Paying alms can solve poverty: A big ‘if’

In Ramadhan, Muslims are reminded of their obligation to pay alms to the poor. The Jakarta Post’s Prodita Sabarini looks at the collection and management of alms, which are now regulated by law.

For many years, Indonesian Muslims have channeled their alms through mosques or by giving directly to the needy. But the rise of professionally managed alms agencies is changing the way Muslims help their brothers and sisters in need.

From online bank transfers and monthly direct debits, to alms through premium text messages, alms giving has made a leap from the traditional cash-in-hand distribution to the Web 2.0 era of online transactions.

The consequences of the change are enormous, according to leaders of Islamic charitable organizations in Indonesia. Utilizing the principle of crowd-sourcing funds, these alms organization are brimming with optimistic intent to solve the problem of poverty in Indonesia.

Data from the Central Statistic Agency (BPS) states that 31.9 million people or 13.3 percent of the population in Indonesia are poor, living on under Rp 233,740 (US$24.7) per month.

The National Alms Agency (BAZNAS) last year conducted a joint study with the Bogor Institute of Agriculture’s (IPB) school of economy and management, stating that Indonesia has the potential to collect Rp 217 trillion in zakat (Islamic mandatory alms). This estimate is more than twice the amount of
the national budget allocated by the Finance Ministry for poverty alleviation, which stands at Rp 99.2 trillion this year.

“If we collect Rp 217 trillion of zakat, we can say: that’s it. The problem of poverty can be managed by zakat,” BAZNAS executive director Teten Kustiawan said recently.

There is only one small problem with Teten’s confident contention: a very big “if”.

In reality, zakat collection in Indonesia is less than one percent of the amount that BAZNAS and IPB conjured up. In 2011, the national collection of zakat through BAZNAS, its provincial chapters and all registered private alms foundations was Rp 1.7 trillion, a mere 0.8 percent of the BAZNAS and IPB figure for zakat potential.

This figure excludes zakat collection from 7 of 19 national private alms agencies who failed to send reports to BAZNAS. The data also excludes zakat collected and distributed by mosques and private individuals.

This small percentage of realized zakat against zakat potential is not to say that alms agencies and foundations are not growing, far from it. Between 2002 and 2012, zakat collection through Islamic charities rose by more than 1,000 percent: an average 24 percent increase each year.

Five years ago in 2007, zakat collected by agencies and foundations stood at Rp 770 billion. Money collected by zakat agencies and foundations continues to rise even faster than the growth in the number of zakat foundations, said Teten.

Dompet Dhuafa Republika now collects as much as Rp 200 billion, according to executive director
Ahmad Juwaini. The funds collected have grown from a mere Rp 88 million in 1993, when Dompet Dhuafa, with the support of the Islamic-leaning newspaper Republika, pioneered professional alms management.

The Community Caring Justice Post (PKPU), established in 1999 to answer the social crisis during the sectarian conflict in Poso, managed to raise Rp 3.5 billion in their first round of fundraising. Last year, they collected Rp 80 billion, according to PKPU deputy CEO and head of the Forum Zakat (FOZ) Sri Adi Bramasetia.

Alms agencies have become much more visible, taking an aggressive marketing approach with advertisements in the media. This Ramadhan, the PKPU is running the campaign “Jangan ditahan” (Don’t resist it), playing with the concept of resisting temptation during the fasting month.

“People become curious. What is this ‘don’t resist’ thing? And then they get it — that you shouldn’t just keep your money. You should pay zakat,” Bramasetia said.

While charitable fund managers are certain that zakat money will be more beneficially distributed under their management, skeptics argue that channeling zakat through agencies will only waste zakat intended for the poor, as agencies skim off the money for operational and campaign costs.

Dompet Dhuafa, for example, uses soccer star Bambang Pamungkas in their media campaign. However, according to Islamic law, some 12.5 percent of the donated funds belong to the Amil (zakat collector and manager).

Ahmad’s response is that zakat agencies enable large amounts of funds to be collected and utilized in various aid programs for the poor. Dompet Dhuafa’s health program for the poor includes a free hospital and 34 free polyclinics across the country. Ahmad said that the hospital building and equipment alone costs Rp 60 billion and operational costs are around Rp 20 billion.

“Where will you find a community here willing and able to spend Rp 20 billion for a free hospital? Nobody could afford that. But if Dompet Dhuafa collects the money — not only Rp 20 billion, even Rp 50 billion, we’ll cover it.

“That’s the difference between paying zakat alone and collecting zakat together,” he said.

To manage and ensure accountability of alms agencies, last year the House of Representatives passed a new law on zakat management, replacing the 1999 law. BAZNAS became the official national zakat collector and coordinator of all alms foundations.

This is not the first time the state has become involved in zakat collection. In 1968, Soeharto appointed himself as the national Amil and BAZ Jakarta, which later became BAZIS Jakarta, was established. The self-appointment of Soeharto as Amil, however, did not change the traditional face of zakat. Lacking appropriate social welfare and empowerment programs, people deem zakat management as “a job lacking any prestige”, Ahmad said.

“There was no sense of pride. Zakat was managed on the side, at the end of Ramadhan, and channeled through mosques, then distributed to the poor in the area. That pattern was the norm for decades,” Ahmad said.

As alms agencies grow with clear and effective programs, along with transparent financial reports — most alms agencies publish their audited financial reports on their website; the 2011 law obliges agencies to audit their finances — the charity organizations are gaining people’s trust.

For PKPU, transparency in fund management is not enough. They also have to withstand allegations of partisanship. PKPU was founded by cadres of the Justice Party, which later became the Prosperous Justice Party (PKS).

Bramasetia said in answer allegations of partisanship, PKPU registered with the UN for a special consultative status with the UN Economic and Social Council. One prerequisite for any NGO to be granted consultative status was independence. In 2008, PKPU became the sixth Indonesian organization to receive such status.

Most of the alms agencies have five main program areas: economic empowerment, education, health, disaster response and religious development. Bramasetia said that most of zakat money goes on economic empowerment programs, which include grant money to set up micro-finance co-ops or capacity building programs.

Once, PKPU helped guava farmers transform fresh produce into extracts or puree. “When the harvest season comes, the price of guavas falls, but with our training, farmers are able to sell with added value as well as preserve their harvest in different forms,” he said.

Ahmad of Dompet Dhuafa questions people who give their zakat in the form of cash hand outs, in which people queue, sometimes for hours, to receive a mere Rp 50,000.

“Isn’t that torture? And how long does the food that they give last? How does that help with health and education?

“I say this is an egotistical form of worship. It’s merely ‘I’m happy that I can observe this ritual. The poor are happy to receive my help. He kisses my hand with his lips trembling with prayers for me while his tears flow’,” Ahmad said.

“Our pride is satisfied by that kind of ritual. But is that really what we’re looking for?”

Prodita Sabarini, The Jakarta Post | Reportage | Tue, August 21 2012

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