Crowdfunding is
the practice of funding a project or venture by raising small amounts
of money from a large number of people, typically via the Internet. [The
SAGE Encyclopedia of the Internet, 2018]
Crowdfunding
represents a great tool of financial inclusion as well as an important
support for families and small enterprises. From starting at the bottom,
to creating a worthwhile project, to sharing and limiting risk, this is
where crowdfunding and Islamic finance come together.
But
what if I told you that the very concept of crowdfunding can be
observed in the life of Prophet Muhammad ﷺ himself nearly 1400 years
ago.
Crowdfunding in Madinah
Salman
al-Farisi, a very prominent companion of Prophet Muhammad ﷺ is perhaps
most famously known for his ingenious plan during the Battle of Khandaq
to outsmart the 10,000 strong army of fighting against Madinah by using a
technique in warfare not known by the Arabs at that time.
Born
into a Persian family Zoroastrians, Salman’s journey across Arabia in
the search of truth is stunning. Imam Bukhari narrates that he was sold
as a slave by one master to another for more than ten times (i.e between
13 and 19) till he was finally sold to the tribe of Banu Qurayza in
Madinah. He was kept busy with the work of a slave, until he had missed
attending Badr and Uhud with the Messenger of Allah ﷺ.
Narrating
his own story, Salman said: Then the Messenger of Allah ﷺ said to me:
“Draw up a contract of manumission, O Salman.” So I draw up a contract
of manumission with my master in return for three hundred palm trees
which I would plant for him, and forty uqiyahs.
The Messenger of Allah ﷺ said to his companions: “Help your brother.”
So they helped me with the palm trees, one man gave thirty small trees
and another gave twenty, and another gave fifteen, and another gave ten,
i.e., each man gave according to what he had, until they had collected
three hundred small trees for me.
Then
the Messenger of Allah ﷺ said to me: “Go, O Salman, and dig the holes
where they are to be planted. When you have finished, come to me and I
will plant them with my own hand.” So I dug the holes for them, and my companions helped me,
then when I had finished, I came to him and told him. The Messenger of
Allah ﷺ came out with me and we started to bring the trees close and the
Messenger of Allah ﷺ planted them with his own hand. By the One in
Whose hand is the soul of Salman, not one single tree among them died.
So
I had paid off the trees but there still remained the money. A piece of
gold the size of an egg was brought to the Messenger of Allah ﷺ from
one of his campaigns. He said: “What happened to the Persian who had a
contract of manumission?” I was summoned to him and he said: “Take this and pay off what you owe, O Salman.”
I said: How could this pay off everything I owe, O Messenger of Allah?
He said: “Take it, and Allah will help you to pay off what you owe.” So I
took it and weighed it for them, and by the One in Whose hand is the
soul of Salman, it was forty uqiyahs, so I paid them their dues and I
was set free. I was present with the Messenger of Allah ﷺ at al-Khandaq,
and after that I did not miss any major event with him. [Musnad Imam
Ahmad (5/441)]
Passive VS Active Charity
A
very important point to be highlighted is that it wasn’t passive
charity or participation on behalf of the donors but active and dynamic
participation. The donors knew exactly where and how their money or
donation was going to and who exactly was benefiting from it. Also,
there was trust in the decision of the person who had identified this
‘campaign’ for the people to come together to crowdfund for. Sadly
today, many crowdfunding platforms and charities are plagued with
mismanagement of funds and corruption because of which people have lost
trust or at least look at such efforts with a suspicious eye.
From
the story of the freedom of Salman al-Farisi we learn how the Prophet ﷺ
built Madinah as a society and instilled brotherhood among the sahaba.
The Prophet ﷺ not only asked the sahaba to help their brother, but they
also had to put in the effort of digging out the donated trees from
their lands and digging a hole to transfer-plant it in the new location
too.
From
the story of the freedom of Salman al-Farisi we learn how the Prophet ﷺ
built Madinah as a society and instilled brotherhood among the sahaba.
The Prophet ﷺ not only asked the sahaba to help their brother, but they
also had to put in the effort of digging out the donated trees from
their lands and digging a hole to transfer-plant it in the new location
too.
It wasn’t a detached donation but rather an attached investment
Donating
is just one thing, but actually volunteering and taking the charity to
the people dignifies the deed. The Master of the Children of Adam, the
Vessel of Revelation, the Imam of the Prophets of Allah ﷺ at over 50
years of age, under the Arabian sun walks down to plant 300 date trees
all by himself just for the sake of a slave.The Prophet ﷺ didn’t just
see a slave but rather He saw a Believer seeking the Truth.
What was the Impact of this Crowdfunding Campaign?
The
Battle of Trench was fought that exact same year in which Salman was
freed. We all know who was the game-changer in this Battle. As a
scholar, Salman رضي الله عنه was noted for his vast knowledge and
wisdom. Abu Hurairah رضي الله عنه is said to have referred Salman as
“Abu Al Kitabayn” (The Father of the Two Books, i.e., the Bible and the
Quran) and Ali رضي الله عنه is said to have referred him as Luqman
al-Hakeem (Luqman the wise – reference to a wise man in the Quran known
for his wise statements) And Ka’b al-Ahbar said, “Salman is stuffed with
knowledge and wisdom – an ocean that does not dry up.”
Salman رضي
الله عنه had a knowledge of both the Christian scriptures and the Quran
in addition to his earlier knowledge of the Zoroastrian religion.
Salman رضي الله عنه in fact translated parts of the Quran into Persian
during the lifetime of the Prophet which earned him the honour of being the first person to translate the Quran into a foreign language.
GAP BETWEEN GLOBAL POTENTIAL AND ACTUAL ZAKAT COLLECTION
Another
important lesson we learn from this is that it showcases a classic
example of impact crowdfunding. The Prophet ﷺ identified the problem as
well as provided a solution to it, to which he called the community to
come together to help. With the fast paced world, it is very easy to get
lost in the overflow if information. If the people are properly aware
of the issues at hand, and there are proper facilities at hand to manage
the funds, people will participate for sure.
Islamic
social financing holds the promise. This is based on estimates
developed in studies by researchers at the Islamic Development Bank
(IDB) and the World Bank. IDB’s research on Zakat in
2015 shows an estimated US $600 Billion (RM 2.4 Trillion) available to
meet humanitarian needs. The logic goes further. If 1% of this is made
available, it can meet the global funding deficit for 2015.
Against this potential, how much zakat is mobilized across the world? A
back-of-the-envelope calculation provides some interesting insights.
Rounding off the latest actual collection figures as reported by various
issues of the IRTI Islamic Social Finance Report (Obaidullah et al,
2014, 2015, 2017), we find that Saudi Arabia (USD 4 billion), Malaysia
(USD 600 million), Indonesia (USD 270 million), Sudan (USD 225 million),
India and Pakistan (USD 100-150 million each), Islamic Relief Worldwide
– collected from 1st world Muslims – (USD 100 million), Singapore (USD
20 million), Brunei (USD 15 million), South Africa (USD 10 million) –
add up to USD 5.5 – 6 billion. This work out to be around one percent of
the estimated potential.
Note
that among other notable countries with significant Muslim population,
Iran doesn’t have zakat. Muslims in Russia, CIS countries and African
countries collect negligible zakat (Russia: USD 5.9 million; Nigeria:
USD3.3 million). Turkey mobilizes zakat, but through a handful of NGOs
only. If we add 3-4 billions from other GCC countries. A conservative
global estimate will be about 10-15 billion USD.
Therefore, at best a maximum of 2-3 percent of potential zakat is being actually collected.
Umar
Munshi, founder of Ethis Ventures writes, “Muslims give the most but
remain the neediest. It is clear that our current distribution system
for Islamic social finance is terribly broken. Clearly also, a huge
portion of Muslim donation proceeds are somehow lost, not knowing
exactly where it ends up.
Based
on the numbers and observable impact (or lack of it), the trust that we
have in bodies that deal with Islamic social funds needs to be
reexamined. In many cases, our trust is abused for selfish gain. Even
for those who are sincere and honest, there is a lack of understanding
and procedures in place to prevent leakages and fraud.”
NEED FOR TRUST
The
Charity Comission for England and Wales record, ” The public want
greater authenticity not just more transparency, they want to know that
charities are what they say they are. And conversely: when they see
actions and behaviours that are inconsistent with a charity’s purpose
and values (for example in fundraising or protecting staff and
beneficiaries), their trust is undermined. And we now know that trust
affects the public’s willingness to support charities, particularly in
terms of becoming long-term supporters or volunteers. We mustn’t wait
for donations, and other means of support for charity, to be hit, before
we act.
Public
trust in charities has plateaued since 2016. Whilst trust in other
social institutions may have declined in comparison, we consider it
unsatisfactory that charities are trusted less than the average man or
woman in the street. It is our aspiration that charities are among the
most trusted social institutions. And we think charity leaders share
that aspiration. Charities have a special status in society, which comes
with certain privileges (financial and reputational) and advantages
(public support). With these advantages come obligations to act to a
high standard of compliant and ethical behaviour that the public
expects.
The
public make clear that transparency about the distribution of funds and
the end impact that donations have is critical to their trust in
charities. When the public suspect that charities are not showing good
financial stewardship, living their values, and having a demonstrable
impact, their trust decreases. More generally, there is a suspicion that
a great proportion of donations do not reach the beneficiaries they are
supposed to reach. This is reinforced when impropriety by charities
comes to light and is widely reported on.” [Trust in Charities, 2018]
Not
just Muslims, but the world can take inspiration from the life of
Prophet Muhammad ﷺ. Allah mentions in the Quran, “There has certainly
been for you in the Messenger of Allah an excellent pattern for anyone
whose hope is in Allah and the Last Day and [who] remembers Allah
often.” [Surah al-Ahzab, Ayah 21]
Why do I highlight this? Even
before the advent of his Prophethood, he ﷺ was very well known in his
community as the most trustful and the most truthful man. His traits of
trust and truthfulness were so well known that even his staunchest opponents from
the Quraysh in Makkah used to entrust him with their expensive riches
such as armor or gold when they traveled away from home. They knew for a
fact that he would save their wealth for them and give back exactly
what belonged to them upon their return. Without the ease of transport
we have today, people used to be away for months and years at a time.
Those who were entrusted with wealth etc quite a lot of the time ended
up cheating and completely denying that they were even entrusted with
something in the first place.
Reading
about the life of the Prophet ﷺ will really bring you to your knees in
appreciation of his life. When the Messenger of Allah ﷺ migrated from
Makkah, he still had many of his persecutors’ belongings with him for
safekeeping. Despite all the insults, harm and persecution meted out to
him and his companions, Prophet Muhammad’s ﷺ integrity was never
compromised.
Aisha
رضي الله عنها said, “He ﷺ instructed Ali to stay behind in Makkah, in
order to return all the trusts the Messenger of Allah ﷺ had for people.
There was nobody in Makkah (even his enemies) who had valuables that he
feared for except that he kept them with the Messenger of Allah ﷺ, due
to the honesty and trustworthiness that was known [to all] about him.
Thus, Ali stayed back for three days and three nights to deliver
everything entrusted by the people to the Messenger of Allah ﷺ back to
them, and then caught up with him ﷺ after completing that task.”
[al-Bidayah wan-Nihayah (3/218-219)]
To
put things in context and the sheer magnanimity of this incident, these
are people who had just carried out an assassination attempt in the
middle of the night on the Prophet and had put a price on his head.
SOLUTION?
We are still quite far from reaching our peak level but we are slowly starting to get a few answers. GlobalSadaqah.com, a Malaysian Shariah-compliant crowdfunding platform which
aspires to change the beneficiaries of charity today to become the
benefactors of tomorrow has arrived on the scene. Learning from the
above mentioned Prophetic lessons they have developed a unique 3T’s
culture :
1. Trust:
With donations flowing in from across the world for the campaigns, they
have verified and trusted partners on the ground to make sure that the
funds are disbursed directly to the people in need.
2. Transparency:
All the money being raised for campaigns can be viewed across multiple
platforms with regular updates given out to keep the donors up to date
as to when and where exactly their donations are being used.
3. Time Efficiency:
Using Global Sadaqah’s high-tech platform, donors can choose from a
wide range of campaigns to support and have a maximum impact on the
ground in a minimum amount of time.
May Allah allow us to emulate the best of examples in all of our personal and professional dealings.
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