Muslim American giving aimed at poor totaled $1.8 billion last year, study shows

Muslim Americans gave $1.8 billion last year to meet their religious obligation to help the poor, according to a new study by the Muslim Philanthropy Initiative at the Indiana University Lilly Family School of Philanthropy.

The study counted only giving related to the religious principle known as zakat, which generally dictates that Muslims are expected give at least 2.5 percent of their wealth annually to help the poor, with some exceptions.

The largest portion of zakat, 25.3 percent, was disbursed to international nonprofits, according to the study. Zakat also can be directed to governments, which came in second at 21.7 percent, followed by domestic nonprofits at 18.3 percent.

In addition to zakat, Muslims engage in other forms of charity known as sadaqah, which can go to causes other than helping the poor. The Indiana University study examined only zakat giving. A previous study released last year by the university found that Muslims in the United States gave an estimated $4.3 billion to charity in 2020.

Sharif Aly, CEO of Islamic Relief USA, which was one of the sponsors of the study, said his organization received about $135 million in total cash giving last year. Of that amount, $40 million was given by donors to meet their zakat obligations, up from $35 million the previous year.

Aly said most of the increase in giving at his organization came from new donors rather than existing donors giving more. He noted that his organization’s advertising on social media platforms like Facebook and Instagram has been particularly effective at bringing in new donors.

Aly said that so far this year giving appears to be increasing, although that picture will be much clearer in a few weeks. Muslims are in the middle of observing Ramadan, which ends May 1. Aly noted that the last 10 days of Ramadan are “a particularly special time for giving.”

Donor-advised funds

Muhi Khwaja, co-founder of the American Muslim Community Foundation, said it is important to note that “the Muslim community gives to the broader American society”, not just causes that benefit Muslims.

Khwaja said that many of his community foundation’s donors use donor-advised fund accounts that the organization manages. To be considered zakat giving, the funds must be disbursed from those accounts to working charities within one year. Money sitting in those accounts cannot be invested in companies that profit from weapons, alcohol, tobacco or pornography, Khwaja said.

“Many families use DAFs where they can invest in ethically responsible and religiously approved stocks and investments,” he said.

The study was conducted January 25 through February 15, with 2,010 adult respondents, including 1,006 Muslim respondents. The margin of error for the entire sample is plus or minus 3.7 percentage points. Responses about zakat came only from the Muslim portion of the sample.

The study also found:

• Muslim American households donated an average of $2,070 of zakat funds.
• The average zakat giving by Caucasian Muslims was $3,732; by Asian Muslims, $1,089, by Arab Muslims, $569 and by African American Muslims, $420.
• Men gave an average of $3,313, compared with $471 for women.
• People ages 40 to 49 gave an average of $2,560, the most of any group, followed by those ages 18 to 29 ($2,298). People ages 50 to 54 age gave the least on average, $474.

– Dan Parks joined the Chronicle of Philanthropy in 2014. He previously was managing editor of Bloomberg Government. He also worked as a reporter and editor at the Congressional Quarterly. This article appeared first in the Chronicle of Philanthropy at www.philanthropy.com.