Funding of Muslim Organisations

By Bashir Nuckchady

There has been a rapid proliferation or mushrooming of social organizations within our society. This phenomenon often occurs in response to various social or economic needs and trends. While these organizations lead to increased diversity of approaches and solutions to societal challenges, it also poses challenges such as competition for resources, fragmentation of efforts, and duplication of services. The escalating number of social organizations these days, which deals with money is unparalleled; from funeral services, to Zakaat collecting institutions, from Hajj & Umrah organisers to Qurbani services. Competitions are fierce. Thousands of Millions of rupees are involved. Effective coordination and collaboration among these organizations are essential for maximizing their collective impact.

Yet, effective financial control within such social organizations will not only ensure prudent use of resources but also will enhance organizational credibility, trust, and long-term sustainability. It enables organizations to fulfill their mission effectively while maintaining the confidence of stakeholders and the public.

Many social organizations undergo external audits conducted by independent auditors to assess the accuracy and integrity of their financial statements. These regular, audits provide assurance to stakeholders and donors regarding the organization’s financial management practices and internal controls.

Transparency and integrity must be the hallmark of all Islamic Trusts and Muslim social Organisations. They can learn from the corporate world, as corporate leaders also demonstrate integrity. The Muslim community has hundreds of registered Trusts and Social Organisations with budget running into millions of rupees. The local and few overseas communities are financing them through donations, Zakaat and other funds.

Unfortunately, many of these are inflicted with low morale, stagnancy and lack of trust.  Mismanagement of funds in these Muslim organizations can be deeply concerning and damaging both ethically and legally.

Donors and members have the right to know how funds are being utilized. Religious organizations often rely on the trust and goodwill of their members and supporters. Misusing funds violates that trust and can damage the reputation and integrity of the organization. It is nonetheless, advisable to establish strong internal controls and oversight mechanisms is crucial to prevent mismanagement. This includes having clear financial policies, regular audits, and separation of financial duties to minimize the risk of fraud or misuse. Furthermore, addressing mismanagement of funds requires a commitment to transparency, adherence to legal standards, and a strong ethical framework. The community relies on them, heavily for social aids, healthcare and education. The performance of these Social and Trust Organisations will decide the future of our community.

To achieve the objective of uplifting the community, these organisations must have the right spirit and trust where members can express their highest qualities and values at the organisation level. When people are in touch with their spirit and are encouraged to express it, the organisations become a thriving community infused with a commitment to quality, enthusiasm, honesty, respect, creativity, integrity, openness, compassion and more importantly proper management of funds.

Whereas, mismanagement of funds in a social organization can have serious consequences. Donors, members, and the public expect social organizations to act ethically and responsibly with their contributions. Mismanagement undermines this trust, potentially leading to a loss of donors and supporters.

Mismanagement often causes internal strife among board members, staff, and volunteers. It can lead to divisions within the organization and hinder teamwork and morale. Establishing robust financial controls and oversight mechanisms is crucial. Regular audits, transparent financial reporting, and clear policies on fund use help prevent and detect mismanagement early on. Addressing financial mismanagement promptly is essential to protect the organization’s mission, reputation, and legal and moral standard.

So, lost trust of the financiers and the community can be gained by promoting integrity through transparency. Another factor which is going against the Muslim organisations is the culture of back-biting and gossip. It is so rampant that it kills the very spirit of these organisations. We had witnessed lately one Muslim organisation making false accusation against another one for over-expenditure and treachery. We are living many such trauma on the platform of social media in respect of Muslim Trusts and Social Organisations. It is no wonder that if such allegations continue, more and more Muslim Social Organisations will find it difficult to raise fund for their future projects as the donors will have no longer faith in their capability.

Muslims cannot afford to see these social organisations fail or stagnate. The world scenario is changing at a rapid pace. We have to keep pace with it. The community needs to debate on how to achieve excellence in the functioning and growth of these social organisations.