JEL Classification

Keywords

1 Introduction

Zakat is a unique form of charity in Islam. For a believing and practicing high net worth Muslim, it is a compulsory annual levy. In the classical framework, zakat is to be mobilized by the Islamic state and utilized for beneficiaries as ordained by the Shari’ah. In the absence of a state enforcement mechanism, however, zakat is clubbed with other forms of philanthropy that is undertaken by the individual. At the same time, given that the primary beneficiaries of zakat are the poor and the destitute, zakat is deemed to be a tool of poverty alleviation. The voluntary dimension of zakat payment naturally requires an understanding of donor behavior. Every donor has unique behavioral traits that motivate and trigger his/her action. It may be simple obedience and servitude to the commands of the Almighty as transmitted through religion. Or, it may be rooted in benevolence and a sense of obligation to help the poor and the needy. Or, it may be borne out of “affinity” for members of extended family and clan. Such action may also be a result of a strong desire to please the Creator by helping His creation. Donors may also be triggered by a sense of guilt and the need to expiate sins committed consciously or unconsciously. Donor behavior may also be shaped by the existing practices with respect to the management of the charity funds. Arguably, every donor has a unique set of preferences that may vary with respect to the role of a centralized or decentralized system, local and institutional actors, and the clergy. A donor may also prefer a “collectivist” scenario that is built on “trust” where measures to ensure transparency, accountability, and good governance are in place. If such measures are not or cannot be put in place, she/he may prefer an “individualist” scenario and self-management of zakat.

The purpose of this chapter is to provide a fundamental understanding of what governs the behavior of zakat donors—the triggers, motivators, preferences, and inclinations as well as aversions and discomforts—and then map the same with what the environment offers to them. A gap, if any, will naturally have policy implications and call for reforms. Since the regulatory infrastructure and policy environment usually differ across countries, the study also documents and compares donor behavior for country-specific subsets of the overall sample. The rest of the chapter is organized as follows. Section 6.2 undertakes a survey of related literature, primary in conventional and secular domain on what motivates the donors. Section 6.3 describes the objectives, data, and methodology. Section 6.4 presents the findings and discusses the same. Section 6.5 provides a summary of the paper.

2 Prior Studies

A number of studies have been undertaken to investigate a fundamental question: “what motivates an Islamic donor to donate?”

The intrinsic and extrinsic motivations for charitable giving can vary from donor to donor (Sargeant and Woodliffe 2007). A 2009 study by the Center for Philanthropy, Indiana university finds top three motivations for giving as follows: (i) providing for the poor’s basic needs such as food and shelter; (ii) helping the poor help themselves; and (iii) making the community better. Bekkers and Bowman (2008) link charitable giving to trust. They find that a higher level of general trust is associated with more confidence in charitable organizations and charitable giving. People who are more trusting and believing in altruistic values are more likely to have confidence in charitable organizations and to start volunteering.

Several studies examined the linkage between income differences and factors, such as altruism, trust, and responsibility. Andreoni (1990) finds that the degree of altruism varies by income level. Wiepking (2007), however, does not find an effect of income on the probability of giving, but finds a consistent negative effect of income on both total and religious donations as a proportion of income. A synthesis of the current research into “major” donors and philanthropic giving undertaken by the Institute for Fundraising has some interesting findings regarding what motivates the major donors (Lincoln and Saxton 2012). The synthesis clearly highlights that major donors in developed countries emphasize the importance of strategic philanthropy; most give to causes where they have a personal connection. Interestingly, religious organizations figure in the group that receives the least support.

Breeze (2011) summarizes various theories of philanthropy that emphasize (i) the “purchase” of donor benefits, including intrinsic benefits, such as the satisfaction and pleasure gained by the act of donation; (ii) the creation and communication of a certain individual identity; (iii) an attempt to shape the world, while also transforming self-image; (iv) the relationship building between donors, charities, recipients and other donors; and (v) the pursuit of a moral and purposeful life or self-actualization. Schervish (2008) argues that all giving is motivated by an array of factors. An extensive study of major donor motivation in the UK (Lloyd 2004) groups the varied motivations that drive giving among the wealthy into five categories: (i) belief in the cause; (ii) being a catalyst for change; (iii) self-actualization; (iv) duty and responsibility; and (v) relationships. Although economists, psychologists, sociologists, and other researchers have identified many motivations for giving, including a variety of predictors, such as tax implications, altruism, and others, the models and theories of the motives for donating have proven insufficient (Vesterlund 2006; Van Slyke and Brooks 2005; Burnett and Wood 1988).

A number of studies explore the link between religiosity and charitable behavior. Religiosity has been proven to be a significant contributor to charitable giving in American society (Schervish 1997). Religion provides a cognitive framework that fosters caring and benevolent behavior. The impact of religiosity on religious donations is explicit. Brown and Ferris (2007) show that people with religious beliefs tend to be generous and have greater concern for disadvantaged groups. Lili and Elizabeth (2008) explore the impact of social capital on individual charitable giving to religious and secular organizations and find evidence of important differences in the determinants of religious and secular giving, suggesting the need to distinguish these two types of charitable giving in future work.

In relation to Islamic charity, studies are extremely rare. Bakar and Rashid (2010) examine the motivations underlying zakat on income for Malaysia. In a survey of 31 academics of the International Islamic University Malaysia, this study investigated the relative importance attached by Islamic donors to several motivators, e.g., zakat as a social obligation toward the Muslim Ummah; a payment toward the rights of the poor and needy; a religious obligation; a way to improve the economic condition of the Ummah; an effective mechanism for wealth distribution; and a way to claim tax rebate. The study witnessed a near agreement (ranging between 75 and 90%) among most respondents on all the factors. The study concludes rather hastily that Muslims do not take into serious consideration the issue of zakat distribution since what matters more to them is that they would get tax rebate out of the zakat on income paid. They base their conclusion on the finding that the availability of tax rebate is ranked higher in its influence toward the fulfillment of zakat obligation (80%) as compared to the effectiveness of zakat for wealth redistribution (74%). This is notwithstanding the fact that 84% of respondents stressed on zakat as a tool to improve the economic condition of the Ummah. Needless to say, there is a need for a study that uses a more exhaustive and comprehensive list of motivators, and a much larger sample size to arrive at realistic results.

In an early study, the first of its kind, Diabi (1993) sought to explain the underlying reasons for non-payment of zakat. Treating zakat similar to income tax, he hypothesized that the probability of a Muslim individual declaring his/her true income (and the zakat payable thereon) depends on the individual faith, attitude toward risk of being detected, and the enforcement of a penalty for zakat evasion. This framework is understandable in the context of Saudi Arabia, where zakat is compulsorily mandated by the state and enforced vigorously in a manner similar to income tax. A study to examine reasons for “zakat evasion” therefore makes sense in this context. It does not go very far, given the contemporary realities in most Muslim countries where zakat payment is treated as a voluntary contribution from the standpoint of legal compliance, even while it is compulsory from a religious point of view. In these countries, tax benefit may at best be seen as a tool to incentivize zakat payment.

In another study, Saad and Haniffa (2014) examine factors influencing business zakat compliance behavior using the theory of reasoned action (TRA) to investigate whether “attitude,” “subjective norm,” and “intention” are the determinants of zakat compliance behavior and find intention to be a significant predictor of zakat compliance behavior. Intention is further found to be influenced by both attitude and subjective norm, and it mediates the relationship between both factors with business zakat compliance behavior. In yet another study, Mustafa et al. (2013) investigate and seek to explain the factors underlying the inclination of Islamic donors to trust a particular zakat institution and find board capital, disclosure practices, governmental model of zakat institution, and stakeholder management as being the antecedents of Islamic donors’ trust.

3 Objective, Data, and Methodology

The purpose of this study is to gain a fundamental understanding of what governs the behavior of zakat donors—the triggers and motivators, traits and attributes, preferences, inclinations as well as aversions and discomforts—and then map the same with what the environment offers. Based on their responses to a set of statements that connote specific motivators, traits, and preferences, an attempt has been made to develop psychographic profiles of individual Islamic donor groups. Various statements used in the study capture the following factors.

“Servitude to God” is expected to be the dominant motivator for a believing and practicing Muslim for whom zakat is compulsorily mandated by the Creator. It is a religious obligation that opens the possibility of earning His pleasure through helping His creation. “Purification and expiation” is also expected to be key motivators. zakat is paid by the believers and faithful as a way to purify wealth, to expiate one’s sins. The study also considers “feel good” as well as “getting rid of feeling of guilt” as possible motivators. Since zakat is primarily targeted at alleviating poverty and helping the needy including the near-and-dear ones, “altruism,” “benevolence and concern for others,” “affinity and relationship” are also expected to motivate zakat payment. Additional motivators considered in the study are “self-actualization” through “making a difference to the society” and/or “helping a cause that is dear to one’s heart,” such as “propagation of Islam.”

It may be noted here that some of the factors above may be interrelated because every action for a believing and practicing Muslim is, in the ultimate analysis, undertaken with a view to seek the pleasure of the Almighty and is motivated by “servitude to the Creator.” The factors, however, connote specific concerns and are, therefore, considered independently as influencers and motivators. Other factors may be in the nature of more mundane considerations, such as immediate returns in the form of “tax benefits” and “self-recognition.” Zakat may be paid simply for “compliance with dictates of the state” or to bring “social change through local and voluntary organizations.”

The study also aims to examine the relationship if any, between the various motivators, influencers, and preferences of Islamic donors and their own individual traits—piety, benevolence, vigilance, accountability, responsibility, ability to trust, penchant for details, apathy, indolence, and indifference—as well as the characteristics of zakat organizations, e.g., governance, transparency, accountability, information sharing, frugality, extravagance, etc.

In addition to measuring the relative importance of factors that motivate the individual zakat donor, the study also seeks to profile the donors in terms of specific behavioral traits and preferences. The study has the additional objective of examining whether the above-mentioned factors are influenced by the country of origin of the zakat payer.

Another important objective of the study is to examine if and to what extent specific motivators, behavioral traits, and preferences are interrelated and go together. For instance, it may seek answers to the following types of questions. Do the individuals who pay zakat to seek the pleasure of God are also motivated by altruism, affinity or kinship? Do they show responsibility and accountability? Do they appreciate frugality and caution? Do they demand a lot of information? Do they prefer the state or non-state actors to be entrusted with zakat management? The study seeks to find answers to such questions by subjecting the statements to pair-wise correlation analysis, and cluster analysis.

3.1 Clustering Approach

Clustering is the method of identifying the distribution of patterns and intrinsic correlations in large data sets by partitioning the data points into similar classes. The major goal of cluster analysis is to separate n individual observations, or items, into k groups, or clusters, on the basis of the values for the q variables measured on each individual. There are three major classes of clustering algorithms, namely (1) hierarchical, (2) partitioning, and (3) model-based methods. Given that the nature of our data set is binary and is relatively small, we employ hierarchical cluster analysis with binary squared Euclidian distance and Ward-linkage to identify the number of clusters and thus the number of groups of Islamic donors with similar motivators, traits and preferences. Hierarchical cluster is well suited for binary data because it allows selecting from a great many distance functions invented for binary data and is theoretically more sound for them than simply Euclidean distance. More specifically, we use the following approach in clustering:

Suppose for each individual \(\left( {i = 1, \cdots ,n} \right)\), let the binary variable \(X_{ij}\) take the value 0 or 1, where \(j = 1, \cdots ,q\). Then two individuals have a “match” on a binary variable if both individuals have the same values for that variable either both 0 or 1. Otherwise, the two individuals are said to have a “mismatch” on the binary variable. To determine the closeness of the clusters, we calculate the squared Euclidean distance \(\mathop \sum \limits_{ij}^{q} \left( {X_{ij} - X_{i`j} } \right)^{2}\) between each pair of rows of 0s and 1s.

Data for the study was collected through a survey. It required respondents to tick if they agree with a given statement. Respondents were asked to respond to 52 statements relating to their motivation and preferences and 4 questions relating to their nationality, education, profession, and income. The survey was announced widely on the social media, including Twitter, Facebook, and several large networks, e.g., Thomson Reuters Islamic Finance Gateway, Global Islamic Economy, IBF Net, Islamic Finance Info, NRIndians, Bihar Anjuman and Sadaqa. In. The survey elicited a total of 226 respondents.

4 Findings and Discussion

First, we consider the relative importance attached to various motivators, triggers, and preferences. A simple calculation of the relative frequency of responses to a given statement throws up some interesting findings as below. We also consider three specific subsets from Nigeria, India, and Malaysia and examine if “country of origin” is a significant influencer of their behavior.

The primary motivator for zakat payer is “Servitude to God” (Table 6.1) as the related statements elicit maximum responses. The significance seems to be relatively lower for zakat payers from Nigeria.

Table 6.1 Servitude to God
Full size table

Related to the above is the purification and expiation aspect of zakat. Islamic donors are motivated by positive statements without the use of terms, such as “sin” or “guilt.” As high as 64% pay zakat because it “purifies” their wealth. The percentage comes down to 36% when the statement is rephrased as “wipes off sins.” Similarly, a high 51% say they pay zakat because “it feels good” while only 30% say, they pay zakat because “it helps get rid of his/her feeling of guilt” (Tables 6.2 and 6.3).

Table 6.2 Purification and expiation
Full size table
Table 6.3 Altruism
Full size table

“Benevolence and concern for the poor and the needy” motivates 63% of respondents and 44% pay zakat to an organization because it can help the poor and make a difference to the society. Further, their “affinity” with potential beneficiaries motivates 33% of the Islamic donors. Altruism and affinity seem to be of relatively lesser significance in Nigeria as compared to India and Malaysia

“Self-actualization” is not a major motivator as a meager 27% say they pay zakat to an organization because it helps a cause dear to his/her heart. This percentage is unusually low at 5% for Nigeria, 30% for India, and 40% for Malaysia.

A higher percentage, 36% of all respondents pay zakat because it may be utilized for “propagation of Islam.” This percentage is 24%, 33%, and 58% for Nigeria, India, and Malaysia, respectively.

“Self-recognition” is a motivator for a little more than one-third of respondents. 37% of them feel that zakat organizations must acknowledge his/her contribution through a letter or a note or some other form of recognition. This ratio is 19%, 64%, and 31% for Nigeria, India, and Malaysia, respectively.

Zakat payers may not be motivated significantly by immediate returns in the form of “tax benefits.” It is a motivator for a mere 17% of the respondents and elicits almost zero response in Nigeria and India. It is, however, a significant motivator in a country like Malaysia. The overall picture may be biased due to the absence of substantial tax benefit on zakat in a given jurisdiction. While Malaysia provides for tax rebate or a reduction in tax payable by the full amount of zakat paid, other countries provide tax benefit similar to other donations equal to a reduction in tax base or taxable earnings by the zakat amount. This is supported by the fact that 46% of Islamic donors feel if an individual pays zakat, he/she should get full deduction in income tax payable. The ratio is quite high in India at 55% and in Nigeria at a more modest 29%. A relatively lower percentage advocate partial deduction in tax payable. A relatively lower percentage also advocate tax benefit to businesses. However, an equally high 46% feel that zakat and taxes should not be mixed up; neither individual nor business should get any tax reduction for paying zakat. It is as high as 79% in India and extremely low at 17% in Malaysia, arguably for reasons cited above (Table 6.4).

Table 6.4 Tax benefits
Full size table

“Compliance with dictates of the state” does not appear to be a significant motivator as only 12% acknowledge they pay zakat because it is compulsorily required by the state, even when the sample includes countries like Malaysia, Saudi Arabia, and Pakistan that have mandated zakat to be compulsory. Predictably, the ratio is higher at 33% in Malaysia, but does not explain the low overall ratio. The ratio, predictably is zero for India, consistent with the fact that state plays no role in zakat management) and a meager 7% in Nigeria (zakat is compulsorily mandated in a few provinces). Does this imply that Islamic donors are not in favor of the state having a role in zakat management? Quite contrarily, 40–41% of respondents feel that the central government should collect and distribute zakat. Similarly, 34% feel that the provincial government should collect zakat and a higher percent (40%) feel that it should distribute zakat as well. A country-wise analysis, however, offers quite interesting contrasts. India and Malaysia seem to be placed at opposite extremes with Nigeria placed in between. Few Indian Islamic donors see any role for the state at the central or provincial levels, a large majority batting for non-government organizations and some opting for the ulema. An exactly opposite set of preferences is reported for Islamic donors from Malaysia. Preferences from Nigeria are similar to India, albeit less intense (Table 6.5).

Table 6.5 Role of state, non-state actors in zakat collection/distribution
Full size table

Overall, a sizable percentage of Islamic donors perhaps look forward to “social change through local and voluntary initiatives” if we bracket local entities with NGOs and ulema together.

Islamic donors display a high sense of responsibility/accountability in the matter of zakat estimation and payment with 67% asserting that they have a fair knowledge of how to estimate their zakat liability. 27% need professional advice and assistance. A high 46% feel it is their responsibility and religious obligation to ensure that zakat is utilized properly for the benefit of the poor and the needy. 14%, however, display extreme apathy, indolence and indifference and say they are unconcerned about how zakat is utilized once the obligation to pay is over. Is there a pattern too in the country-specific responses (Table 6.6)?

Table 6.6 Responsibility and accountability
Full size table

Indian zakat donors demonstrate a high sense of responsibility and accountability. Feeling that they are adequately knowledgeable, they hold themselves personally responsible and accountable for the end-use of zakat. Nigerian respondents also demonstrate fair level of knowledgeable but a far lesser degree of personal accountability for the end-use of zakat. Malaysian zakat donors feel they need expert assistance and also demonstrate moderate levels of personal accountability. The felt need for expert advice may also demonstrate a “quest for accuracy and perfection.” However, the straightforward response that “I am not concerned about how zakat is utilized” among 27% of Malaysian Islamic donors compared to 10% and 9% of Islamic donors from India and Nigeria, respectively does indicate “apathy” and “indifference” as being the reason for seeking expert assistance (Table 6.7).

Table 6.7 Frugality
Full size table

Islamic donors clearly feel that the zakat-collecting organizations should heavily promote their campaigns to raise funds, similar to modern fund-raising organizations, through roadshows, conferences, etc. (42%) and use mainstream media—newspaper, TV, Internet, etc. for advertising and fund-raising campaigns (50%). An equally large number of respondents (48%) feel that they should avoid costly and expensive methods of creating awareness. Only a meager 16% believe that they should use masjids alone for creating awareness regarding zakat. Indian zakat donors tend to be far more frugal than their Nigerian and Malaysian counterparts with 60% preferring a cautious approach and avoidance of promotional methods that cost money. Malaysian zakat donors (77%) seem to be quite comfortable with aggressive marketing and promotional campaigns to raise funds. Once again Indian zakat donors display distinct inclination for frugality, with only 21% in favor of promotion and some even opting for the traditional use of masjid for creating public awareness about zakat (Table 6.8).

Table 6.8 Conservatism/Caution
Full size table

Islamic donors, overall, display a high degree of conservatism in the matter of utilization of zakat by organizations to cover their own administrative expenses with 39% entirely ruling this out and 48% opting for the standard practice of permitting zakat organizations to use up to one-eighth of zakat collected to cover their own administrative expenses. Since zakat flows are meant for the poor and the destitute, scholars recommend that zakat collected during a year should be fully spent during that year. 35–36% of Islamic donors seem to take an extreme position in this matter and prefer a prohibition on organizations from carrying undistributed surplus zakat to the next lunar year and/or investing such surplus to generate good long-term returns. Even when such surplus is invested in safe and liquid avenues for a short term, 26% find the idea repugnant. While respondents from Malaysia bat for aggressive marketing and fund-raising campaigns, they also display at the same time a higher degree of concern. Fifty-two percent feel that the entire cost should be absorbed by non-zakat funds and 57% prefer to place a cap at one-eighth of zakat funds collected. In the matter of carry forward of undistributed surplus, they display more flexibility with only 30% rejecting this possibility. The corresponding percentage for India is 48% (Table 6.9).

Table 6.9 Governance
Full size table

Individual zakat donors place a lot of value on “audit” with 58% opting for mandatory and independent financial audit and 65% for Shari’ah audit. 40% seem to be avid seekers of information requiring that organizations must report the figure for total zakat collections every month to the public. They also seem to place high value on transparency in the form of separation of zakat from Sadaqa, cash waqf funds and their disclosure to the public (48–49%). An equally large percent of respondents require annual disclosure of category-wise as well as project-wise distribution of zakat to the public. The inter-country comparison clearly shows that there are major differences in the way Islamic donors demand good governance and seek transparency. Respondents from Nigeria are least concerned about audit and are least demanding in terms of relevant information. Zakat donors from Malaysia display maximum vigilance and concern for good governance.

While making inter-country comparison and interpreting the country-specific findings, it is useful to juxtapose the social, economic, legal, and political environment present in these countries. It may be noted that in Malaysia, zakat management is undertaken in a fairly organized manner with involvement of state and private corporate entities, with a legal regulatory framework in place and with a policy environment that coordinates between financial institutions, religious councils, inland revenue authorities, and other relevant institutions. In India, on the other hand, zakat management takes place in a regulatory and policy vacuum and is undertaken informally with minimal involvement of any institutional and organizational infrastructure, the ulema playing a key role in creating public awareness, collecting and utilizing zakat funds. In such an environment, “trust” reposed in the ulema essentially replaces the need for timely sharing of information; with the ulema accountable only to God. Nigeria interestingly, is characterized by a mix of formal and informal zakat management with involvement of the state entities, as well as non-state actors at local levels; a regulatory framework being in place in only a few provinces. The perceived significance of financial audit, Shari’ah audit, information sharing, and good governance practices may thus be explained in terms of the impact of these environmental differences on the Islamic donor’s motivators, traits, and preferences.

As the next step in analysis, the study finds motivators, traits, attributes, and preferences that go together and based on this, clubs them together forming groups or clusters with similar psychographic profiles. We also use descriptors (as distinct from definitions) based on behavioral traits, attributes, and preferences as presented in Appendix 1. Based on the cluster dendrogram presented in Fig. 6.1, we identify three distinct clusters as follows.

Fig. 6.1
figure 1

Descriptors based on behavioral traits, attributes and preferences

Full size image

The first cluster includes God’s servants, who pay zakat simply because it is ordained by God. They take it on themselves to acquire the necessary knowledge regarding zakat rules. They tend to favor zakat management by “non-government actors” including the NGOs, ulema and even by pious individuals. They display high degree of responsibility and accountability and consider it as their own responsibility and/or religious obligation to ensure that zakat is spent for the benefit of the poor and the needy. They prefer a frugal and traditional approach to creating public awareness, such as the masjids. They feel the zakat-collecting organizations should avoid costly and expensive methods of creating awareness. They tend to believe in the traditional view that the zakat organizations must never carry undistributed surplus zakat to next year. A juxtaposition and careful comparison of this cluster with the observations for the sub-sample from India throws up strikingly similarities.

The second cluster includes Islamic donors who display high degree of altruism, benevolence, and concern for the poor and the needy. They also pay zakat to be used for propagation of faith and also to help their near and dear ones. They believe this will purify their wealth, expiate their sins, and make them feel good. They pay zakat because they believe zakat is used for a cause dear to their heart and brings about a change in the society. They do it to seek God’s pleasure as the ultimate objective. They do not display preference for any particular infrastructure of zakat management, but are more concerned about the governance aspects of zakat management. They are traditionalists, unconcerned about returns and feel that zakat surplus should not be invested, either to generate good long-term returns or even for short term in safe and liquid avenues. They are also conservative and place a high value on Shari’ah compliance, especially on the fulfillment of Shari’ah conditions like separation of zakat funds from other forms of donations. They demand transparency and expect to be informed routinely about category-wise and project-wise distribution of zakat.

The third cluster includes zakat players who primarily seek some form of immediate returns, in the form of tax savings. Tax savers show very high correlation with the statists and the law-abiding. They strongly believe that the state (central or provincial) should provide a complete infrastructure for zakat management. The state should provide tax rebate—full or partial—on zakat to all zakat payers, whether individuals or businesses. Tax savers tend to need expert assistance for estimation of their zakat liability and display apathy and indifference toward how their zakat is going to be utilized. They also seem to champion aggressive marketing and use of media and modern technology for zakat management. They display some distrust for zakat bodies and explicitly demand that the zakat organizations must never use more than one-eighth of zakat collected by them to cover their own administrative expenses. They also seek legal compliance in the form of periodic financial audit. A juxtaposition and careful comparison of this cluster with the observations for the sub-sample from Malaysia throws up strikingly similarities.

5 Conclusion

The study has attempted to gain a fundamental understanding of what governs the behavior of zakat donors—the triggers and motivators, traits and attributes, preferences, and inclinations as well as aversions and discomforts. Based on their responses to a set of statements that connote a specific motivator, attribute or trait, and preference, an attempt has been made to develop psychographic profiles of individual Islamic donors or groups among them. The study finds “servitude to God” as the dominant motivator. Other key motivators include “purification and expiation,” “altruism, benevolence and concern for others.” Additional motivators observed in the study are “self-actualization” through “making a difference to the society” and/or “helping a cause that is dear to one’s heart,” such as, “propagation of Islam.” “Immediate returns” in the form of “tax-savings” or “self-recognition” appear to be insignificant motivators when results for the overall sample are considered. These, however, constitute major motivators for sub-sample comprising Islamic donors from Malaysia. This sub-sample also bats for a significant role for state in zakat management.

With increasing role of the state in religious matters, e.g., zakat, there is a clear and perceptible danger of the believers behaving more as citizens and perhaps seeking compliance with state laws and not as pious and benevolent Muslims seeking the pleasure of God. It is not difficult to see the complete turnaround in the objective function of the believer—from seeking to maximize pious and good deeds in the form of zakat payment to one of seeing zakat as a state-imposed tax and seeking to minimize “zakat burden.” Indeed, this possibility manifests in the literature on zakat compliance cited in this study where researchers find the “probability of being detected and penalized by the state” as among the key factors bringing about “zakat compliance.” Our study, however, correctly hypothesizes that the investigated factors should include motivators in an environment where zakat payment is similar to other forms of donations, for “there is no compulsion in religion” in the ultimate analysis. Our findings provide strong supporting evidence that Islamic donors pay zakat because it is required by the Creator, and not by the state.

The study presents interesting contrasts among Islamic donors in terms of their motivators, preferences, and behavioral patterns. It reduces the matrix of responses collected across 28 countries to a set of such factors to three distinct clusters. Interestingly, two of the three clusters closely resemble subsets of the overall sample, when disaggregated on the basis of country of origin, indicating the possibility that Islamic donors from a given country may be displaying a distinct set of motivators, preferences, and behavioral patterns. Given the significance of zakat as the third pillar of Islam, this raises a more profound possibility. The national identity of a Muslim is associated with unique social, economic, legal, and political environment and thus may be a key influencer of the way he/she develops an understanding of the Islamic tenets and displays unique behavioral traits and preferences in matters relating to faith, as important as zakat. The idea of unity of the Ummah in thought and action, though cherished by all faithful, does not quite dominate the impact of environmental differences rooted in nationality.