Bi-smillah al-hamdu li-llahi wa-s-salatu wa-s-salamu `ala rasuli llahi wa `ala alihi wa-sahbihi wa-man tabi`ahu bi-ihsan ila yawmi d-din ama ba`du
1. Q: Does the Harvard Islamic Society (HIS) have to pay zakat on the donations that it receives and deposits in its bank account?
A: Neither the Harvard Islamic Society (i.e. the organization), its officers or any individual of whom I am aware is required to pay zakat al-mal on money that is donated to HIS and kept by HIS in its bank account, even if this money exceeds the zakat exemption limit (nisab) and remains in the possession of HIS for more than an Islamic lunar year (hawl).
Note: When donations are given without a specific restriction (an example of a specific restriction would be "use this money for the Mission Hill tutoring program"), then I do not know of anything in the shari`a that prevents HIS officers in any given year from spending such money in sadaqa (such as by feeding poor families in the local area during Ramadan) as they see fit. What we expect from our Lord (glorified and exalted is He) is that doing so would be accepted by Him as a good deed from the officers as well as the original donors. Allah knows best.
2. Q: Can the Harvard Islamic Society (HIS) collect zakat?
A: HIS may not accept zakat al-mal and use it for its own general activities. Neither HIS members (as members of HIS per se) nor its general activities are proper recipients of zakat. Conceivably, HIS could help members of the Harvard Muslim community pay zakat by announcing that it will distribute zakat on its behalf, collecting zakat, segregating these funds from its other funds and then either a) spending them on proper zakat recipients (such as local poor [faqir] or indigent [miskin] Muslims) or b) transferring the funds to trusted zakat-distributing entities in the area. HIS has done the latter in the recent past.
Advice [Nasiha]: However, I strongly suggest that HIS not collect zakat (scenario b above) at all however, since managing zakat funds is a weighty thing and there are more competent zakat distributors in the area. Allah knows best.
The needy slave of Allah,
Taha bin Hasan Abdul-Basser
October 25, 2006