A colleague of ours died (may Allah have mercy on him), and there is no one to look after his children after him except Allah. His colleagues set up a fund to collect donations, so that a monthly allowance can be given to them. Part of the agreement was that if it is possible to spend from that fund on other charitable causes, that would be done. But in fact, the donations are only used for this family. The money collected reached the nisaab (minimum threshold at which zakaah becomes due) and one year has passed. Is zakaah due on it, or is it like a waqf or charitable fund on which no zakaah is to be paid?
Praise be to Allah
We put this question to our shaykh, ‘Abd ar-Rahmaan al-Barraak (may Allah preserve him) and he replied:
So long as the money in the fund is no longer in the possession of the donor, no zakaah is due on it. Similarly, no zakaah is due from the poor person, because he has not taken possession of it; rather it has been placed in a regular charitable fund, over which the poor person has no control. So what appears to be the case is that no zakaah is due on this money.
For more information please see the answer to question no. 125370.