Zakat (“charity”) is a cornerstone of the Islamic faith. It is the obligatory, annual tax on an adult Muslim’s wealth that is dedicated to helping the poor and needy. With the world’s largest Muslim popu;ation, Indonesia’s potential zakat funds for social amelioration was estimated in 2015 at around 30 billion US dollars. Sadly, only ten percent of this amount was actually collected — due to weak zakat collection and management, and people’s misgivings about the zakat system’s lack of transparency, accountability, and impact on the poor.
Dompet Dhuafa (DD) or “Wallet of the Poor” was organized as a registered charity organization by newspaper editor Parni Hadi and his colleagues after the success of Republika’s modest zakat collection campaign. DD sought to transform traditional zakat philanthropy from simple alms-giving to real empowerment—move from being dependent alms “recipients” towards becoming wealth creators, and eventually alms “contributors” themselves.
DD’s zakat funds finance social development projects that build self-reliance among the poor — both Muslims and non-Muslims — through programs of economic assistance, health services, education, and diverse other activities. These programs include support for small and medium enterprises, preferential loans to the poor, and technical assistance that strengthens hundreds of microfinance groups. In health and education, DD has given the poor free access to quality health care, financial support for high school and university attendance, vocational and entrepreneurial training. Additionally, DD runs social enterprises that have multiplied its resource base and widened the arena for building self-reliant communities.
From its creation, DD’s leaders have squarely addressed the prevailing lack of credibility and impact of the country’s zakat institutions — scrupulously practicing transparency and full accountability in its financial and governance systems; maintaining professional standards in their zakat collection; carefully targeting those in greatest need; and facilitating giving procedures from Muslims within and beyond Indonesia. Going even further, DD generously shares its management expertise by training other zakat collection organizations to modernize their operations and professionalize the work of their zakat managers.
Today, DD is Indonesia’s largest philanthropic organization, in terms of donations: it collected total zakat of 20 million US dollars in 2015 alone. Present widely in Indonesia and five foreign countries, DD has reached 13 million beneficiaries, with an estimated 40 percent reduction in poverty. Enjoying a widespread public trust, DD has created a successful, inspiring model of faith-based development not only for Indonesia but also for other nations and religions.