate added value, and once business

activities have added value it will be reused to assist

the main activities of the zakat institution.

Business activities can be run by zakat

institutions with the establishment of business units

as a form of real social entrepreneurial activity. A

socially oriented institution is capable of

implementing social entrepreneurship by having

business units. Social institutions have business

activities so as to develop business units whose

Islamic Social Entrepreneur Organization of Zakat Management in Empowerment of Socio-Economic Mustahiq in Indonesia

profits and benefits are dedicated to supporting its

social services (Juwaini, 2011).

2 RESEARCH METHOD

2.1 Research Approach

This research takes a qualitative approach.

According to Bogdan and Taylor in Moleong (2005)

a qualitative methodology is a research procedure

that produces descriptive data in the form of written

or oral words of people and observable behavior.

This study uses a qualitative approach because it

will examine the practice of social entrepreneurship

in zakat management organizations in Indonesia to

produce data that is non-statistical, but a written

narrative.

2.2 Research Scope

The scope of this research is to include two national

Zakat Management Organizations (OPZ), each

consisting of a single representation of the OPZ

Government and the community. OPZ from the

government is the National Amil Zakat Agency

(BAZNAS), while the OPZ coming from the

community is Al Azhar Peduli Umat.

2.3 Sources and Data Types

The type of data used in this study is primary and

secondary data. Primary data is obtained from

individuals, such as the results of interviews,

documentation, and direct observation from the field

so that the data are many tangible actions of the

object of research. Secondary data in research

obtained by looking for information in the form of

data related to research which is being done, both

data are related to zakat literature, social

entrepreneurship and empowerment and

documentation data from Al Azhar Peduli Umat and

BAZNAS institution.

2.4 Data Collection Process

The data collection techniques that the researcher

uses in this study include:

a) Observation method, observation is a

systematic observation and recitation of the

phenomena investigated (Hadi, 1991).

b) FGD (Focus Group Discussion) is the method

of data collection or research to understand the

attitudes and behavior of audiences. Usually

consisting of 6-12 people who are

simultaneously collected, interviewed with

guidance by moderators (Kriyantono, 2006).

In-depth interviews, in-depth interview w aims to

collect information about the complex, most of

which contains opinions, attitudes, and personal

experience (Basuki, 2006). In-depth interview

method is done on the management of zakat

institution Al Azhar Peduli Umat and Yatim

Mandiri.

2.5 Data Analysis Techniques

Researchers use a descriptive research model that

aims to make in-depth study a systematic, factual,

and accurate description of the phenomenon or the

relationship between the phenomena studied. The

phenomenon in question is all activities related to

the empowerment mustahiq with a social

entrepreneurship approach run by Al Azhar Peduli

Umat and Yatim Mandiri.

3 RESULTS AND DISCUSSION

3.1 Description of Research Results

3.1.1 Informant 1

The first informant is director Executor of Yatim

Mandiri. Yatim Mandiri is one of the zakat amil

institutions in Indonesia concerned with empowering

orphaned poor children through the management of

zakat funds, infaq, shadaqah, and wakaf (ZISWAF).

Yatim Mandiri's flagship program consists of three

sectors: education, health, and economic

empowerment. Yatim Mandiri carries out a model of

social entrepreneurship through the qardhul hasan

scheme of providing interest-free loans to MEC's

graduate children to start entrepreneurship. The

empowerment model of Yatim Mandiri is as

follows:

Figure 1: Caption Model of Yayasan Mandiri

Empowerment

ICPS 2018 - 2nd International Conference Postgraduate School

3.1.2 Informant 2

The second informant is Head of Representative of

Al Azhar Peduli Ummat East Java. The

empowerment strategy of Al Azhar is to approach

personally. Al Azhar has a DASAMAS program

(Da’i Sahabat Masyarakat) that provides guidance

on the potential that exists in the community to be

developed. Then, it will set up a local institution

called KSM (Kelompok Swadaya Masyarakat).

Empowerment programs of Al Azhar are poverty

alleviation and empowerment of rural communities

through Zakat Pride and Indonesia Gemilang

programs; Alleviation of unemployment of

productive age through Rumah Gemilang Indonesia

(RGI); Economic empowerment, infrastructure, and

environmental conservation consisting of infralink

and million power programs. Improving the living

conditions of orphans and dhuafa through my heart

for orphans program; disaster management and

volunteer network through the FORMULA program.

3.1.3 Informant 3

BAZNAS explained some programs from BAZNAS

East Java; one of them is Jatim Makmur, the

BAZNAS program that aims to improve the

economy of mustahiq. BAZNAS distributes

productive activities for mustahiq businesses where

those who run the business are mustahiq themselves.

While the amil institution acts only as a guide.

YDSF describes the form of social

entrepreneurship that YDSF is currently undertaking

by establishing a Community Business Group

(KUM) whose funding comes from infaq and alms

funds and YDSF is a companion and coach of the

business group.

Yatim Mandiri explain their focus on the

handling of poor orphans. The two mustahiq that

were targeted by Yatim Mandiri were orphans and

mothers of orphans. The coaching process conducted

is boarding education, then over 90% of the targeted

children are self-sufficient.

Nurul Hayat explained the importance of becoming

an independent community institution, by having its

own business units, and as for the economic

empowerment of mustahiq.

Rumah Zakat has empowerment programs

related to socio-economics in productive agriculture,

and livestock production.

Dr. Imron Mawardi, SP., M.Sc. explains that not

all can be directed to become entrepreneurs. For

those who do not have skills and entrepreneurial

spirit, they can be given consumptive zakat.

Characteristics that can be empowered generally are

those who have good social activities and aged 22-

45 years.

Different is Al-Azhar, Sigit Iko Sugon my dosel

director The executive LAZ AL-Azhar explains that

amil zakat institutions are not allowed to establish

business units using zakat funds, infaq, and alms.

Social entrepreneurship is an attempt to alleviate

poverty through an entrepreneurial approach.

The form of social entrepreneurship at LAZ is

not by setting up a business unit for social purposes

but how LAZ provides solutions to alleviate poverty

through entrepreneurship. The form of economic

empowerment program by LAZ aims to create

income, convert income into more economic value,

and recover income.

3.2 Model of Social Entrepreneurship

Zakat Institution

Figure 2: Model of Social Entrepreneurship Zakat

Institution.

One of the redistribution instruments that can be

used to reduce poverty is zakat (Fitriani, 2018).

Then, social-entrepreneurship run by zakat

management organizations should be conducted with

different units. Zakat management organizations are

not allowed to conduct business activities, so there

needs to be another unit that handles entrepreneurial

activities established by zakat institutions. The

model of social entrepreneurship run by business

units with the capital of institutional money and not

derived from zakat funds is used to conduct business

activities so as to generate profits.

A socially oriented institution is capable of

implementing social entrepreneurship by having

business units. Social institutions have business

activities so as to develop business units whose

Islamic Social Entrepreneur Organization of Zakat Management in Empowerment of Socio-Economic Mustahiq in Indonesia

profits and benefits are dedicated to supporting its

social services. A zakat institution is a social

oriented institution able to run social

entrepreneurship by having the form of business

units. The presence of business units is an

elaboration of the value set forth in the vision and

mission held firmly to be run by zakat institutions.

Each zakat institution has the vision to make the

ummah independent and build the ummah. In

addition, this will shape an entrepreneurial climate

that is good for the environment (Gross and

Campbell, 2015).

The results of the business units run by zakat

institutions are able to sustain all the required

operational funds. The concept of independence

forces them to maximize the business unit to

generate profit. Maximizing the profit earned means

that it will increase the funds that can be used for the

operational of zakat institutions. The value of an

independent institution for zakat becomes the main

input to run social entrepreneurship at zakat

institutions as a social institution with a form of

running a business unit first then to run social

activity. Business activities are undertaken by zakat

institutions so that profits will be able to sustain the

social activities run by zakat institutions. While

zakat funds continue to be used in accordance with

Islamic rules so that zakat funds can have a positive

impact on poverty reduction, enterprise development

and economic empowerment as confirmed by Raimi,

et al. (2014). However, this must be accompanied by

zakat institutions so that empowerment can run

optimally, both in terms of capital, courses or

training, and knowledge (Muhamat, et al., 2013).

4 CONCLUSION AND

RECOMMENDATIONS

The social entrepreneurship model of LAZ is

divided into several phases. The first phase is LAZ

directly or through its representative plunge directly

into the mustahiq to know its economic potential to

be used as a source of livelihood for mustahiq. The

second phase is to form a community business group

to start an entrepreneurial activity in which the

group is expected to become the forerunner of the

establishment of a cooperative that can support the

mustahiq economy. The third phase is LAZ acting as

the coach and escort of the business group. LAZ

provides mentoring ranging from production

management, financial management to product

marketing. LAZ's role is only as a companion, while

business activities are done directly by mustahiq.

The fourth phase is if the business is undertaken by

mustahiq well developed, then LAZ will release

assistance to the business so that mustahiq can be

more independent.

The advice given is that OPZ first identifies the

position and circumstances in order to find the

potential and provide action or appropriate treatment

in order to make socio-economic empowerment so

that later it can be independent or even transformed

into muzakki. In addition, OPZ can work with

professional institutions or academics to maximize

potential to pioneer and pave the way for their

business development. The distribution of zakat,

infaq, and alms funds for productive matters needs

to be holistically designed from distribution,

coaching, supervision, to establishing success

indicators so as to have a sustainable impact on the

socio-economic life of the community.

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Islamic Social Entrepreneur Organization of Zakat Management in Empowerment of Socio-Economic Mustahiq in Indonesia