Behavioral Dimensions of Islamic Philanthropy: The Case of Zakat

This is a study on behavior of individual Islamic donors who make a specific type of religious contribution called zakat. It seeks to provide a fundamental understanding of what governs the behavior of these donors - the triggers and motivators, traits and attributes, and preferences. Based on their responses to a set of statements, that connote a specific motivator or trait or preference, the study uses hierarchical cluster analysis to develop psychographic profiles of individual Islamic donors or groups among them. The study hypothesizes and provides supporting evidence that Islamic donors behave less like tax-paying citizens and more as benevolent servants of their Creator while paying zakat. The study presents interesting contrasts among Islamic donors in terms of their behavioral patterns by reducing the matrix of responses 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 donor's country of origin, indicating the possibility that Islamic donors from a given country may be displaying a distinct behavioral pattern. This raises a more profound possibility that the national identity of the donor, associated with a unique social, economic, legal and political environment may be a key influencer of the way s/he engages in matters pertaining to faith. The paper produces evidence that would contribute to any policy dialogue in the important area of developing social finance sector in Muslim societies. Zakat constitutes an important component of the global Islamic social finance sector. The evidence in this study highlights the need to give due importance to the observed diversity among zakat donors in any initiative to develop core principles, regulatory standards, institutional infrastructure, and models of governance for the development of this component of the global Islamic social finance sector.