Zakat (“charity”) is a cornerstone of the Islamic faith. It is the obligatory tax on an adult Muslim’s wealth, that is dedicated every year to helping the poor and needy. In Indonesia, with the largest Muslim population in the world, the potential of zakat for wealth distribution and social amelioration is huge. In 2015, the potential zakat collection was estimated at around three percent of Indonesia’s gross national product, or a total of at least USD28 billion. Yet, what was actually collected was only ten percent of this amount. The collection, management, and use of zakat have long been stymied by inefficiencies, corruption, and abuse. The government has worked to regulate zakat management but anxieties remain on questions of transparency, accountability, and effectiveness in serving the poor.
In 1993, Parni Hadi, editor-in-chief of the Indonesian newspaper Republika, started a modest zakat collection drive among the newspaper’s employees, that later expanded to include the paper’s readers and the general public. The results were so encouraging that Hadi and his colleagues formed DOMPET DHUAFA REPUBLIKA (DDR), or “Wallet of the Poor,” which was officially registered as a charity organization and zakat collector. With a strong sense of purpose, DDR sought to transform traditional zakat philanthropy for the poor from simple “charity” to “empowerment”—so that the poor could move from being dependent “recipients” of alms towards becoming wealth creators, and eventually “contributors” of alms themselves. So DDR moved zakat funds from customary practices of charitable giving to social development projects aimed at building self-reliant communities and capacitating the poor—Muslims and non-Muslims—through programs of economic assistance, health services, education and training, and diverse other activities.
Now independent of Republika and known simply as DD (short for “DOMPET DHUAFA”) the organization’s economic projects have included building public facilities, support for small and medium enterprises, farm production and marketing assistance, a bank providing preferential loans to the poor, and a training-and-support program that has upgraded the capacities of hundreds of microfinance groups in Indonesia. In the health sector, DD has established free clinics and a free, well-staffed, and well-equipped hospital for the poor that is the first of its kind in the country. In education, DD annually supports 400 poor university scholars; runs a free boarding high school for poor but deserving students; and operates a teacher training school, as well as a vocational and entrepreneurship center that trains a thousand people per year.
From the start, DD’s leaders have addressed the ills besetting the credibility and impact of the country’s zakat institutions: they scrupulously practice transparency and full accountability in their financial and governance systems, set and maintain professional standards in their zakat collection, and carefully target those in greatest need, and adopt marketing strategies that encourage and facilitate giving from Muslims within the country and elsewhere in the world. As a separate initiative DD has generously shared its expertise, training other zakat collection organizations to modernize their operations and professionalize the work of their zakat managers.
DOMPET DHUAFA has grown phenomenally to become the largest philanthropic organization in Indonesia today, in terms of donations received. In 2015, DD collected total donations equivalent to USD 20.2 million With offices in twelve Indonesian provinces and five foreign countries, DD’s 200 employees, and 10,000 volunteers have reached thirteen million beneficiaries as of 2015, of whom at least twenty percent have moved out of poverty. With the public trust it enjoys and its work in supporting other zakat organizations, DD continues to raise the level of zakat donations in Indonesia. But just as important, it has widened the space and opportunity for Indonesians, through zakat, to become “good Muslims.” It has created as well an inspiring model, for other nations and religions, of disciplined, sustainable faith-based development.
In electing DOMPET DHUAFA to receive the 2016 Ramon Magsaysay Award, the board of trustees recognizes the organization and its leaders for redefining the landscape of zakat-based philanthropy in Indonesia, unleashing the potential of the Islamic faith to uplift, irrespective of their creed, the lives of millions.