ZAKAT POLICY

The purpose of this policy is to:

• Ensure Zakat contributions are allocated to eligible beneficiaries and charitable purposes.

• Respect donor intent and maintain appropriate financial controls.

• Provide clear guidance for the administration and distribution of Zakat funds.

• Promote transparency, accountability, and compliance with applicable U.S. nonprofit regulations.

This policy applies to all contributions explicitly designated as Zakat and received, managed, or distributed by ISF. Zakat funds may support ISF's own charitable programs, approved fiscally sponsored projects, and grants to other charitable organizations, provided that the intended beneficiaries and use of funds meet the applicable Zakat eligibility requirements.

All Zakat contributions shall be treated as restricted charitable funds and managed in accordance with this policy.

Zakat is an obligatory form of charitable giving in Islam, intended to support individuals and communities experiencing financial hardship and other qualifying circumstances.

The Qur'an identifies eight categories of eligible Zakat recipients (9:60):

1. Al-Fuqara: Individuals experiencing poverty.

2. Al-Masakin: Individuals in need who lack sufficient resources to meet essential living expenses.

3. Al-Amilina Alayha: Those responsible for the collection, administration, and distribution of Zakat.

4. Al-Mu'allafatu Qulubuhum: Those whose hearts are to be reconciled.

5. Fir-Riqab: Individuals seeking freedom from captivity or bondage.

6. Al-Gharimin: Individuals burdened by qualifying debts.

7. Fi Sabilillah: Those supported in the cause of Allah, subject to applicable scholarly interpretations.

8. Ibn Al-Sabil: Stranded travelers who lack access to necessary resources.

ISF will prioritize Zakat assistance for individuals experiencing poverty, financial hardship, displacement, and other qualifying circumstances.

Each Zakat-funded project or grant must document the applicable eligibility category and demonstrate how the intended beneficiaries qualify. Where eligibility is uncertain, ISF shall seek guidance from qualified Islamic scholars before allocating the funds.

Zakat contributions may support programs and initiatives providing assistance to eligible beneficiaries, including:

• Education: Tuition assistance, scholarships, educational materials, and essential support for students experiencing financial hardship.

• Healthcare: Essential medical treatment, medications, and healthcare assistance.

• Emergency and Humanitarian Relief: Food, temporary shelter, basic supplies, and emergency financial assistance.

• Food Security: Food distributions, nutritional assistance, and support for households experiencing food insecurity.

• Orphan and Vulnerable Child Support: Food, education, healthcare, and essential living assistance.

• Livelihood and Economic Assistance: Support that helps eligible individuals and households achieve greater financial stability.

• Water, Sanitation, and Hygiene: Assistance addressing essential water and sanitation needs.

Eligibility is determined by the circumstances of the beneficiaries and the intended use of funds, not solely by the program's classification. All allocations must align with one or more recognized Zakat recipient categories.

ISF shall clearly identify contributions designated as Zakat and maintain appropriate records of donor restrictions and intended purposes.

The following principles apply:

• Zakat contributions shall be recorded and tracked separately from unrestricted charitable funds.

• Donor designations and restrictions shall be respected throughout the allocation and distribution process.

• Funds shall only be allocated to projects and beneficiaries that meet established Zakat eligibility criteria.

• Zakat funds shall be distributed as promptly as practicable, subject to appropriate verification and operational requirements.

• Maintain appropriate accounting records demonstrating the receipt, allocation, and expenditure of Zakat contributions.

Administrative and indirect costs charged to Zakat funds shall not exceed 10% of Zakat contributions in aggregate.

Eligible costs may include reasonable expenses directly associated with the collection, management, verification, distribution, and monitoring of Zakat funds, subject to applicable Islamic principles.

Any proposed administrative or indirect costs exceeding this threshold must be explicitly approved by the donor and confirmed to be permissible under applicable Zakat principles. Otherwise, such excess costs must be covered through non-Zakat funds.

ISF may allocate Zakat contributions through its own programs, approved fiscally sponsored projects, or grants to other charitable organizations, provided that the funds are used exclusively for eligible Zakat purposes.

Before approving a Zakat-funded grant or allocation, ISF shall:

• Verify that the proposed activities and intended beneficiaries meet the applicable Zakat eligibility criteria.

• Document the eligible Zakat category and intended use of funds.

• Confirm that the receiving organization or sponsored project understands and agrees to the applicable restrictions.

• Establish appropriate reporting and documentation requirements to demonstrate the use of funds.

Receiving organizations and fiscally sponsored projects must use Zakat contributions exclusively for their approved purposes and provide reasonable documentation of expenditures and activities.

ISF retains responsibility for oversight of Zakat contributions and will take reasonable steps to verify that funds reach eligible beneficiaries or are applied to permissible Zakat expenses. Any administrative or fiscal sponsorship fees charged to Zakat funds must comply with the limitations established in this policy.

ISF is committed to maintaining transparent and accountable financial management of Zakat contributions.

The Foundation shall maintain:

• Clear internal authorization and review procedures for Zakat allocations.

• Documentation demonstrating Zakat eligibility for each supported project or grant.

• Separate financial tracking of Zakat income and expenditures.

• Appropriate records of grants, distributions, and partner expenditures.

• Regular internal review and audit readiness.

Zakat allocations will be reviewed and approved through ISF's established internal authorization procedures.

When Zakat contributions cannot be used for their originally intended purpose, ISF shall take reasonable steps to respect donor intent and maintain compliance with applicable Zakat principles and nonprofit regulations.

Depending on the circumstances, available options may include:

Consulting the donor regarding an alternative eligible project or use.

Temporarily holding the funds until an appropriate eligible use becomes available.

Reallocating funds to a comparable eligible project with donor authorization, where required.

Declining or refunding the contribution when appropriate and legally permissible.

Zakat contributions shall not be redirected to unrestricted organizational expenses or ineligible charitable activities.

ISF shall maintain records sufficient to demonstrate the appropriate management and distribution of Zakat funds. Reporting may include financial summaries, program updates, beneficiary information, and descriptions of the assistance provided.

ISF shall make reasonable efforts to provide donors with clear information regarding the use and impact of their Zakat contributions while respecting beneficiary privacy and confidentiality.

This policy will be reviewed every two years, or sooner if required to reflect evolving scholarly guidance, regulatory requirements, and operational best practices. Any amendments will be subject to ISF's established internal approval procedures.

For questions regarding this policy, please contact Intuitive Solutions Foundation through the contact information provided on our website.