Wealth inequalities are mostly driven by a class of investors that were able to accumulate capital in the form of shares. Zakat offers a virtuous mechanism to transfer some that wealth into the most vulnerable part of the society. A new methodology introduced in 2015, provides the wealthiest with a 70% haircut over their charitable contributions on shares. This year, it was adopted by the North American Fiqh Council, the Shariyah Review Bureau and was added in the official calculators of the popular app LaunchGood, Zoya Finance and Wahed Invest. If it continues to grow in influence, it will significantly impact charitable contributions for the most vulnerable, at a time of massive refugee crisis in muslim countries, and for a foreseeable future.
In the attached letter, I show why the methodology is incorrect. I have so far not been able to reach out to the authors or the apps pushing it (my reach is very low). Please consider sharing the open letter as much as you can. And may Allah accept your action as a ceaseless charity.
The Prophet Muhammad (SAW) said: "When a man dies, his deeds come to an end except for three things: Sadaqah Jariyah (ceaseless charity); a knowledge which is beneficial, or a virtuous descendant who prays for him (for the deceased)." (Muslim)
Yakihonne
Zakat on shares - Open Letter to the North American Fiqh Council, Shariyah Review Board and Sh. Joe Bradford
A new methodology to calculate zakat on long term shares has been growing in influence. It argues for a 70% discount on zakat obligations against l...