By Abed Ayoub
With Ramadan upon us, Muslims worldwide are counting their wealth. Men and women are tabulating their valuables and calculating their sources of family income and savings.
In essence, it’s the Islamic tax season, but Muslims willingly pay these dues as a means for financial and spiritual purification, feelings that come from knowing that they have fulfilled a requirement of their religion in providing for impoverished people worldwide. Many Muslims choose to pay this amount during the Islamic holy month of Ramadan for increased spiritual benefit.
This annual, obligatory charity – zakah – is one of Islam’s pillars of faith. It is a set percentage of an individual/family’s annual income and savings, and is incumbent upon only those who can afford to pay it. Zakah is also meant to benefit people of all faiths as it is to be distributed to anyone living in poverty.
Like other areas of life, how to protect one’s financial health is outlined in Islam through a set of prescribed behaviors that prevent and treat ailments. Zakah is just one example of these safeguards as it helps promote the fair distribution and circulation of wealth in society.
Many experts now agree that in light of our current economic crisis, Islam’s straightforward and transparent financial principals – where risk and reward are shared — are a viable option for anyone looking for a more ethical approach to finance.
Firstly, Islam emphasizes moderation in expenditure. In the Holy Quran, it states, “The faithful servants of the Beneficent are [...] those who, when they spend, are not extravagant and not miserly, but hold a just [balance] between those [extremes].” (The Holy Quran 25:67)
It also encourages leniency in financial transactions. Prophet Muhammad said, “Allah’s (God) mercy descends on a man who is lenient [easy to deal with, gracious] when he sells, lenient when he buys, lenient when he pays, and lenient when he receives.”
Another preventative measure from incurring financial crisis is Islam’s prohibition of usury. Usury permits a lender to take advantage of the financial needs of a business, expecting interest without regard to the profit or loss incurred by the borrower. Instead, Islam mandates that a loan should either be interest-free or an investment that makes a profit only if and when the business makes a profit.
Muslims are warned against incurring unnecessary debt and are strongly encouraged to pay their debts fully and in a timely manner. In addition, debtors who forgive debts are revered, and Muslims are encouraged to help others’ pay their debts. “If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if you remit it by way of charity, that is best for you if you only knew.” (The Holy Quran 2:280)
Islam also aims to minimize disputes, confusion and fraud in business transactions. For this reason, specific categories of transactions are not allowed in Islam. These include selling a product that doesn’t exist yet (although a deposit for a future sale is acceptable), selling a product that is undefined or not understood by the buyer or seller, selling based on false rumor, and selling what one does not own or cannot deliver.
People and civic institutions play an important role in alleviating the difficulties and poverty that arise. At Islamic Relief USA, as a relief and development organization, we take this responsibility very seriously and strive to apply Islamic principles to the highest degree. We strive to keep our administrative costs under control in order to maximize our resources for those we serve. We also provide publicly accessible information on IR USA’s programs, management and policies on websites like GuideStar, to maintain fiscal transparency and organizational efficiency.
It is for this reason that Charity Navigator, the leading charity evaluator in the United States, has recognized Islamic Relief USA with its highest rating of “four stars” for seven consecutive years. It is also for this reason many American Muslims will turn to Islamic Relief USA this Ramadan to distribute their zakah in the most effective manner here in the United States and abroad.
To learn more about Islamic Relief USA and its programs, please visit: www.IslamicReliefUSA.org
Abed Ayoub is CEO of Islamic Relief USA.