Zakat, the third pillar of Islam, is the annual religious obligation of allocating a predetermined portion of an individual's wealth and donating it to charity. During the holy month of Ramadan, more Muslims fulfill this obligation, often through traditional distribution systems such as orphanages, hospitals, and religious institutions.
However, seasonal pressures and financial challenges are increasingly disrupting how Zakat is traditionally fulfilled. Many of these distribution systems struggle to operate efficiently under financial and logistical constraints. Moreover, the ethical and religious responsibility shouldered by donation channels increase the effort poured into Zakat campaigns. Manual processes often lead to delays, errors, and inconsistencies in fund distribution—issues that ultimately affect recipients' well-being and reduce the overall effectiveness of Zakat as a social welfare mechanism[4].
Emergence of AI in Islamic Charity: A New Frontier
Faced with growing demands and limitations, some organizations in Saudi Arabia are integrating AI into their Zakat distribution models. One such example is the Al-Wedad Foundation for Development, a nonprofit organization that supports orphans and assists in integrating them in society.
The foundation addressed its efficiency challenges by using AI in social media campaigns and tracking impact through value conversion tracking—a business performance metric that assigns monetary value to different conversions to measure the true impact of advertisement. Automating internal business processes and optimizing marketing campaigns was a game changer for donors, recipients, and employees. Abdul-Aziz Khummash, head of digital marketing at Al-Wedad, describes this system as "the backbone of our AI-powered ad strategy, enabling us to run automated bidding strategies that optimize campaigns based on our objectives and provide valuable insights into their effectiveness" [2].
The multifaceted algorithm developed from AI's business insights help maintain a consistent flow of donations and meet sustainability goals on both the donor and recipient ends. At the logistic level, the foundation's adoption of AI-powered identification mechanisms has increased donors by 25% and raised over USD $1.5 million in donations during the first half of the year, representing an impressive 110% year-on-year increase[3].
Algorithmic Charity and Sustainable Giving
Beyond identifying eligible recipients, charities are addressing concerns around the sustainability of donations and the dependency they may create for recipients. Mohammed Al-Muharib, Director-General of the Charitable Society for Orphans Care (Ensan), connects Zakat's broader societal impact with Saudi Arabia's national vision of communal solidarity, financial empowerment, and sustainability.
"Rather than traditional meal distributions," Al-Muharib explains, "Ensan prioritizes direct financial empowerment, depositing funds for Ramadan baskets directly into families' accounts — a method that aligns with modern, dignified aid" [1]. Like several pioneering organizations, Ensan's adoption of innovative and non-traditional distribution methods addresses the financial dependency of targeted communities on Zakat. By financially supporting scholarships and educational Waqf endowments which are special kinds of donations with sustainable public benefit, Saudi Arabia's sustainability goals are fulfilled at the educational and fiscal level.
Blockchain-driven Zakat Mechanisms
At the logistic level, a major challenge persists: the lack of centralized systems for managing Zakat. Without unified oversight, charities risk duplicating efforts and inefficiently allocating resources by misidentifying eligible recipients. This not only weakens the financial and communal impact of Zakat but also undermines trust in charitable organizations.
Despite the ongoing debate about the permissibility of using blockchain technology to manage Zakat funds, the latter can function as a system that provides transparent and easy access, both from the perspective of donor, recipient, and zakat institutions [2].
Digital Transformation: ZATCA
The Saudi government's campaign for digital transformation incorporates Zakat into centralized tax and invoicing services offered through the ZATCA (Zakat, Tax, and Customs Authority) platform. By digitizing these fiscal procedures, this new Zakat interface ensures higher levels of transparency and compliance.
Bridging Tradition and Innovation for Social Good
The integration of AI into Zakat distribution systems represents a transformative shift in how Islamic charitable obligations are fulfilled in the modern age. Confronted with financial strain, logistical inefficiencies, and growing social demand, organizations across Saudi Arabia are leveraging algorithmic tools to enhance the speed, accuracy, and impact of their charitable work.
From AI-optimized fundraising campaigns to blockchain-enabled transparency and government-led digitization through ZATCA, these innovations are not only improving operational efficiency but also reinforcing the spiritual and ethical intentions behind Zakat. Importantly, this evolution does not undermine the religious integrity of the practice; rather, it aligns Zakat with contemporary values of sustainability, dignity, and social empowerment. At a broader scale, the digital transformation of Zakat is one piece of the kingdom's vision 2030.
Sources
- https://arab.news/zu56p
- https://www.researchgate.net/publication/376718937_The_Impact_of_AI_and_Information_Technologies_on_Islamic_Charity_Zakat_Modern_Solutions_for_Efficient_Distribution
- https://www.thinkwithgoogle.com/intl/en-emea/marketing-strategies/automation/saudi-arabia-charity-ai-powered-campaign-for-orphans/
- https://www.researchgate.net/publication/391592550_The_Zakatability_of_AI_A_Dual_Analysis_from_Sharia_and_Saudi_Law
- https://www.istinbath.or.id/index.php/ijhi