Research reports

2020

  • Cathy Pharoah: 2020  Building a picture of Muslim philanthropy in the UK foundation context: The scope of existing data
  • This report represents the first mapping of the scale and scope of UK foundations working in the context of Muslim philanthropy. It shows a distinct foundation sub-sector with a growing UK infrastructure and a strong emphasis on humanitarian work in the UK and globally. It represents a companion piece to the study of foundations in Jordan and Palestine by Harrow and Sola (below), demonstrating the knowledge available from existing data sources, as well as highlighting research gaps and the scope for greater foundation knowledge-sharing.

Commentaries on the research

Emerging Trends in the British Muslim Charity Sector - Dr Atif Imtiaz, Muslim Charities Forum

This report by Professor Cathy Pharoah is an important step forward in improving our understanding of the British Muslim charitable sector. Though the British Muslim community remains amongst the poorest in the United Kingdom, with many Muslims living in the most deprived parts of country, rates of giving have been steadily increasing over the years. This report documents this growth and does so with a specific focus on those charities that are grant-making rather than directly involved in delivering services themselves.

Using data derived in the main from accounts and annual reports submitted to the Charity Commission Professor Pharoah has been able to build up a comprehensive picture on grant-making in the UK. She has shown that the growth has been rapid in the past few years though the numbers compared to the mainstream sector remain small. There has also been an increase in the number of charities and foundations that have recently been formed to raise funds for causes in the United Kingdom. This shows a growing sense of confidence in the community.

The report notes that the majority of the income for these grant-making bodies comes from donations raised rather than through endowments though the Islamic institution of waqf (endowment) has historically been one of the main ways through which charitable giving has occurred in Muslim society. Currently, Muslim fundraising in the UK focuses on zakat (obligatory alms tax) and sadaqah (general charitable giving) but it is likely that we will see more endowments being set up in the future. This is because of the large overlap between the Islamic notion of the waqf and endowment in English law and practice. The good fit means that it shouldn’t be too long before Muslim giving shifts towards the setting up of endowments.

The history of the charity sector is such that it began with organisations like Islamic Relief that were formed in response to humanitarian disasters such as the famine in Ethiopia in 1984. Organisations such as Muslim Aid were formed soon after. Much of the work of the Muslim charity sector in the first two decades was focused on disaster relief. However, there has been a shift towards a stronger development agenda in the sector as a whole with increasing support for microfinance initiatives and similar development-focused approaches.

The report also notes a shift towards greater giving for causes in the United Kingdom. This is also a theme that has gathered pace in the past ten years and is likely to become a greater area of interest for British Muslim giving in the next few years. Areas of work that have received support include support for the homeless, prisoner rehabilitation and educational grants. There are a few family foundations that have also been recently set up and this is also a positive step forward. The report therefore identifies a series of important trends in the Muslim charity sector. However, it should be kept in mind that we are still at a very early stage in the story of the development of the British Muslim charity sector.

Resilience of Muslim Giving during COVID19 - Rizwan Yusoof, National Zakat Foundation

Muslim charities and foundations derive much of their funding from voluntary donations. When a crisis hits the economy, the livelihoods of the general population are inevitably affected. House prices and interest rates drop, while household borrowing and unemployment rise. The outbreak of Covid-19 has caused the deaths of over 40,000 people and the economy to plummet by over 20% in a single month. It is having the same tragic impact on people as previous crises, only more severely and on a larger scale than we have seen in our lifetimes. As many people throughout the UK have seen their income drop significantly, many others know they are going to experience this all too soon. So, as people are naturally tightening their belts, it is fair to speculate that spending less will mean giving less too.

This change in giving patterns is having a shock effect on charities. The NCVO recently estimated that the Third Sector stands to lose £4 billion in charitable giving income in the first of half of the year. 70% of charities said that they will ‘go bust’ by the end of the year, according to a survey by the Directory for Social Change. This year, the most auspicious month of the Muslim calendar coincided with the lockdown and so Muslims experienced what can be described as a “Remote Ramadan.” This is a month in which Muslim donors are at their most generous, with estimates suggesting that the UK’s Muslims give over £130m during Ramadan. Would Muslim giving hold up, given people’s loss of income, the absence of physical fundraising events and appeals in mosques and other reminders in different spaces?

The answer, it seems, is yes absolutely! In fact, it appears that some Muslim charities have seen a marked increase in their incomes during this difficult period. Islamic Relief, one of the UK’s longest standing Muslim charities raised a record 30% more than in 2019. MyTenNights, an online facility which collects charitable donations for several Muslim charities reported that £6.8m had been donated on its platform in the Ramadan 2020 period, compared with £2.7m in the previous year. And, National Zakat Foundation, a platform which connects Zakat givers to recipients in the UK, saw a 43% increase in its online income year on year. So how has this been possible? What are the foundations of this apparent resilience to the crisis?

Muslims believe that the soul is an eternal being which is subject to accountability for its deeds. With the aim of achieving God’s grace and the belief in reward for good deeds in the next life, a Muslim may be motivated to give to those in need despite feeling financially vulnerable themselves. The coronavirus outbreak brought with it the additional, tragic feature of illness and death, providing. This would also have brought to the fore a heightened sense of one’s mortality, their legacy and future. This eternal dynamic is crucial in providing perspective to Muslims when faced with crises, with the belief that this life is temporal, and may go some way to explaining the positive responses some charities have seen from their Muslim supporters.

There is another reason: Zakat. Zakat is the third of five pillars of the faith and the primary form of obligatory giving in Islam. Zakat, unlike other forms of voluntary giving, requires Muslims with a certain minimum level of disposable wealth (currently £262) to give away 2.5% of it each year. Unlike charitable giving, which is voluntary, Zakat is a specifically calculated obligation - effectively a religious wealth tax. The 2.5% a person must give is not considered their money once it becomes due for payment. It is the right of someone else and non-payment is a violation of that right. The fact that the amount that is given is a specific proportion, and not an emotional decision to be made by the donor, is a specific source of resilience.

Muslims typically give their Zakat, along with other voluntary income, during Ramadan, the most auspicious month in the Muslim calendar. This year, Ramadan, coincided with the relatively early period of the lockdown, during May. Zakat is paid annually on a snapshot calculation of a person’s wealth, not their income. At this point, job losses hadn’t been experienced on a wide scale, and people may not have yet experienced a significant reduction in their assets.

So in 2020 many Muslim charities were not only insulated from the reduction in charitable experienced by other charities, they were able to help the significantly increased number of people coming to them seeking help. The challenge for Muslim charities will be to make the case to donors that they remain the best place through which to give Zakat next year. It may be that UK Muslim charities continue to see strong support, as more people appreciate the need is so close to home.

Knowledge sharing and data challenges in Muslim Philanthropy - Professor Jenny Harrow, CGAP and member of ETHOS, Cass Business School

When we began our philanthropy research programme supported by the UK government’s ‘Global Challenges Research Fund’ in 2018, our key focus on knowledge sharing among philanthropic foundations which could be described, broadly, as Muslim philanthropy, was underpinned by critical questions concerning the wider state of data. How, and what kinds of, knowledge and experience were shared, and might be exchanged more widely? What information was available about funding levels and sources, grant-making priorities and modes of operating? What data dilemmas are faced by philanthropic donors, practitioners, collaborators and researchers, in exploring and advocating for foundation knowledge-sharing in faith, cultural and particular national contexts?

This research, led by Professor Cathy Pharoah, responds to gaps in our own research knowledge and breaks new ground in two ways. First, through its authoritative contribution that addresses these data dilemmas, in presenting findings which build a picture of Muslim philanthropy in the UK foundations’ context, expanding and illuminating the scope of data. Second, through its clear inter-relationship with its sister report “Knowledge Sharing between Foundations engaged in Youth Development in Muslim-Majority Countries, Jordan and Palestine.”

These reports address knowledge sharing and data challenges in contrasting settings - the UK on the one hand, Jordan and Palestine (West Bank) on the other - one examining philanthropic action broadly, the other concentrating on youth development philanthropy. Yet shared core messages emerge from both sets of findings. Both groups of foundations were:

  • tackling deprivation and conflict through better educational and employment opportunities, particularly amongst young people
  • emphasising the humanitarian needs of communities suffering from poverty or conflict, Muslim and non-Muslim
  • facing demanding challenges of risk, governance and access, because of their global as well as local reach and interest
  • and demonstrating strong relationships of shared values and beliefs between foundations and donors.

We know too from both these research reports that foundations’ knowledge and experience were highly valued and to an extent shared. Also that there was clear potential for furthering knowledge sharing, to help address challenges such as risk taking, promoting donor engagement and interest, and working with new partners. We  hope that this research can extend the network between UK foundations, recognising the importance of local, national and international partnerships to achieving and maximising philanthropic effectiveness, and local, nationally-based  foundations in Jordan and Palestine with a wealth of foundation knowledge, expertise and appetite for learning and partnership, but little visibility compared to their externally-led counterparts.

The potential of the Muslim philanthropy sector - is it time to start a dialogue? - Dr Yunus Sola, Director, Academy of Philanthropy

This July a friend is planning to walk a pilgrimage trail in Spain, the Camino which always reminds me of another historic pilgrimage and one I would love to walk, a Hajj trail known as the "Darb Zubaydha”. It spans from Al Heerah in Iraq to Mecca. It is said that during her annual Hajj pilgrimages, Zubaydah bint Jafar (died in 831 AD) began a series of charitable projects along the walking route to and from Mecca. Her philanthropy included buildings, shade for animals, water wells and canals. Each project resulted in the creation of numerous rest stations for pilgrims along the way. It is said, her example led to more philanthropic investments by future pilgrims and travellers.

Almost 1200 years later, to see Professor Cathy Pharoah’s study illustrate the volume, and by extension, the potential of Muslim led Philanthropy in the UK is both warming and, possibly to some, surprising.

While Pharaoh’s study was not intended to evaluate the data, the study highlights and confirms the growing desire to support welfare and humanitarian needs in the UK and internationally, while at the same time developing leadership and infrastructure to support the growing confidence in UK Muslim faith led philanthropy.

Pharoah’s research data is packed with good news. There is evidence of a resilience in giving, particularly through the Covid crisis,[i] and the volume of funds is growing. Professor Pharoah’s data also opens up the opportunity to ask what’s next for Muslim philanthropy? Pharoah already points the way in terms of knowledge sharing and the experience of International philanthropy which Muslim foundations and grant-making organisations bring to the philanthropy sector. I would leap one step further and suggest that the potential these organisations bring, in terms of knowledge sharing, has the power for significant lasting change in both the UK and international philanthropy. There is a need to support the wider philanthropic community to understand the nature of Muslim philanthropy, increasing the space for dialogue in the UK and internationally, and the opportunities for valuable partnerships, pooling resources, benefitting from local community knowledge and creating sustainable change.


[i] See, for example, Rizwan Yusoof

2019

  • Cathy Pharoah and Catherine Walker, Foundation Giving Trends 2019, CGAP’s eleventh annual research report on leading UK foundations’ giving trends and asset bases, in association with the Association of Charitable Foundations, London, funded by the Pears Foundation.

2018

  • Cathy Pharoah and Catherine Walker, with Emma Hutchins (2018) Foundation Giving Trends 2018, CGAP with Association of Charitable Foundations, London. Funding from the Pears Foundation.

2017

  • Cathy Pharoah, Catherine Walker, and Keiran Goddard (2017) Foundation Giving Trends CGAP with Association of Charitable Foundations, London. Funding from the Pears Foundation.