Islamic Finance

Strategic giving is the next disruption in Islamic philanthropy

| 05 November, 2018 | General
 White Paper Media
Strategic giving is the next disruption in Islamic philanthropy
Photo for illustrative purposes only. A displaced woman receives humanitarian supplies at Basirma refugee camp in Arbil, north of Baghdad, November 9, 2015. REUTERS/azad lashkari

The Muslim world is very generous when it comes to philanthropy but donors need to invest in building community resilience rather than respond to problems as they arise, leading philanthropy and ethical finance experts told Salaam Gateway.

“Our aim is to lead that shift from a spontaneous to a more strategic giving – not just spending our charitable giving on fire-fighting, but actually investing in people and making sure we gradually take them out from a state of dependence,” Tariq Cheema, founder of the World Congress of Muslim Philanthropists (WCMP) and the Global Donors Forum, said during a panel session at the Global Islamic Economy Summit (GIES) last week in Dubai.

WCMP is a global network of affluent individuals, grant-making foundations, and socially responsible corporations that was established 10 years ago to advance accountable giving. The group has long argued that strengthening best practices in the Muslim philanthropic sector must be a priority, with a new view to enhancing social justice.

“We need to shift from faith-based to faith-inspired giving. This means going out and reaching people irrespective of race or faith, and if they are in need and we can help, then we must,” Cheema told Salaam Gateway.

Today, most Muslim giving is used for fire-fighting, either to deal with man-made or natural disasters; or, it is being given out of piety “in a very casual way”, he said.

“We missed the point that we need to make sure these investments are in the people and we have to get maximum social return on investment. It’s all about smart giving,” said Cheema, a Chicago-based physician who turned to philanthropy in 1997.

LONG-TERM RESILIENCE

Besides ensuring the effectiveness of Islamic philanthropy, there is a need to move capital upstream, to the earlier stages of humanitarian operations, according to Kimberly Gire, founder of Global Women Leaders, Strategic Philanthropy, a community of women leaders working to improve the well-being of people in the world’s most neglected crises.

The former banker says financial aid usually comes in too late and that investing early on in communities is the most effective way to make a true social impact. This, she stresses, could move the needle on problems before they become a disaster.

“After the famine threat in 2011, when 250,000 people died because of food scarcity, we learnt that people do respond and very generously, including from the Middle East. But it’s often too late,” said Gire, speaking at the same panel session with Cheema.

According to reports by the United Nations, more than a quarter of a million people died in the Somalia famine between October 2010 and April 2012, about half of whom were children under five.

Deaths resulting from famine are often from disease that hits people when they are at their weakest, noted Gire, adding that if philanthropists invested in the basics of development, like water infrastructure and access to health and agriculture, such disasters would not happen.

“It's not just the urgent humanitarian need of food-dropping and water-trucking. It’s investing in communities and education, especially girls’ communities, which is one of the most resilient forms of investment that you can make with your philanthropic dollars,” Gire told Salaam Gateway.

While the Muslim community will always have to respond to humanitarian crises as they arise, donors need to invest more in long-time resilience through education, food security, skills and livelihoods. “This is how we can make communities resilient to shocks, and that’s where we need to shift the mindset,” said Gire.

REFUGEE-HOSTING COMMUNITIES

The UN refugee agency UNHCR, which takes care of refugees around the world, has been working on opening the dialogue on Islamic philanthropy and social finance as well as zakat initiatives to help refugee-hosting communities.

Earlier this year, the agency launched a digital platform in cooperation with the Abu Dhabi-based Tabah Foundation to enable Muslims to fulfil their zakat obligations by supporting the neediest refugee families in Jordan and Lebanon.

The Shariah-compliant platform enables refugee beneficiaries to receive monthly aid through advanced iris scanning technologies, without having to stand in queues or remember PIN codes.

Significantly, the zakat contributions go directly to the refugees, with no money taken off for administration or overheads.

“In Jordan, we are working with our colleagues and partners including banks and Muslim scholars to support the cash-based intervention programme through zakat directly,” Houssam Chahine, head of private sector partnerships at UNHCR, told Salaam Gateway.

“If you calculate and pay your zakat online, the refugee will receive a text message asking them to collect their zakat donation or the sum they receive every month. They would then go to the ATM, do an iris scan, and receive the donation,” Chahine explained.

According to UNHCR statistics, the Middle East and North Africa region hosts the largest number of refugees, with nearly 40 per cent of the world’s 25.4 million refugees being based here.

As a country, Turkey continues to host the largest number of refugees worldwide, with 3.5 million people, while Lebanon hosts the largest number of refugees relative to its national population, where one in six people is a refugee.

Most disturbing is that developing regions currently host 85 per cent of the world’s refugees, or about 16.9 million people, according to UNHCR estimates.

“Through the zakat programme, we are trying to engage Muslims specifically from this part of the world, so they can be part of solving this problem,” said Chahine.

Several Muslim nations have provided financial support to refugees in the region. For example, the UAE has donated about 3.23 billion Emirati dirhams since the beginning of the Syrian crisis seven years ago, according to Mariam Al Muhairi, Minister of State for Food Security, and Kuwait pledged $1 billion in loans and $1 billion in direct investments earlier this year to help rebuild Iraq.

There is still a need for the public to contribute to supporting refugees and their hosting communities, according to UNHCR's Chahine.

“This is already happening through the Organisation  of Islamic Cooperation (OIC) countries especially from the Gulf states – there’s a lot of support at the governmental level. But we also need to engage the public, talk to individuals to go through technology platforms and choose to give donations to support humanitarian issues,” he added.

TECHNOLOGY

Technology can solve many of the challenges in the Islamic philanthropy space. For instance, blockchain coupled with other solutions could eliminate the need for the middle-person between donors and recipients, according to Rachid Ouaich, co-founder of Conexcap.

The Luxembourg-based group is involved in several initiatives in the Islamic economy space, at its core being the provision to the French market of ethical financial solutions that leverage the power of technologies such as artificial intelligence and blockchain.

“Technology can help match donors and recipients without intermediaries. This is already happening in the investment sector,” said Ouaich.

“We will always need someone to give us advice on who should be receiving help – who is really in need and who is faking that need, for example. But that doesn’t mean our money has to flow through the bank accounts of big institutions.”

One of the biggest issues that technology can solve is the lack of trust and transparency, by allowing real-time donation and enabling donors to track their money, said Ouaich.

Technology can also improve donor outreach because it’s difficult to reach the masses in every part of the world in a conventional way.

“Everything is now global and on social media, and there is more [awareness] about the needs of others,” said Ouaich.

“We will increasingly be able to connect with people who are more in need than the ones who are close to our home. And it will be easier for people to allocate money for situations they care about.”

(Reporting by White Paper Media; Editing by Emmy Abdul Alim emmy.alim@refinitiv.com)

Our Standards: The Thomson Reuters Trust Principles

© SalaamGateway.com 2018 All Rights Reserved

Like 

MORE INTERESTING TOPICS