There is nothing wrong with the charity distributing zakaah to those who are entitled to it, acting on behalf of those who have given it and those who are in charge of it, and they will be rewarded in sha Allaah.
It is permissible to give zakaah to employees of the charity and students in the halaqahs if they are among those who are entitled to zakaah, such as if they are poor or needy, and they do not have enough to live on, or if they are in debt and cannot afford to pay off their debts, because Allaah says (interpretation of the meaning):
“As-Sadaqaat (here it means Zakaah) are only for the Fuqaraa’ (poor), and Al‑Masaakeen the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allaah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allaah. And Allaah is All-Knower, All-Wise”
It is not permissible to delay giving zakaah, unless there is a greater interest to be served, but the delay should be brief and should be for a reason such as there being no one who deserves it or the money is not available to be paid as zakaah, or to wait for some relative and the like.
Ibn Qudaamah (may Allaah have mercy on him) said: If he delays it – i.e., zakaah, in order to give it to a relative who is more entitled to it or to one who is in great need, if it is delayed for a short time, there is nothing wrong with that, but if it is for a long time, that is not permissible. End quote from al-Mughni (2/290).
The Standing Committee was asked about a charity that collects zakaah from the rich then delays giving it for almost a year, on the grounds that they are giving help in Rabee’ and in Ramadaan, and so on. What is the ruling on this delay, as the owners of the wealth have done what is required of them and have asked us to take on the responsibility?
They replied: The charity must distribute the zakaah to those who are entitled to it, and not delay it if there are people who are entitled to it.
End quote from Fataawa al-Lajnah al-Daa’imah (9/402).
Based on this, giving zakaah in the form of monthly instalments is delaying it from the time when it must be paid, and that is not permissible.
If there is a need to give the zakaah to the poor in instalments, there is nothing wrong with that, but that is subject to the condition that the zakaah should have been paid in advance, i.e., the one who paid it must have paid it before the year was over, in which case it there is nothing wrong with paying it in instalments, so long as it is not given any later than the end of the year.
This means that the charity needs to convince the givers of zakaah to give their zakaah in advance, so that they can prepare to distribute it on a monthly basis in a manner that is in the best interests of the poor and needy.
The way in which it may be paid in advance is: if his zakaah becomes due at the beginning of Safar, for example, when he pays his zakaah on time, he can pay his zakaah for the coming year as well, so he will have paid his zakaah one year in advance. If we assume that his zakaah for the coming year is one thousand, then he can pay one thousand in advance for the year, or he may pay it in instalments throughout the year, as he sees fit. Then when the next year ends, he will have paid his zakaah and will not have delayed any of it.
Ibn Qudaamah said: Ahmad said: It is not right for him pay his zakaah in instalments on a monthly basis, meaning he should not delay paying it in order to pay it in instalments, giving a little bit every month. But if he gives it in advance to them or to others, in instalments or all at once, that is permissible, because he is not delaying it from the time when it is due. End quote from al-Mughni (2/290).
The Standing Committee was asked: Is it permissible for me to pay my zakaah a year in advance, in the form of regular monthly payments to poor families?
They replied: There is nothing wrong with paying zakaah one or two years in advance, if interests dictate that, or giving it on a monthly basis to the poor who are entitled to it.
End quote from Fataawa al-Lajnah al-Daa’imah (9/422)
See also question no. 52852
To sum up: it is not permissible for this charity to give the zakaah that it has been delegated to give in monthly instalments, unless they know that the one who gave the zakaah gave it in advance. They may encourage people to give zakaah in advance, so that they may give the poor help every month or every three months, and so on.
If a person takes zakaah because he is in need, such as the poor and needy and debtors, then at the time of giving his situation must be determined: is he entitled to zakaah or not? He may be poor now, then Allaah makes him independent of means by His bounty, so it is no longer permissible to give him zakaah. We must be careful about this so that zakaah will be given to those prescribed in sharee’ah.
We ask Allaah to give to those who take care of charities the best of rewards, and to help them and guide them, and enable them to do all that is good.
And Allaah knows best.